Detailed Narrative
Q2 and H1 FY26 Financial Performance
Suraksha Diagnostic Limited reported a Q2 FY26 total income of INR79.58 crores, marking a 16.9% year-on-year growth. However, EBITDA grew only 1.9% to INR24.966 crores, with the margin at 31.7%. PAT for the quarter was INR8.828 crores, down from INR10.156 crores in Q2 FY25, resulting in a PAT margin of 11.2%. For H1 FY26, revenue increased by 17.8% year-over-year to INR153.072 crores, surpassing INR1,500 million for the first time. H1 EBITDA stood at INR49.622 crores with a margin of 32.8%, and EPS was INR3.53.
Network Expansion and Strategic Investments
The company expanded its network to 63 centers by the end of September 2025, adding three new centers in Q2 FY26, including one PPP, one large, and one small center. Management reiterated its commitment to adding 12 to 15 'own' centers in FY26, with a total of 18 to 20 centers including PPP and Fetomat. These new centers are expected to contribute approximately INR22 crores in revenue for FY26. The company also launched Suraksha Genomics, a new service offering advanced genetic and molecular testing, which is seen as a landmark event for future growth.
Profitability Headwinds and Cost Dynamics
Q2 FY26 profitability was impacted by several factors, including heavy rainfall and floods, which caused an estimated revenue shortfall of INR3.5 crores. The early occurrence of Durga Puja festivities in September 2025 also affected business. The overall EBITDA margin was diluted by the 33% of centers that are not yet matured, with 15 centers being less than one year old. Other expenses increased by INR4 crores, primarily due to rental expenses for expansion (INR80 lakhs), professional fees to doctors (INR1.6 crores), post-listing charges, and administrative expenses for new centers.
Realization Per Test and B2B Mix
The realization per test decreased from INR389 in H1 FY25 to INR364 in H1 FY26. Management attributed this decline to two main factors: offering introductory discounts at new centers to gain traction and an increased focus on the B2B business, which now accounts for 7% of revenue (up 1% from previous period) and typically involves discounted packages. Despite this, the number of tests performed increased by 25% in H1 FY26.
Long-Term Outlook and Capital Allocation
Management expressed confidence in achieving 15% revenue growth and 33-34% EBITDA margin for FY26, expecting margins to revert to higher levels as new centers mature. They also project a 1-2% annual increase in both EBITDA and PAT margins in the long term. The company plans to invest around INR70 crores annually in organic expansion, funded through internal accruals, leveraging its underleveraged balance sheet. While no dividends were declared this quarter, the company is actively working on plans to initiate them in the future. The acquisition of the balance stake in Fetomat is targeted within three to five years, and the company is open to inorganic growth in new geographies.