Vijaya Diagnostic Centre Limited

Vijaya Diagnostic Centre reported a robust Q1 FY26 with consolidated revenue of ₹188 crores, marking a strong 20.4% year-on-year growth. This performance was primarily fueled by a 17% year-on-year increase in test volumes and a favorable change in the test mix, with patient footfall also growing by 14%. The company achieved a healthy EBITDA margin of 39.1% and a PAT margin of 20.4%, demonstrating strong operating leverage.

The company commissioned five new hubs and one spoke during Q1 FY26, progressing towards its target of 10 new hubs for the financial year. Management noted that all new hubs in Pune, Bangalore, and West Bengal are operational with steady footfall. Notably, one hub in Bangalore is on track to achieve breakeven earlier than estimated, and the Nizamabad hub in Telangana achieved breakeven within two quarters of operation, indicating efficient ramp-up.

Vijaya Diagnostic Centre reiterated its conscious decision to avoid the governmental PPP (Public-Private Partnership) model, citing concerns over price realization and receivables. The company's strategy focuses on a B2C integrated model with a dense network, which is enabling it to gain market share from unorganized sectors, particularly in its core Hyderabad market. This approach, combined with brand strength and trust, is expected to drive double-digit growth in the near future.

Despite the launch of multiple new hubs, which typically incur initial costs, the company maintained a healthy EBITDA margin of 39.1%. Management explained that the initial drag from new hubs was limited to approximately 1-1.2% and was effectively offset by operating leverage from the growth in the existing network. The full-year FY26 EBITDA margin guidance remains at 38-38.5%, reflecting ongoing investments in expansion.

The Q1 FY26 results showed a higher contribution from radiology (39% of revenue) compared to pathology (61%), which positively impacted the average revenue per patient due to higher test costs in radiology. The wellness segment also saw an increase in its contribution, rising from 13.5% in Q1 FY25 to 14.2% in Q1 FY26, driven by increased patient awareness, digital marketing efforts, and expanded corporate coverage.

For FY26, the company plans a CAPEX of ₹150-155 crores for newer centers and 2-3% of the overall topline for replacement CAPEX. With a cash position of ₹270 crores (net ₹220 crores after capital creditors) as of June 30, 2025, management confirmed they are actively looking for inorganic growth opportunities, provided they meet criteria for valuation, asset quality, and integration aspects.

The IndAS impact for Q1 FY26 was reported at approximately ₹1.8 crores, comprising ₹0.92 crores for interest and ₹0.95 crores for depreciation. The company clarified that while a 1.5% price effect contributed to revenue growth, it was primarily due to test mix changes. Management stated there are no plans for further price increases in FY26 beyond those implemented in Q1, which are typically done annually.