Vijaya Diagnostic Centre Limited

Vijaya Diagnostic Centre reported consolidated revenue of Rs.202 crores for Q2 FY26, marking a 10.2% year-on-year and 7.2% quarter-on-quarter growth, primarily driven by an 8.3% increase in test volume. The EBITDA margin for the quarter remained strong at 40.6%, with a healthy PAT margin of 21.5%. For the first half of FY26, consolidated revenue stood at INR390 crores, reflecting a 15% year-on-year growth, with an EBITDA of INR155 crores and a 40% margin, and PAT of INR82 crores with a 21% margin.

While Q2 is typically a strong quarter, growth was slightly muted due to a strong monsoon leading to lower incidence of monsoon-related diseases, an early festive season, and a high base effect from 23% YoY growth last year. Radiology revenue, however, demonstrated robust growth of 16% YoY, offsetting the muted performance in the pathology segment. Gross margins for H1 FY26 increased to approximately 88% YoY, though a slight Q1 to Q2 contraction was noted due to increased input costs from vendors.

The Yelahanka Hub Centre in Bengaluru achieved break-even within just two quarters of operation, significantly ahead of the projected one-year timeline, underscoring strong demand for integrated diagnostics in the region. The HSR Layout hub centre is also progressing well and is on track for early break-even. The company has finalized the lease for a flagship centre at Bannerghatta, Bengaluru, which will feature an automated lab and advanced radiology infrastructure, including PET-CT with cardiac CT.

Vijaya Diagnostic successfully launched a new Hub Centre in Kasba, Kolkata, marking the third hub centre launch in West Bengal this year, with two additional hubs planned for Q3 FY26. Two new hub centres were operationalized in Nandyal (AP) and Khammam (Telangana). In Pune, an acquired market, revenue saw a 2% dip in Q2 and a 7-8% dip in Q4 FY25 due to ongoing cleanup and streamlining of processes; however, an uptick in volumes has been observed in the last two months, and new centres like Ambegaon and Kalyani Nagar are expected to break even within 10 months and by next June, respectively.

The company's CAPEX for FY26 is projected to be Rs.160 crores, with the majority already incurred by H1 FY26. For FY27, CAPEX is expected to be lower, ranging from Rs.100 to Rs.120 crores. Management reiterated its guidance of 15% CAGR revenue growth over the next three years and expects to surpass the FY26 EBITDA margin guidance of 38%, with H2 FY26 margins projected to be between 39.5% and 40%, and FY27 margins around 40% as new centres achieve break-even.

Vijaya Diagnostic maintains a strong B2C focus, with 95% of its business being direct-to-consumer, differentiating it from national players who often have a higher B2B component. The company's higher revenue per patient is attributed to its B2C model and a balanced mix of radiology and pathology services. While the competitive landscape remains intense across all markets, Vijaya focuses on its differentiated offering, particularly in specialized advanced radiology with pathology work.