Vijaya Diagnostic Centre: Navigating Growth and Expansion in Q2 FY26

Vijaya Diagnostic Centre Limited, a prominent integrated diagnostic chain in India, recently shared its financial and operational performance for the second quarter and half-year ended September 30, 2025. The company reported a consolidated revenue of INR 201.6 crore for Q2 FY26, marking a 10.2% year-on-year (YoY) increase and a 7.2% quarter-on-quarter (QoQ) growth. For the first half of FY26, revenue stood at INR 389.6 crore, reflecting a healthy 14.9% YoY growth. This growth was primarily driven by an 8.3% YoY increase in test volumes.

The company's profitability remained robust, with an EBITDA margin of 40.6% for Q2 FY26 and 39.9% for H1 FY26. This performance surpassed the management's full-year guidance of 38%, indicating strong operational efficiency and encouraging contributions from newly launched hub centres. The Profit After Tax (PAT) margin also remained healthy at 21.5% for the quarter. The management highlighted that while Q2 experienced some muted growth due to external factors like continuous monsoon rains affecting seasonal disease incidence and an early festive season, the overall half-year performance aligns with their growth trajectory.

Segmental Performance and Strategic Focus

Vijaya Diagnostic Centre's revenue mix for Q2 FY26 showed Pathology contributing 62.4% (INR 125.77 crore) and Radiology contributing 37.6% (INR 75.79 crore). The company emphasized its strong B2C focus, with 92% of its revenue coming directly from consumers. This B2C-driven model, combined with a balanced mix of radiology and pathology services, is a key differentiator, contributing to a higher revenue per patient compared to many national players.

Management noted that radiology revenue growth was particularly strong, increasing by over 16% YoY, even during the muted quarter. This growth was attributed to the addition of new hubs, which typically see radiology dominating revenue in their initial phases. The company's strategy revolves around volume growth rather than price increases, with only marginal price adjustments of 1-2% historically.

Strategic Expansion and Operational Milestones

Vijaya Diagnostic Centre is actively pursuing a hub-and-spoke expansion model, broadening its presence in concentric circles across Tier 1 and Tier 2 cities. A significant highlight was the merger of Medinova Diagnostic Services Limited, Kolkata, effective April 1, 2024, following NCLT approval. This merger is expected to strengthen the company's foothold in East India.

The company successfully launched several new state-of-the-art hubs:

• Kasba, Kolkata: Inaugurated in September 2025, this 5,250+ sq. ft. facility features the region's first 3T MRI, marking the third hub in West Bengal this year.
• Nandyal, AP: Launched in October 2025, this 8,000 sq. ft. hub includes an automated lab and the region's first 3T MRI.
• Khammam, Telangana: Opened in October 2025, this 10,000+ sq. ft. facility boasts an automated lab, a 3T MRI, and a 160-slice cardiac CT.
• Alwal, Hyderabad: A new spoke was launched in September 2025, enhancing the Hyderabad market footprint.

Notably, the Yelahanka hub centre in Bengaluru achieved break-even within just two quarters, significantly ahead of the projected one-year timeline. The HSR Layout hub in Bengaluru is also progressing well. Building on this momentum, the company finalized the lease for a flagship centre at Bannerghatta, Bengaluru, which will feature an automated lab and advanced radiology equipment, including PET-CT with advanced CT.

Outlook and Management Confidence

Management expressed confidence in achieving a 15% CAGR revenue growth over the next three years. They anticipate surpassing the 38% EBITDA margin guidance for FY26, with H1 already at 39.9%. The CAPEX for FY26 is projected to be around INR 160 crore, with a significant portion already invested. For FY27, CAPEX is expected to be lower, between INR 100-120 crore, with EBITDA margins likely to remain around 40% as new centres stabilize and break-even.

The company plans to operationalize two additional hubs in West Bengal by the end of FY26 and is actively looking for spoke additions across its markets. Despite some KMP attrition, management assured that robust mid-level and senior mid-level teams are in place, ensuring no impact on growth plans. Vijaya Diagnostic Centre remains committed to its integrated business model, high B2C concentration, and strong brand recall, which have consistently led to industry-leading margins.