Vijaya revenue mix shifts as Hyderabad share drops to 67%

Vijaya Diagnostic Centre Limited reported that Hyderabad contributed 67% of revenue in Q2 FY27, down from 69% in the comparable prior-year quarter, and management expects the city’s share to decline by 3 to 4 percentage points annually as other markets expand. Hyderabad nevertheless grew by more than 20% in H1 FY27.

Why is Vijaya’s Hyderabad revenue share declining?

Vijaya’s Hyderabad revenue share is declining because newer markets are growing alongside, rather than instead of, the core city. Management said Hyderabad contributed 67% of Q2 FY27 revenue, 2 percentage points below the 69% recorded in the same quarter a year earlier, even though Hyderabad delivered growth of more than 20% in H1 FY27.

Management said Kolkata had reached 5% of revenue in Q2 FY27, Pune was stable and Karnataka was growing. It expects Hyderabad dependence to reduce by a few percentage points, or 3% to 4%, each year as those markets contribute more. No separate revenue shares were disclosed for Pune or Karnataka.

Hyderabad remains Vijaya’s largest operating cluster. The company had close to 100 centres in Hyderabad from a company-wide network of about 168 centres, including 19 Hyderabad hubs and 80 spokes. Management said this density can place a Vijaya centre within about 10 minutes of customers across much of the city.

Which markets will Vijaya expand next?

Vijaya’s current priority is to deepen its presence in Pune, Bengaluru and West Bengal, rather than open another new geography. Management said it will also continue adding hubs and spokes in Hyderabad and in district headquarters across Andhra Pradesh and Telangana where it sees demand potential.

The newer-market network remains materially smaller than Hyderabad. Kolkata had 12 centres, comprising seven hubs and five spokes, while Karnataka had four centres: HSR Layout, Yelahanka, JP Nagar and Gulbarga. Pune had five hubs after additions at Kalyani Nagar and Ambegaon, alongside additional spokes not quantified in the call.

The rest of Andhra Pradesh and Telangana had 33 centres, including 15 hubs and 18 spokes. Vijaya said its acquisition transaction in Assam would take it into its seventh state and provide a platform to serve the northeastern region. Beyond Assam, management said it is not currently looking for another geography, although it may assess future acquisition opportunities that fit its merger-and-acquisition strategy.

How is Vijaya adding capacity in Pune and Hyderabad?

Vijaya is adding hub and laboratory capacity in Pune while continuing equipment and laboratory investment in Hyderabad. Management reported surplus cash of about Rs 355 crore, cash profit after tax of over 30%, return on capital employed of about 25% and return on equity of about 20% as it outlined these projects.

In Pune, the Market Yard hub and central laboratory are estimated to require Rs 18 crore to Rs 20 crore and are expected to launch during FY27. Located near the existing Satara Road centre, the site is intended to ease capacity constraints and serve the Pune network. Vijaya has also finalised a property near its Mayur Colony hub at an estimated Rs 19 crore, with commissioning expected in FY28 because the leased location is being redeveloped.

In Hyderabad, the Panjagutta central laboratory with an automated track system is expected to be operational in the next few months, at an estimated cost of Rs 20 crore. Vijaya also bought land in Kadapa for about Rs 9 crore, where it plans to establish a hub centre within two years. Management said an additional expansion project due in Q1 FY28 would require estimated capital expenditure of Rs 155 crore to Rs 160 crore.

What is driving Vijaya’s revenue growth beyond pricing?

Vijaya said volume growth and a shift toward higher-value tests, rather than pricing, drove its close to 25% year-on-year revenue growth in H1 FY27. Management attributed about 16% to 16.5% to volume growth, estimated 4% to 5% from a favourable test mix, and attributed about 3% to the Central Government Health Scheme, or CGHS, tariff increase.

For the next three to five years, management said revenue growth above 15% is achievable and should be driven mainly by volumes. Vijaya said historical compound annual growth in price realisation was about 2%. It may review market pricing and decide whether to raise prices in Q3 or Q4 FY27, but management said price is not expected to be the principal driver of long-term growth.

Management estimated that existing-network volume growth could account for about 8% to 10%, while new centres could contribute about 3% to 3.5%. Vijaya has upgraded two computed tomography, or CT, machines to 160-slice cardiac CT systems as demand rises for complex CT examinations, including CT angiography. Its wellness business represented 14.5% of company revenue and grew by more than 25% in the quarter.

Can Vijaya grow Hyderabad while reducing its concentration?

Vijaya can grow Hyderabad while reducing its revenue concentration if newer regions expand faster from smaller bases, which is the mix shift management described in Q2 FY27. Management attributed Hyderabad’s growth to the company’s network scale, brand and additions of equipment and specialisations, rather than to price increases.

Vijaya said it may add a second ultrasound machine when a spoke generating about Rs 3 crore to Rs 3.5 crore faces high ultrasound demand. For magnetic resonance imaging, or MRI, management cited an initial comfortable level of 15 to 16 scans a day and said it may add capacity when volumes reach about 25 daily scans and patient waits extend beyond one to two hours.

In Kurnool, Vijaya has added a second MRI to meet demand in a Tier-2 location. In Tirupati, where it opened a centre two to three years ago, management said it may decide within six months whether to add a second MRI. These additions to existing sites can lift throughput while new hubs and spokes extend coverage in Pune, Kolkata and Karnataka.

Conclusion

Vijaya’s revenue mix is broadening without a stated slowdown in Hyderabad. The city remained the source of 67% of Q2 FY27 revenue and grew by more than 20% in H1 FY27, but its share was 2 percentage points lower than a year earlier as Kolkata reached 5% and management reported growth in Karnataka. The outcome management seeks is a lower concentration of revenue in Hyderabad through faster expansion elsewhere.

The next indicators are execution of the Market Yard hub and central laboratory during FY27, commissioning of the Mayur Colony replacement hub in FY28, and the larger Rs 155 crore to Rs 160 crore expansion due in Q1 FY28. Management’s plan to add four to five hubs in FY28, after targeting eight hubs in FY27, will show whether network capacity is expanding at the pace needed to change the revenue mix.