Vijaya Diagnostic Centre Ltd (VIJAYA) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day and welcome to Vijaya Diagnostic Centre Ltd Q2 FY27 earnings conference call hosted by JM Financial Institutional Securities Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abin Benny from JM Financial. Thank you and over to you, sir.
Abin Benny (JM Financial): Thank you and good morning, everyone. I am Abin Benny and on behalf of JM Financial, I would like to extend a warm welcome to all of you on the second quarter FY27 earnings call of Vijaya Diagnostic Centre Limited. At the outset, I would like to thank the management of Vijaya Diagnostic for giving us the opportunity to host the call. We look forward to having an engaging and insightful discussion on the company's quarterly performance and the outlook.
Abin Benny (JM Financial): From the company, we have with us today, Mr. Sunil Chandra, Executive Director, Mr. Narasimha Raju, Chief Financial Officer, and Mr. Dhiren Gala, Head Investor Relations and Corporate Development. With that, I would now like to hand over the call to the management for their opening remarks. Over to you, Sunil sir.
Sunil Chandra (Vijaya Diagnostic Centre Ltd): Thank you, Abhin, for JM Financial for hosting the call. Good morning, everyone, and thank you for joining us on today's call. So, as we approach the festive occasion of Diwali, I wish you all and your families a very happy Diwali. Diwali is a time of togetherness, joy, and celebrations, when we take a moment from our busy schedules to spend time with our families and our loved ones. It is also a reminder that good health is the foundation of every celebration. And at Vijaya, we have always believed that timely diagnosis and preventive healthcare play an important role in helping families lead healthier and happier lives. And this continues to be at the heart of everything we do as we expand our presence and we bring high-quality diagnostic services closer to our customers. Moving on to the business. We have continued to maintain strong momentum in our execution, while staying true to our core principles. We are very happy with the positive response to our brand across the newer geographies, which is clearly reflected in the performance delivered over the last couple of quarters. Coming to the recent quarter, Q2 FY '27, I am pleased to share that we have sustained our strong growth momentum with healthy contributions from across geographies. During the quarter, we delivered strong revenue growth of 26.7% year-on-year, supported by a healthy volume growth of 16.5% and the balance was driven by improvements in
Sunil Chandra (Vijaya Diagnostic Centre Ltd): And revision in CGHS tariffs. Our existing centers have also grown at a strong growth rate of 20%. The centers that we have opened in the last 2 years contributed to the balance growth, reflecting the strength of our established network as well as the healthy ramp-up of the newer facilities. So, I would like to also thank our entire team for their continued dedication and efforts in delivering this performance. Our core markets continue to demonstrate strong growth momentum, supported by healthy underlying demand for quality services and continued market share gains. We have also witnessed a meaningful turnaround in Pune with our network consistently delivering healthy double-digit growth over the past three to four quarters. We are encouraged by the positive response to our advanced technologies and quality of services and that has reinforced our confidence in the potential of this region in the long term. And PH, which was an acquisition, continues to do well now. We continue to see encouraging momentum in West Bengal as our newest centers gradually mature and brand awareness also strengthens. We are also particularly pleased with the response in tier 2 markets, such as Krishnanagar and Diamond Harbour in Kolkata and Bengal. On the expansion front, we have commissioned two hub centers and seven spoke centers across our network so far during the year, that is in the first half. This includes our flagship hub at JP Nagar, Bengaluru, as highlighted during our previous call. And looking ahead, we expect to commission another three hubs in the second half of FY '27, followed by three additional hubs in Q1 FY '28, further strengthening our network and expanding our presence across key markets. Coming to our expansion plans in Hyderabad, we are witnessing particularly strong traction and faster ramp-up across our spoke centers in Western Hyderabad, mainly supported by the residential and commercial development, including the it being the IT and financial district. And to capitalize on this growing opportunity, we are planning to establish a third flagship diagnostic center in Hyderabad equipped with state-of-the-art infrastructure and advanced diagnostic equipment. This will be the third after our Himayatnagar flagship and Punjagutta. Moving on to Pune, the sustained improvement in performance and encouraging customer response have strengthened our confidence to to further invest in this market. And as part of this, we are planning to relocate two of our existing hubs, Satara and Mayur Colony, to larger premises, equipped with advanced better technology. And this is also because of the current centers being quite congested. And this will therefore the shift will help us to enhance the customer experience, improve outcomes, and also increase capacity to serve a higher number of customers.
Sunil Chandra (Vijaya Diagnostic Centre Ltd): for strengthening our presence in existing markets, upgrading our technological capabilities and building a scalable infrastructure to support sustainable growth. During the quarter, we also entered into a business transfer agreement to acquire Arya Wellness Center in Guwahati, Assam, and this marks our entry into the Northeast region and is an important step towards expanding our presence beyond our existing markets. We believe this acquisition provides us with a strong platform to establish our presence not only in Guwahati, but to also explore growth opportunities across the Northeast leveraging our experience in integrated diagnostics and operational excellence. Our focus continues to remain on delivering high-quality services, enhancing the customer experience and expanding our reach in a disciplined and measured manner. And with that, I will now hand over to Raju to take you through the operational and financial highlights for the quarter. Thank you.
Narasimha Raju (Vijaya Diagnostic Centre Ltd): Thank you, sir. Good morning and a warm welcome to everyone. First of all, wishing you and your families a very happy and prosperous Diwali. I'm delighted to share that we have delivered another set of great numbers in this quarter with strong growth in revenue and profitability. I'll take you through our financial performance and key developments for the current quarter and half-year ended September 2026. Coming to the quarterly performance, consolidated revenue for the current quarter stood at approximately to ₹255 crore, registering a strong year-on-year growth of 26.7%. This growth was primarily driven by test volume growth of 16.5% year-on-year and a favorable change in test mix, and also the revision in CGHS tariffs. I am particularly pleased to share that our Hyderabad business continued its strong performance growing by over 20% year-on-year, while Pune also delivered an encouraging growth of approximately 15.5% year-on-year. In terms of geography-wise revenue contribution, Hyderabad accounted for 67%, rest of AP Telangana approximately 20%, Pune 5%, West Bengal 5%, and remaining geographies accounted for the balance 3%. During the quarter, revenue growth was driven by both our radiology and pathology segments, reflecting the strength of our B2C focused integrated business model. B2C continued healthy at 92% of our revenue, while radiology accounted for approximately 37%. Revenue per test and revenue per footfalls stood at ₹513 and ₹1865 respectively during this quarter. Moving to profitability, EBITDA for the current quarter stood at approximately ₹113 crore compared to ₹82 crore in the corresponding quarter of the previous year, registering a strong year-on-year growth of 37.8%. Our EBITDA margin stood healthy at 44.1% reflecting an improvement of 350 basis points over the corresponding quarter of last year, primarily driven by operating leverage. Profit after tax for the current quarter stood at ₹59 crore, registering a growth of 37.4% year-on-year with a PAT margin of 23.3%. Now, coming to half-yearly performance, I will now briefly summarize performance for the half-year ended September 2026. Consolidated revenue stood at ₹486 crore compared to ₹390 crore in the corresponding period last year, registering a year-on-year growth of 24.8%. EBITDA stood at ₹211 crore compared to ₹155 crore in the first half of the previous year representing a strong growth of 36%, and EBITDA margin remains strong at 43.4%. Profit after tax for the current half-year stood at ₹113 crore with a PAT margin of 23.1%. Coming to update on Arya Wellness Center acquisition, as you are aware, during this quarter we have entered into a BTA for acquiring Arya Wellness Center in Guwahati on a slump sale basis. Currently we are in the process of completing the CPs as per the terms of this BTA, and we expect that this transaction will be completed in the next two months. Coming to capex guidance, as explained, we will be launching eight hub centers along with 14 spokes by Q1 FY '28. Out of the eight hub centers, we have already commissioned two hub centers, including one flagship hub in Bengaluru. Three more hub centers are expected to be operationalized by March '27, and balance three hubs will be coming up in Q1 FY '28. The estimated capex for this expansion would be approximately ₹155 to 160 crore. Apart from this, there are few more capex initiatives.
Narasimha Raju (Vijaya Diagnostic Centre Ltd): successfully completed the purchase of Kadapa land, in tier-2 location in AP, for approximately 9 crore, where we will be setting up a hub center in the next two years. Third, in Pune, as explained, the estimated capex for new hub center at Market Yard, which is in close proximity to the existing Satara Road center, will be approximately 18 to 20 crore along with central laboratory to serve the entire Pune network. This hub center is expected to be launched during this FY27, and this relocation will help us ease the existing capacity constraint and also provide headroom for further growth. Fourth, we have finalized a building property to purchase at a capex of approximately 19 crore close to our existing Mayur Colony hub center in Pune, since this lease premises is going for redevelopment by the owner. The hub is expected to be commissioned in FY28. Lastly, in addition to this, we have also upgraded two CT equipment across our network to high-end 160-slice cardiac CT, considering the increase in demand for high-end complex CTs. Now, coming to financial position, we continue to maintain a strong balance sheet with a surplus cash position of approximately 355 crore. I'm happy to inform that currently, the cash PAT is over 30% with healthy return ratios of ROCE of about 25% and return on equity of about 20%. Our strong financial position provides us with the flexibility to pursue our expansion plans with confidence while maintaining a disciplined approach to capital allocation and creating sustainable long-term value for our shareholders. That's all from my side. I would now request the moderator to open the line for the Q&A. Thank you.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rashi Shetty from Dolat Capital. Please go ahead.
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