Vijaya Diagnostic reports 37% profit growth in Q2

Vijaya Diagnostic Centre Limited reported a 37.4% year-on-year increase in Q2 FY27 net profit to ₹59.5 crore, supported by strong revenue growth and improved operating margins. Revenue rose 26.7% to ₹255.4 crore, while EBITDA increased 37.8% to ₹112.7 crore. EBITDA margin expanded by 350 basis points to 44.1% from 40.6% a year ago. The company also reported 16.5% growth in test volumes, indicating that the performance was supported by higher business volumes as well as better operating efficiency. Existing centres recorded approximately 20% growth, while newer centres continued to contribute as they ramped up. The company has commissioned 2 hubs and 7 spokes in FY27 so far, with another 3 hubs and 7 spokes planned in the second half. Its proposed acquisition of Arya Wellness Centre in Guwahati also marks its entry into the North-East market. In my view, the most encouraging part of these results is the combination of volume growth and margin expansion. Revenue growth alone would be less convincing, but EBITDA growing faster than revenue suggests improved operating leverage. The expansion into new markets could support future growth, although new centres and acquisitions will need to deliver adequate volumes without putting pressure on margins. Going ahead, I will be tracking volume growth, the ramp-up of new centres and whether EBITDA margins remain above 40%. The company's ability to sustain this growth while managing expansion costs will be important. Vijaya Diagnostic closed at ₹1,443.95 on the BSE, down 0.95%. My view is positive on the operating performance, but I would watch execution and valuation before taking a fresh investment call.

Disclaimer: This post is for informational purposes only and not a recommendation to buy or sell any securities. I, or my family, associates, or relatives, may have a financial interest in the securities mentioned.