Vijaya Diagnostic: Net Profit Rises 37.6%

Vijaya Diagnostic Centre (NSE : VIJAYA) is a Hyderabad-based integrated pathology and radiology company. It runs a hub-and-spoke network of owned diagnostic centres with a direct-to-consumer model, earning EBITDA margins well above the listed diagnostics sector average. What happened: In Q1FY27, revenue grew 22.8% year on year to Rs 231 crore and net profit rose 37.6% to Rs 53.1 crore. EBITDA margin expanded 360 basis points to 42.7%. Patient footfalls grew 12.7% to 1.24 million but revenue grew faster, as tests per footfall rose to 3.7 from 3.58 and average revenue per footfall increased 9% to Rs 1,860. In FY26, revenue was Rs 814.2 crore, up 19.5%, and net profit was Rs 173 crore, up 20.3%. The company is debt-free. Why it matters: Vijaya’s 42.7% EBITDA margin in Q1FY27 compares with Dr Lal PathLabs at 31%, nearly 12 percentage points lower. ROCE stood at 25% in FY26. Revenue at 22.8% outpacing footfalls at 12.7% shows each patient visit generates more value. The company is expanding across Bengaluru, Kolkata and Pune with a capex budget of Rs 190 to 195 crore. What I am watching: 67% of revenue comes from Hyderabad. New centres in Bengaluru, Kolkata and Pune must build patient volumes quickly enough to absorb their fixed costs and match the margins of the Hyderabad business. The stock trades at a P/E of 76.2, above its five-year median of 64.8. Any margin dilution from expansion will test that premium. My stance: The operating model is among the strongest in Indian diagnostics. Zero debt, a 42.7% EBITDA margin and 37.6% profit growth are all real. Expansion beyond Hyderabad is the right move but also the key risk to margins at a P/E of 76.2. I do not hold a position in Vijaya Diagnostic at the time of writing. This is not investment advice.