Ladies and gentlemen, good day and welcome to Vijaya Diagnostic Q2 FY26 earnings conference call hosted by JM Financial Institutional Securities Limited. As a reminder, all participant lines will be in 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 * then 0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amey Chalke from JM Financial. Thank you, and over to you, sir.
Thank you. Good evening, everyone. I'm Amey Chalke, and on behalf of JM Financial, I would like to extend a warm welcome to all of you to the Q2 FY26 earnings call of Vijaya Diagnostic Centre. At the outset, I would like to thank the management of Vijaya Diagnostic for giving us an opportunity to host the call. We look forward to having an engaging and insightful discussion on the company's quarterly performance and outlook.
From the company, we have with us today Dr. Prita Reddy, Managing Director and Chief Executive Officer, Mr. Sivaramaraju Vegesna, Vice President of Operations, and Mr. Dhiren Gala, Assistant General Manager, Strategy and Investor Relations. With that, I will now hand over the call to the management for their opening remarks. Over to you, ma'am.
Thank you, Amit, for hosting the call. Good evening, everyone, and thank you for joining the call. I would like to begin by sharing an update on our operational and financial performance for the quarter and the half-year ended September 30, 2025. The consolidated revenue for the current quarter stood at INR 202 crore, reflecting a revenue growth rate of 10.2% year-on-year and 7.2% quarter-on-quarter.
This growth was primarily driven by an 8.3% year-on-year increase in the test volume. Our EBITDA margin for the quarter ended stood strong at 40.6%, reflecting the resonance of our business model with a minimal drag and an encouraging performance from the newly launched hub centres this year. PAT margin was also very healthy at 21.5%. Moving to the half-yearly performance, consolidated revenue stood at INR 390 crore, reflecting a healthy year-on-year growth of around 15% in line with our guidance.
EBITDA was INR 155 crore, translating to a margin of 40%, with PAT stood at around INR 82 crore, with a margin of 21%. Vijaya commenced Q3 FY26 on a very positive note, witnessing a notable increase in footfall and revenue across the network. Regarding the merger, we have received the NCLT approval order in October for Medinova Diagnostic Services Limited with the company, effective April 1, 2024. I'm also happy to share that our Yelahanka Hub Centre in Bengaluru achieved break-even within just two quarters of operation, well ahead of the projected one-year timeline.
This strong performance underscores the growing demand of high-quality integrated diagnostics in the region. Our Hekatar Layout Hub Centre is also progressing well and is on track to reach break-even ahead of the plan. Building on this momentum, we have finalized the lease for our flagship centre at Banerghatta, Bengaluru.
This upcoming facility will feature an automated lab and advanced radiology infrastructure, including PET/CT with Cardiac CT. Moving on to other expansion updates, I'm pleased to announce the successful launch of our hub centre in Kasba, Kolkata, during this quarter, marking a third hub centre launch in West Bengal this year. Two additional hubs in the state are on track to be commissioned in Q3 FY26.
The hubs commenced operations in Krishnanagar and Barasat last quarter are progressing well and are expected to achieve break-even ahead of the estimated time. In line with our strategy to strengthen our presence across our tier two locations within our core market, we have operationalized two new hub centres at Nandyal in Andhra Pradesh and Khammam in Telangana. We have also begun to see an uptick in volumes across both existing and new centers in Pune over the past two months.
To conclude, we are encouraged by the strong response to the Vijaya brand in new markets and remain committed to expanding our network through new hubs and spokes across the regions that we operate in. That's all from my side. I will now request the moderator to open the line for Q&A. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on your touch-tone phone. If you wish to remove yourself from the question queue, you may press * and 2. 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 Nancy Yadav from Allegro . Please go ahead.
Hi, ma'am. Congratulations on the resale of numbers. I just wanted to clarify a number. Could you please tell me the net debt or net cash number for September end?
The surplus cash as of 30th September 2025 is around INR 235 crore, excluding the deferred capital creditors' balance. The actual cash balance is around INR 295 crore.
Sorry, sir, this is excluding the?
Deferred capital creditors' arrangement.
All right.
For our existing vendors.
Understood. Thank you a lot.
Thank you. The next question is from the line of Anshul from Emkay Global. Please go ahead.
Hi, good evening. Hope I'm audible.
Hi, hi, Anshul. Good evening.
Great. First question is on our Q2 performance. While this is a seasonally strong quarter, I understand. Even for the industry, this was slightly muted. Is there anything particular to call out in the current quarter why our performance has sort of dipped?
Anshul, yes, entire India had a great monsoon. What we've experienced in the regions where we are present is that because of the continuous rain, there was lower incidence of monsoon-related diseases. That is why there was a little bit of muted growth. Secondly, a little bit of growth was also impacted during last week of September because of the festive season coming slightly early this time around. Also, thirdly, we are also looking at a higher base where last year we grew at 23% year-on-year.
These three put together resulted in slightly lower growth this time around. Having said that, we have time and again stated that we need to look into this business from a full-year perspective and not just the quarter. I think, as ma'am stated, Q3, we are looking at good, increased footfalls across our network. We are hopeful for a good Q3.
Just to add, Anshul, to what Dhiren said, if you actually break down the revenue and see, we still grew at higher double-digit in radiology. The radiology revenue growth was about 16%. The drag actually happened in pathology because last year we had a lot of dengue and malaria-related cases, which was not the case in the current financial year. Because of the base effect and also because generally monsoons are very, Q2 is very strong, but this time we did not see the fever-related testing.
That was one reason why the growth is slightly muted. Otherwise, if you see on the radiology segment, we still grew at 16%. The early Q3, to whatever period that, the early Q3, the numbers are slightly encouraging. We are back on track as per our guidance.
Got it. While ma'am did allude to that, Pune region seems to be doing well, but any insights or any color on whether we expect quicker, faster than expected break-even, just like in Bengaluru or Kolkata?
For Pune, probably I would stick to our timelines and be a little conservative there on the timelines because it's something that we acquired. I have told you that we had a lot of cleanup that we've been doing. It was a conscious decision to make sure that we let go of certain clients because of payment issues, old debtors, all of that, right? If we actually look at Pune, like I've mentioned, there is an uptick there in the last two months.
It's looking positive. I would still give it the time that we mentioned earlier, and we're very confident that Pune will also grow. Bangalore, because it was a new geography, Anshul, I said a year, and it's broken even much earlier. That's kind of encouraging for us to open a lot more hubs than probably what we've mentioned. Pune, we will stick to our guidance that I've given earlier. Bangalore, you'll be seeing a few more hubs coming in.
Got it, very clear. Just one last question from my end. Gross margins seem to have contracted despite radiology growth being strong on a YoY basis. Again, could you help me understand the reason for this? On a QoQ basis, sorry.
Yeah. So gross margins, if you just compare year-on-year, they've actually increased from 87.2% to around 88%. That is largely because of the hub additions which we have done since past one year. I think, also, Anshul, there is slight increase in the input cost from many of the vendors, which we still did not take any price hike for that. Since there is also a reduction in the GST, right? Maybe in the coming quarters, we'll see the benefit again. Yes, in the current financials, because of the dollar fluctuation, etc., there was a slight increase in the input cost from the vendors. That is one of the reasons why you see the slight contraction from Q1 to Q2.
Also, Anshul, what happens is in Q2, in absolute terms, although the growth for the pathology segment was lower, in absolute terms, the pathology number is higher. That's why you see a little bit of contraction when you compare quarter-on-quarter, Q1 versus Q2.
Got it. Very useful. Many thanks. I'll leave you on the queue.
Thank you. A reminder to all the participants that you may press * and 1 to ask a question. The next question is from the line of Aksha from Investech Capital. Please go ahead.
Yeah. Hello, sir. I have two sets of questions. One is, what has been the growth rate on an organic basis and inorganic basis? Second question is, of late, we are seeing a number of players like Redcliffe, Tata 1MG launching testing packages for the GLP-1 weight loss management program. Any color on these? Thank you.
On the growth rate, it is on the concern last year of the PH was part of the base, right? Organically, it is whatever growth that they do, 10 points on it with the organic growth, right? If I have to exclude PH and C, you'll see maybe 0.50 basis points more growth if you see on a standalone basis.
Yes. On the GLP front, yes, we have been hearing a lot of reports that the impact is expected to be positive. The magnitude of impact is something which we are yet to assess, and we will kind of see how things evolve. Most of the parameters which are included in the GLP drug package, especially before the treatment, are already part of a few of our existing comprehensive wellness packages. Once we hear and experience demand picking up, then we will definitely be ready with packages exclusive for GLP for pre, during, and post-treatment phase.
Actually, we do about close to almost over 10,000 walk-ins a day. In the last few months, with all of this going on about GLP-1, we have not seen a single request come in either from a customer walk-in or a consultant or probably a CME that would have been conducted for us from any of the endocrines or the doctors to actually say what goes into a package. All of these packages that we see in the market today are varied in kinds of testing. There is something that they have come up with. We would like to give some time, understand this, get some guidance from the specialists and the clinician, and then probably look at how we would want to address this.
Okay, ma'am. That was useful. Thank you.
Thank you.
Thank you. The next question is from the line of Krishna Raj from Equity Health Management Private Limited. Please go ahead.
Okay. Thanks for the opportunity. My first question was the revenue per patient of Vijaya. Far higher compared to the players. Hi. I just wanted to understand what is it Vijaya is doing different than.
Your line is breaking. Could you please come to a network area so that we can hear you clearly?
It's better now.
Yes, sir. Please go ahead.
Krishna, can you hear us?
Hello? Are you there?
Yes.
Yeah, yeah. We can hear you.
Yeah. So my question was the revenue per patient of Vijaya is higher compared to the national players. I just wanted to know what is it Vijaya is doing different from the peers that we have a higher number? Also, what are the factors that would drive revenue per patient?
Krishna, the basic fundamental difference is that we are a 95% B2C company, with the mix of both radiology and pathology in a ratio of almost 60-40, with all of our patients actually walking into our facilities. If you're saying national players, I'm assuming that some of the other labs mostly do B2B samples and have B2C customer bases in their core geographies. Because of the radiology and pathology mix and being a direct B2C-driven company, the per-revenue mix per patient is higher. That is a key differentiator here. I'm sorry, I didn't get your second question.
How should I see what would be the factor that would make this number higher going forward?
That will be a function of the hubs and spokes. The more the number of hubs we open, definitely the advanced radiology proportion will be higher. That will definitely increase, and obviously, increase in the realization. If you see our history, historically, we have just done 1.5% of price increase every year. These are the two factors which will help increase revenue per patient.
My second question was, with just seeing what the previous participant asked. Definitely for diagnostics, do you see more number of volumes that can come in when the patent of the weight loss goes in from next year?
Sorry, can you repeat? Krishna, I think, like you said, I think we have to wait and see. Otherwise, yes. Any new change that comes will ideally be a positive for diagnostics because if somebody is undergoing a new treatment to check the effectiveness of treatment, obviously, they have to undergo more testing. To comment on the real numbers, I think we have to wait and watch for now.
Thank you. That is fine.
Thank you. The next question is from the line of Abdulkader Puranwala from ICICI Securities. Please go ahead.
My first question is with regards to the slowdown that we've witnessed in the Hyderabad market. In terms of our revenues going into single digit. So anything to read here, or this is mainly on account of the seasonality, what you just spoke about?
Abdul, like we said, it is about the seasonality because if you see, again, within the radiology, we still grew at more than 16% at a company level. So the actual happened in the pathology segment. And last year in the base, organically, we grew at 23% where pathology was dominating because of fever-related testing, which was not the case in the current year. And that specifically happened, like Dhiren mentioned, it specifically happened in the month of August and the last 10 days of September because of the festive season coming early.
Like we said in Q4, right? You also have seen Q4 slightly lower than the number that we tried. At a year level, obviously, we are performing better than our guidance. That is the reason we always say we have to see this business at a year level. We are very confident in the coming quarters. We'll do better than what we are guiding.
Okay. So sir, just next on your guidance, are we holding on to the 17%-18% top-line growth and EBITDA margin guidance of 38%-39% for the full year?
Abdul, right from our IQ days, our guidance has remained the same. We are comfortable guiding at 15% CAGR over the next three years. Obviously, every quarter, you might see here or there maybe we deliver 16, 17, or sometimes 14, 13 as well. As far as our comfort is concerned, we are comfortable at 15%. Although we have again time and again stated that internally, the work is going on to deliver a better growth number.
In terms of EBITDA, financially, if you remember, we guided about 38%-38% and up. Because the new centers are performing well, in the last quarter, we delivered about 39.1%. This quarter, at H1 level, it was about 40%. I think more or less, financially, we will be surpassing the guidance on the EBITDA margin.
Understood, sir. Thank you. I'll jump back to you.
Thank you. The next question is from the line of Deven from Marcellus Investment Managers . Please go ahead.
Hi. Am I audible?
Yes, Devin.
Yeah. My question was regarding Pune. I can see the revenue has declined in this quarter despite adding four centers in the last two quarters. Anything you can share about that? Also, if you can share any numbers on how the new hub centers in Pune are ramping up.
Devin, if you see the last two quarters, yes, right from Q4, there was a revenue dip. The dip was actually coming down. If you actually see Q2, similarly, like the way that happened in Hyderabad, if you see Q2 of last year, Pune did really well because, again, monthly-related testing.
This year, in spite of pathology not doing much because Kajayanagar just opened in the end of May, and the actual real operation started from the month of June, like full-fledged operation started from the month of June. These centers took, like ma'am mentioned, some time. We started seeing uptick in numbers only from the last two months because we are seeing quarter as a whole. Yes, there was a dip of 2% in revenue, which was 5% in the last quarter and about close to 7%-8% in Q4.
I think two quarters from now is when you'll see the actual growth coming from Pune. Quarter on quarter, we are getting better. Like we said, it was a conscious call that we have to clean up by letting go of a few of the clients. Coming to the new centers, Afega, which was opened in the month of March, right? I think early April. That center, we are very confident that it will break even within less than one year. Maybe it may happen by the 10th month is what we feel right now. Similarly, Kajayanagar, which started full-fledged operations in the month of June, I think by next June, we are confident that it will break even.
Okay. Understood. When do you plan to resume new center addition in Pune?
Sorry?
Sorry. When do you plan to resume new center addition in Pune?
I would like to wait. Definitely, on adding a few more hub centers. Spokes. In fact, as we speak, I think the team is looking at certain locations, and you will see certain spokes come up. Hub addition probably will take some time. We are going to wait for both of these centers to actually settle down and only then look at adding any more hubs in Pune.
Okay. Okay. Understood. Thank you.
The next question is from the line of Hitaindra Pradhan from Maximal Capital . Please go ahead.
Hi, sir. I hope I'm audible. My question was related to the GST input thing that you mentioned earlier. Are you observing any cost related to the GST reform?
Yes. The business itself is a GST-exempt business. On top of that, if you look at our pricing, we've always been growing only with volume, not with an increase in price. If you look at advanced and high-end radiology, there hasn't been an increase in price for almost five to six years.
We will have to look at this and then probably see what the impact is and then take a call. We are basically always saying that we would like to grow on volumes and not on price increase. There hasn't been other than a 1%-2% price increase on all of these tests, mostly related to lab over the years. We will definitely have to give it some time.
Unless we told you. There was a certain parameter where the input cost has gone up, but still, we did not increase the pricing of the test. Okay. Okay. Understood. Thank you.
Thank you. The next question is from the line of Surya Patra from PhillipCapital . Please go ahead.
Yeah. Thanks for the opportunity. My first question is on, let's say, the radiology growth. So, I think that this quarter, the radiology growth, and likewise, the pathology will be seeing some impact due to so many kinds of national holidays, whether it's Aashwara, Anupavucha, and all that.
We're not able to hear you properly. Could you repeat the question, please?
Hello.
Sorry, Surya. I'm not audible.
Yeah. Okay. So yes, about the radiology. Thinking that. Out of.
Sorry to interrupt, but Mr. Surya, please kindly connect later because your connection does not seem stable. Thank you so much. Please connect from a network area. Thank you. A reminder to all the participants that you may press * and 1 to ask a question. A reminder to all the participants that you may press * and 1 to ask a question. Next question is from the line of Shivam from Elara Capital. Please go ahead.
Hello. Am I audible?
Yes, Shivam.
Sir, ma'am, I have just one question. Basically, in your opening remarks, you have mentioned that you are focusing more hubs in Bengaluru because of achieving break-even faster than the expected timeline. I just wanted to know, have you finalized any numbers on that, or how are we looking at the Bengaluru market as a whole?
Bengaluru market as a whole, we've mentioned earlier, you'll be seeing about four to five hubs in total coming, out of which two hubs have already come. You'll see another three, out of which Banerghatta has already finalized. It's a state-of-the-art center. It'll be the flagship center for Bengaluru with an advanced PET/CT, with a cardiac MR.
It's a full-fledged center. We'll also see a couple more hubs come, and we're simultaneously looking at adding spokes also in our core geographies and in the Kolkata markets as well. Overall, our guidance of the four to five hubs and the 10-12 spokes, you will see. Probably by this year-end as guided earlier.
Understood, ma'am. Is that addition likely to be continued in FY27 also going forward?
Yes. It's actually for your next year, right? Yeah. This is for your next financial year.
Okay. Okay. Just one more question on my side. What was the CapEx number that we are expecting for the second half of FY26?
The CapEx number would be INR 160 crore. We have actually incurred the majority of the CapEx by H1 FY26. That will be the CapEx number. For FY27, the CapEx is likely to be anywhere between INR 100-120 crore.
Okay. Okay. That's it from my side.
Thank you. The next question is from the line of Karan Gupta from ACMIIL. Please go ahead.
Yeah. Hi. Am I audible?
Yes. Please go ahead.
Yeah. First question is regarding the industry as a whole. We've seen the couple of quarters good growth. What's now the industry competitiveness? Any price cutting from the competitors to get the market share and all these things?
Sorry, I missed your name, though.
Karan.
Karan, so I think on the industry competitiveness, there is not much change, right? We are seeing different types of competition from standalone players, from pathology chains to the new-age players, right, and also the discounted players. I do not think, at least for the last three or four quarters, I would say it is status quo. It is a single competition that we are seeing from the markets that we are operating in, right?
Coming to the market share, etc., these numbers are something that we also get from many firms, but we are not sure about any exact number because different research firms have different projections, right? Overall, if you see at a country level, they say that this diagnostic market is expected to grow at 11%-13%, right? Whereas we are growing slightly at 15%-17%.
Again, we will have to wait and see for these numbers because every year they publish slightly different numbers with 1%-2% here and there. Otherwise, on the competitiveness, I do not think there is much of a change or any new competition that will have come in the last four quarters.
Okay. Okay. For this direct-to-consumer, direct-to-customer channel, we have 93% kind of share. In the future, do we think that we are valuing this maybe from this one stage to go to B2B side, this kind of changing strategy to get the market share and growth? Or that we are sticking with this B2C channel?
No, Karan. We have been focusing on B2C. 92% is B2C. We do not foresee significant dilution in that proportion going forward as well.
Any other complicating things, can you share? Of the repeat patients from the existing network hospitals? Because obviously, you're connected with the hospitals, and they are referring to you then. Any metrics that you can track?
Sorry, but we're unable to hear you. There's a lot of disturbance.
Hello. Now I think it's clear. Just saying one thing. Any metric that we can track, that the hospitals are referring the patients to you? Repeat patients, numbers, or anything kind of this number? Obviously, the hospitals are referring patients to you guys in the B2C side. Anything?
Hospitals do not refer patients to us, Karan. A customer who is basically walking into a hospital probably decides because in India, diagnostics is an out-of-pocket expense. The customer decides where he would like to go, pay, and get his test performed. The customer who is actually undergoing the test decides that he would like to come to us. Hospitals do not send these cases to us.
The cases that the hospitals send to us are called corporate tie-ups, which we do have with 100-150 kind of bed nursing homes. That is something that they send. That does not come in the B2C portion that we are talking about. This is a customer base where the customer is choosing to walk into one of the Vijaya Diagnostic Centre locations and get his test performed.
Okay. Okay. Thank you.
Thank you. The next question is from the line of Vivek from Emkay Global. Please go ahead.
Hi everyone. Good evening. Obviously, you've heard the questions. I just wanted to understand firstly on the total revenue or total growth front, right? Like you said earlier in the call that the growth outlook is looking better so far. Can you explain it in terms of the operational metrics? Like, how do you see the volume and the realization panning out in terms of the growth when you say the growth is looking better? Is the growth uniform across the geographies where we operate, or is there any one particular geography driving growth?
Sure. If you look at this quarter year-on-year, the volume growth, I think, goes to 8.2-8.3%. The realization growth has been around 1.8%. Okay. If you look at our overall guidance or our yearly number, out of the 15% revenue, around 13% is volume growth, and 1.5%-2% is the realization growth.
Coming to your other question, basically, seeing significant investments are going into outside Hyderabad, right? While Hyderabad continues to grow, right, because we are investing in Bengaluru, Kolkata, West Bengal, and Pune, right, you will also see the growth, the higher growth in volumes coming from these geographies because a lot of investments are going into these markets.
Understood. Understood. Just in terms of these geographies, right, firstly coming to the Bangalore geography, what do you see the core factors contributing to the Bangalore growth? How do you see the growth panning out in Bangalore? Similarly, firstly for Bangalore, then I'll ask for others.
See, Bengaluru. We just launched Bengaluru six months back, right? Ideally, for the first one to one and a half years, obviously, this volume is when you grow because there is no scope of taking any price increase in the first one to one and a half years, right? Because we just started our operation, right? Obviously, it is a volume growth that will drive the revenue in Bengaluru. As and when we open more and more centers, we will see more growth coming from this market. Similarly, in Kolkata, there was one center. Other than Malinaur, there was one center in the name of Vijaya, right? Then we just launched three more centers, and we are going to launch two more centers.
For the next 18 months to one and a half years, the growth actually will be driven by volume, not by price, as we are putting more and more hubs in this geography. Similarly, in Pune, after taking over PH, right? We just launched two hubs and two spokes. We are looking for a few more spokes. Even in this geography, the price is not going to—we will not take the price out. It will be the volume out. See, overall, if you see in Hyderabad as well, right, we have been present for more than 45 years in this market. Our concentration was never on price. It was always on the volume. I think in the near term, in the near term, maybe like one to two years in the near term, the growth, whatever you see across these markets, could be volume and not by price.
Okay. So just two questions on this side. Firstly, do we see—I understand realization is not what we are looking for in terms of growing the revenue, but do we see any price hikes in the near term? Secondly, just wanted to understand in terms of the break-even timelines in each of these cities, right, the non-Hyderabad cities. Could you throw some light on that as well?
In the new geography, Vivek, kind of the guidance that we give on a break-even is one year because it's a new geography. It also takes a little bit of time to stabilize. These two centers have broken even earlier does not mean that the guidance will change. It's going to be one year. In terms of price increase in the future, that would probably depend on a lot of things.
Like Sivar mentioned earlier, if there's too much of impact on the input pricing because of this dollar fluctuation, then there's not going to be any other route than to probably take a slight increase. We are waiting and holding on to that for the time being because we've always wanted to be affordable and the lowest in the market that we operate in and in the landscape that we are in.
We will not be able to probably give you a confirmation whether there will be an increase in pricing. We'll just have to wait and watch. Also, what happens is an importing of the equipment. Sometimes there's a certain margin that we can play around with, but if there's too much of increase in the equipment cost itself, then obviously there's going to be a little bit of differentiation in the pricing in that particular market.
Understood. So what you said in terms of break-even, right, that usually across cities, it's one year, right? During that time period, I mean, what's the impact on the CML side of things in terms of whenever we launch a new center? If you could throw some light on that.
It all depends on the number of centers and the geographies that we launch. Like we said, we estimated the drag for the current year because the plan is to launch 10 hub centers, right? We estimated a drag of 1%-1.5%. If you actually see because the centers are performing better than expected, the overall drag is less than 0.5%. Still, we are able to deliver the 40% margin, right? It all depends on the timing and the number of centers that we launch. If it is like one center per quarter, you may not see much drag on a consolidated EBITDA number.
This drag that you say of 0.5%, this is for which period and how many number of centers that have opened?
That is like in the last nine months, we opened close to 10 centers. All the 10 centers put together, right? These centers came in during different times. One center opened in the month of April, two in May, two in June. Different.
Also, irrespective of the time, Vivek, what happens is these were all hubs and not stores. We were also basically looking at that drag because we said we will hire in advance and train because these were all different new geographies that we have to manage and operate. Because of that, also that you are seeing, Bengaluru probably took over very quickly and started doing well because these people were already well-trained in Hyderabad in one of the bigger centers. It depends on the number of hubs and the timing that they would open in.
Also, when we talk about the break-even, right, we could rent that part of our expenditure. EBITDA that you see on the P&L that we publish is because of India's effective loan, rent is part of the depreciation interest. When we say there is a drag in the executive terms, you may not see the similar drag on the EBITDA that we described.
Could you please repeat the part where you said about the rent and where it's included in the P&L? I guess your voice broke a little bit.
According to this India's 116 standard, right, the leases are part leases get capitalized as a long-term asset, and then w e now have the expenditure interest we charge to the PMSs, right? When we talk about break-even of one year, we include rent as an expenditure, and then we say that we have a broken even, right? Let's say if the actual drag is, say, 1%, you may not see that on the EBITDA that we report because rent is below EBITDA.
Understood. Any outlook from your end on the margin side of things for FY27? Also, I see in your presentation that you have highlighted H1, like how many hubs you are planning to launch. Could you throw some light on the second half of FY27 as well, along with the outlook on margins?
Since we are going to open two more hubs, we just opened two hubs in the last month, one in Nandyal and one in. We are opening two more in Q3 of FY26. Considering all that, we are still confident that we'll be closer to 40% EBITDA for the next half, which would be anything between 39.5%-40% EBITDA.
And for FY27?
For FY27 also, because the overall CapEx is anywhere between INR 100 crore-INR 120 crore, which is lower than FY26. The EBITDA margin is likely to be around 40%. Yeah. Because by the time, many of the centers that we open in the current year will break even, right? You will see a slight increase in EBITDA margin.
Got it. I guess we had said this earlier, but if you could provide your projected CapEx for FY26?
Yes. For FY26, the CapEx for the new centers is around INR 1.60 crores.
This is on the second half, right?
No, no. For the entire.
The entire.
This year.
Okay.
For the new centers, INR 160 crore. I'm saying that we've incurred the majority of the CapEx by H1.
Okay. Got it. Got it. That's it from my end. Thank you.
Thank you.
Thank you. The next question is from the line of Surya Patra from PhillipCapital . Please go ahead.
Hello. Yeah. Am I audible?
Yes.
Yeah. Okay. My first question was on the growth side. In fact, on the radiology growth, this quarter, we have seen around 20% growth, which is really strong, I believe, considering the kind of national holiday festive season we have seen in this quarter. What has really helped it? Or do you think it is a normal performance despite the relatively weaker season?
Currently, the growth year-on-year is about 16% plus on the radiology. Like you rightly said, yes, to a certain extent, the growth was impacted by the national holidays. At the same time, if you see in the last one year, we opened more hubs, right? Close to in the last nine months to one year, we opened more than 10 hubs, right? We have seen centers like Bengaluru and Kolkata performing well.
Like we say, whenever we open, launch a new hub for the first one year, the revenue is generally dominated by radiology. In the first six months, in fact, the advanced radiology dominates. It will be like 70% of the total revenue being contributed by that hub. Because of these reasons, you still see the radiology revenue being strong. In spite of a dull season, you still see the revenue growth from radiology at 16% plus.
Yeah. I got it. Can you just clarify the kind of a center mix? See, in fact, Hyderabad, is it 95? Rest of Andhra and Telangana, it is 33. 22 Pune, Kolkata around 7. Balance is 2.
Kolkata is five at the moment. We'll be opening two in Q3. That will add to seven. That will be by the end of year.
Okay. Okay.
Bengaluru is two as of now.
Okay. Fine. In fact, here, in case of Pune, the revenue per center, if I see, we have been obviously seeing a kind of a steady progress, but it is still much lower compared to the kind of a normalized revenue per center that we have in the other places. Is it because of the lower number of hubs that we are having in Pune? Whenever those hubs will be added, then subsequently, the related revenue per center will improve. In some sense, when can we see improvement to the normalized level, and what are the triggers for that?
No, no. It is not because of that. Pune is an acquired asset. When we acquired Pune, having three hubs, three spokes, and the rest of the centers are pure collection centers where, out of the 20-plus centers that we have now, only five are hubs, five are spokes, and the rest of the centers are collection centers where all these centers contribute only 5% of Pune's revenue.
Ideally, in Vijaya Center, we do not have only collection centers, but since it is an acquired asset, we acquired these collection centers as part of the acquisition. That is the reason if you divide the revenue of the centers and things, it will look like it will be lower than the company's average. Otherwise, if you see Pune, if you see the existing network, the old network, only on the hubs and spokes, it is more or less in line with what we have in our core geographies.
Okay. Regards to Bangalore entry, we have looking at the kind of population density of Bangalore, and we have already successfully penetrated there with two centers in Bangalore. Could you give some sense, given the kind of success story what we have already built here in Hyderabad, over the three years, how big and how substantial or how successful this Bangalore can be for Vijaya?
Bangalore is going to be a very long-term play. Even in Hyderabad, I think we took a lot of time to come to this place. Obviously, yes, I understand, considering the current bandwidth and the teams and the capital that we have, right? Because of Bangalore giving us the right pillar, there is a lot of vacuum for a branded diagnostic center. Like Ma'am said, we already finalized one flagship center and are looking for two more hubs, right?
I think by end of FY2027, which is like one and a half years from now, from two hubs, we may move to five hubs. Parallelly, like Ma'am said, we will be looking for spokes. Again, even if you see our earlier conversations in Kolkata, when we said two, three, but we finalized about seven hubs now.
As and when the opportunity arises, we will be on the lookout for the locations. As and when the opportunity comes, we will be taking these properties on leases. It is sometimes about finding the right property in the right location. That also matters when you are a B2C business. That way, if you see, it is going to be a long-term plan, but at least you will see two hubs becoming five hubs by end of FY2027.
Okay. Can you give some sense about the competitive scenario in Bengaluru, whether you are facing more competition from there or it is not that so if you consider your home market, that is Hyderabad?
All of the markets are competitive. None of the markets are not non-competitive. The landscape remains the same. In Bangalore, because it's also more in terms of it works like Hyderabad, you have a lot of chains, smaller localized chains that have four to six branches integrated in nature. Probably also, considering the kind of traffic and chaos and the lifestyle of Bangalore itself, every region has a player.
We were pretty strategic in probably choosing our locations in Bangalore. We did a lot of study, went into what we would go to the market with. We chose locations where there was no three Tesla, there was no Cardiac CT. There was some differentiation that we took. We wanted to give it some time, build out the business. That worked well. That's how we're also going to be looking at newer areas in Bangalore. All of the markets, including Kolkata, there is intense competition. We are a differentiated player. We do not keep changing what we do. We're good at what we do. That is specialized advanced radiology with pathology work.
Okay. Yeah. Thank you, Ma'am. Just last one point. Regards to pathology. So we have obviously seen a kind of relatively weak season against a strong season last year. Also, rain was one of the factors. Is it fair to believe that the acute season of Q2 got shifted to Q3 and hence also anticipate a relatively stronger Q3 than the normalized spend?
I should say that we had a healthy season, and we should be happy about it. As long as I would anticipate and be optimistic about a sick season. I'm not assuming that. I'm thinking we will have a normalized Q3 as usual. That's also a reason why we said we are confident about that 15% overall year-level growth. We should be happy that we were healthy, and there's a lot more water in India.
Thank you, Ma'am. Yeah. Thank you, Vijaya.
Thank you.
Thank you. The next question is from the line of Sumit Gupta from Centrum. Please go ahead.
Yeah. Hi. Good evening. Am I audible?
Yes, you're audible.
Yes, sir. I just want to understand on the market share aspect in the four markets of, let's say, Hyderabad, and how the trend has been in terms of volume share or overall market share in radiology and pathology segment. Like we said, we do not have any recent reports. The reports that we are basically tracking were two years old. If you go by the reports, the numbers will not change as of now.
We still feel that we are less than 15% of the overall Hyderabad market, including hospitals. Maybe if we remove hospitals, then it will be slightly higher. The other markets, we are at a very nascent stage, right? Market share with Kolkata, although we just entered, it has been two years, and Bengaluru is a very recent entry. We do not have any reports from the past two years, either in 2024 or 2025, for us to comment on the market share.
Okay. In the radiology segment, don't you have any entire market share, right? In, let's say, Hyderabad market?
Again, Sumit, basically, if you see all the old reports, they go generally at a country level or state level. The revenue, even the volume side, there may be a lot of difference. In terms of revenue, pathology is about 50-55%. Radiology is considered to be 45-50%, right? Here, for us, pathology is about 65%. Ideally, in that scenario, if you see, our radiology share will be lower than pathology share.
For also the other reasons, because in Hyderabad, all the competitors, if you take player number 2 to 10, 15, everybody is integrated in nature, right? We have a few hubs with a lot of spokes, whereas many of the other integrated players are more in hubs where the radiology revenue dominates for them, right? Also, there is a lot of pricing differential in terms of radiology when you see in hospitals. With all these factors, even though we do not have anything concrete in hand, we feel that radiology share will be slightly lower when compared to pathology.
That's true. Thank you.
Thanks. Thanks.
Thank you. The next question is from the line of Rajendra Singh, an individual investor. Please go ahead. Mr. Rajendra has dropped the line. We will go to the next participant. Mr. Rishi Modi, an individual investor. Please go ahead.
Yeah. Suprita, can you hear me?
Yes, Rishi.
Hi. Secret, I'll ask you quick questions for you, and then I have some for Vijaya, and we can take it offline. On the Pune front, right. Just mentioned your Bengaluru break-even kind of early because it will be Hyderabad team leading the operations for more smoother functioning.
I'm sorry. I'm not able to hear you now. I'm waking up.
Can you hear me now?
Yeah.
Yeah. I was saying you mentioned your Bengaluru break-even was partly attributable to your Hyderabad team leading the operations there. Pune, from what I understand, is a newer team now. Just wanted to understand if it's just a similar Hyderabad team relocating to Pune or you've hired some locals, and how confident are you? I'm just trying to understand the dynamics there.
It's not the Hyderabad team moving there. Bengaluru was an entire Bengaluru team probably spending close to months in Hyderabad getting trained to be able to handle and run that geography. That is also a reason why in the last quarter, we said there'd be a slight drag, right? When you are opening 8-10 hubs, you will also need that level of staff to be trained in your core market to be able to operate in these different geographies.
The entire Bengaluru team, even though the centers were opened within probably Yelahanka and HSR 10 days apart, the team was appointed almost four months earlier and sitting in Hyderabad, actually in one of the centers. Pune was an acquired center, and Pune saw a lot of people actually go from Hyderabad to help them settle down, unlike Bengaluru, which is an existing center with almost 20-plus years of legacy there.
These are two different things. Pune is something that we will want to probably train the existing team, right? We cannot move them to Hyderabad. Pune also had a lot of business that they did on their terms when they were running it.
Now streamlining those processes, probably cleaning it up, getting certain things into place, even though we would have changed the back-end ERP and all of the systems, getting the actual operational workforce to think and align to the central team takes a little bit of time. There is a large team that actually spends time in Pune doing all of this. That is the reason why we opened two hub centers, which we had guided earlier, that they will give it some time to stabilize. Once that is done, we will see a lot more centers opening up.
The older centers in Pune to grow have capacity issues. They are all 3,000-4,500 sq ft centers where you will see the entire load come in in the morning because of the fasting requirement. There is no other way to grow the old existing centers. At the same time, I will have to add newer spokes, which is what we are doing. Also aligning the team to think as per the central team requirements. In fact, the lab team spends a lot of time from Hyderabad and Pune even today.
Got it. Got it. All right. Maybe a matter of two, three quarters when we start seeing some double digit growth there.
Yes. Absolutely.
Second, I wanted to understand this. It's been a bit of a pressure at the KMP level within the group over the last year, year and a half, I would say. Just wanted to understand now with some sort of, I don't know, I don't even call it vacuum, but some space created in that KMP layer. How does that alter your center?
How attrition has been in every level in our industry. If you see, actually, the CTO is kind of unfortunate to see that he's exiting. He comes with a lot of extensive experience in the IT industry itself, right? When he was coming in itself, it was even though however vocal and transparent you are, sometimes it's their core interest. Today, I think probably he feels that AI is something that he's interested in.
When intent wants to learn and grow and that appetite is in their own field, then nothing much that probably I could do. That's definitely very unfortunate. Shiva is family. It doesn't matter whether he's here. He moves on. Shiva came in about seven, eight years back. He's played multiple roles, worked multiple hands, has done different things. I don't know how I'll fill Shiva's vacuum.
There's, at the same time, a lot of people you've been seeing at different layers. We've always told you and the team that we hire, whenever we see good talent, that will continue. There's a lot of mid-level and senior mid-level teams that we've built over the years. They're all there. There's not too much to worry about. He's family now. That's something I cannot probably say.
I understand that. If I were to think of it this way, at least till last year, we had the confidence that opening 15 centers is now more of an easier job. Maybe the team can move to, say, a 20 center per year addition. Do you think now that?
Probably the same things that we're talking about were never a part of the growth strategy because it's more of probably handling the operational and the IT strategy, right? The technology bit was something that we've been time and again saying that we would like to invest and grow it.
That is when we said we will bring in a CTO of that kind of caliber. We will continue to do that. We will bring in somebody in that position as soon as possible. That is a separate thing that we would look at. If you say 15 centers was easy, then I won't say it was very easy. It won't be easy now also. Fifteen centers is something that we are very confident about. I was hoping that probably we'll get to a level where we do a little more than that.
Do the spokes.
We do the spokes. The entire year of your FY25 and 2026 was about adding the base of hubs. Vijaya has never seen an addition of so many hubs earlier. Once we stabilize and break even, you will see a lot more in FY27, 2028, 2028, 2029 room probably to see a lot more spokes coming in. None of these departures would probably make an effect in that growth plan for sure. There is definitely talent that is required.
We will continue to keep taking people, adding people, irrespective of whether we have people on board. That should not be probably a worry for anyone to say that there is a gap there, there is a vacuum there for growth. Definitely no.
Okay. Got it. That's interesting to hear. Thanks. Vijaya, I'll reach out to you offline for some.
Sure. Sure.
Numbers. Yeah.
Sure. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question and answer session. I would now like to hand the conference over to Dr. Suprita Reddy for closing comments. Please go ahead.
I would like to thank everyone for attending the call. Should you need any further clarifications or any other information about the company, please feel free to reach us. Thank you.
Thank you.
Thank you.
On behalf of Vijaya Diagnostic and JM Financial Institutional Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.