ICICI Securities has upgraded Vijaya Diagnostic Centre to 'Buy' following strong Q1 FY27 results. The company reported a 22.8% revenue increase and improved profit margins. Investors may track the company’s planned network expansion and its performance in competitive markets like Bengaluru and Pune.
ICICI Securities has issued a 'Buy' rating for Vijaya Diagnostic Centre, setting a target price of Rs 1,600. The upgrade follows the diagnostic chain's robust financial performance in the first quarter of fiscal year 2027 (Q1 FY27).
In the recent quarter, Vijaya Diagnostic reported a 22.8% year-on-year revenue growth, reaching Rs 231 crore. Profit After Tax (PAT) also saw a significant rise of 37.6%, totaling Rs 53.1 crore. A key highlight for the quarter was the improvement in operating profit margins, which reached 42.7%, increasing by 356 basis points compared to the same period last year.
The company’s growth is currently driven by an aggressive network expansion strategy. As of June 30, 2026, the company operates a network of 166 centers, consisting of 51 hubs and 115 spokes. Management has outlined plans to add nine more hubs and 10 to 12 spokes during the remainder of the fiscal year. This expansion is focused on strengthening its presence in key markets like Bengaluru and Pune, where the company is looking to increase its market share.
While the outlook remains positive, investors may monitor the risks associated with this rapid expansion. The diagnostic sector is highly competitive, and the company must navigate the initial costs of setting up new facilities. New hubs often require time to reach profitability, and the company's ability to maintain profit margins above 40% will depend on how quickly these new centers can start contributing effectively. Additionally, management has projected revenue growth between 17% and 19% for FY27, making operational execution and demand in new locations key factors to watch in the coming quarters.