Vijaya Diagnostic Centre Limited (NSE: VIJAYA) Q1 2026 Earnings Call dated Jul. 28, 2025
Corporate Participants:
Unidentified Speaker
Sunil Reddy — Executive Director
Sivaramaraju Vegesna — Vice President – Operations
Dhiren Gala — Assistant General Manager – Strategy & Investor Relations
Analysts:
Unidentified Participant
Amey Chalke — Analyst
Nancy Yadav — Analyst
Anshul Agrawal — Analyst
Manik Bansal — Analyst
Siddhant — Analyst
Abdulkader Puranwala — Analyst
Lokesh Manik — Analyst
Surya Narayan Patra — Analyst
Sumit Gupta — Analyst
Harshal Patil — Analyst
Gaurav — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Vijaya Diagnostic Q1FY26 earnings conference call hosted by JM Financial Institutional securities Limited. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Amit Chalkar from JM Financial Institutional securities Ltd. Thank you. And over to you sir.
Amey Chalke — Analyst
Thank you Pari. Good evening everyone. I am on behalf of GM Financial. Welcome you all to the 1Q FY26 earnings call of Rijia Diagnostic at the outset. I thank the management of Rijia for giving this opportunity to hold the call. I’m looking forward to have an insightful interaction on the quarterly earnings and the outlook here today from the company. We have with us Mr. Sunil Jagdi, Executive Director. Mr. Shiva Rama Raju, Vice President Corporation and Mr. Viren Gala, Assistant General Manager Strategy and Investor Division. I now hand over the call to the management for their opening remarks.
Over to you sir.
Sunil Reddy — Executive Director
Thank you Amer. This is Sunil Reddy, Director. Thank you for hosting the call. So good evening everybody and thank you all for joining this call. I will begin by sharing the business updates followed by the financial highlights for the quarter ended 30 June 2025. I’m pleased to begin my address on a positive note highlighting that we have delivered a strong year on year revenue growth of 20.4% with our Hyderabad market’s contribution returning to double digit growth this quarter. The strong performance was largely driven by volume and change in the test mix. I’m also happy to state that all the new hubs which we have started in Pune, Bangalore and West Bengal are up and running with steady footfall.
We remain optimistic about achieving breakeven across all centers within the 12 months with one hub center in Bangalore on track to reach breakeven even earlier than the estimated timeline. I’m also pleased to share that our Nizamabad hub center in Telangana has achieved break even within two quarters of its operations. Looking ahead, we will be commissioning three hubs in Q2 of FY26 across our core geography in West Bengal. The other two hubs in West Bengal are also on track to be operationalized in the second half of FY26. Earlier calls we have mentioned that we will be doing 10 hubs in this financial year.
So just keep in mind that I’m just giving updates on that and we are on track to do that. I’ll also take you through the financial performance and key developments for the current quarter. The consolidated revenue for the current quarter stood at 188 crores reflecting a strong revenue growth of about 20.4% year on year. The revenue growth was driven by test volume growth of 17% year on year and change in the test mix. And the patient footfall also grew by 14% year on year. Coming to Ebitda, we delivered a healthy margin of 39.1% in spite of underscoring the strength of our business model.
And this is in spite of the drag from the launch of multiple hubs during the current quarter. The strong growth momentum in our core network drove meaningful operating leverage which helped us in delivering strong margins. And also the pat margin is very healthy at 20.4%. Coming to updates on the capital investments. As discussed earlier, we commissioned a total of five hubs and one spoke in the current quarter. And again the background is that in this year we planned 10 hubs in the financial year. So already five hubs have been done. To conclude, we are encouraged by the positive reception our brand has received in newly operational hubs in new geographies.
And also our existing network continues to witness growing footfalls as Vijaya steadily gains market share driven by our integrated offering with comprehensive portfolio under one roof, we are well positioned to capitalize on the evolving diagnostic landscape where increasing awareness is driving greater emphasis on brand, trust, quality and wellness. That’s all from my side and I would now request the moderator to open the line for questions and answers. Thank you. And thank you Amir for hosting the call.
Questions and Answers:
operator
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 touchstone 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 Nancy Yadav from LG Grow. Please go ahead.
Nancy Yadav
Hi sir. Thank you for the opportunity and congrats on a great set of numbers. I just wanted to get two numbers. Could you tell me the net cash number for the quarter end?
Sivaramaraju Vegesna
So the cash position is on 30 June is about 270 crore. And if you take the net cash after the capital creditors it is about 220 crores.
Nancy Yadav
Okay, understood. And so could you also give a. Give an idea of the shift in these liabilities from the previous quarter.
Sunil Reddy
We didn’t get the question Nancy, could you repeat that?
Nancy Yadav
I’m just trying to ask the lease liabilities number as well.
Sunil Reddy
Lease liabilities?
Nancy Yadav
Yes.
Sivaramaraju Vegesna
So we have addition of five hubs in this quarter, Nancy, out of which two hubs the rental started in the last quarter itself. So if you see the action moment, I think it is about crore increase when diabetes is about a crore.
Nancy Yadav
All right, understood. Thank you so much sir. All the best.
operator
Thank you. The next question is from the line of Anshul from MK Global. Please go ahead.
Anshul Agrawal
Hi. Thank you for the opportunity. Hope I’m audible.
Sunil Reddy
Yes. Anshul, how are you? Good evening.
Anshul Agrawal
Good evening sir. All good. Sir, a couple of questions. First on any reason for this strong momentum in a seasonally weak quarter. Is it because monsoons have been, monsoons have come in quicker than anticipated or was there any pent up demand from Q4? Any particular reason for the strong volume growth in the quarter?
Sunil Reddy
No, I would say it’s just I think a function of the brand in the home market. What has happened is that we are seeing all centers getting more footfalls and more business is shifting to us from maybe the unorganized sector. And as you can see the new centers are all outside of Hyderabad. So the, I mean people like you have expected that this would be a drag on business and ebitda but that has not happened. Bangalore is doing well, is doing well. Whatever we have opened in Kolkata is doing well. So you know, everything is doing well.
Anshul Agrawal
So you’re calling that there’s no one off as such because of any particular reason and this growth momentum could continue for the remainder of the year.
Sivaramaraju Vegesna
So one off can be to, we don’t know the extent. So it can be only just 1, 1.5% which happened in the initial days of April, right from April 1 to 10. But otherwise what we have seen in the quarter is across these three months we have seen, you know, the average daily revenue went up from May to April and from June to May. So while we don’t want to comment anything on the exact number going forward but then it’s basically for the last seven to eight quarters except one quarter I think we were doing fairly well growing more than, you know, 17 18%.
Anshul Agrawal
Got it. That’s useful. And to allude as a follow up question to what Sunil sir was saying that you know, if you could quantify the drag because of these newly commissioned hubs in the current quarter, I’m trying to understand. There’s hardly any margin dip in the current quarter despite commissioning these hubs. If you could just continue the drag.
Sunil Reddy
So basically Anjul, that is what I was saying that there is no drag. All the hubs have actually done well. The new hubs in new geographies have done well. So because of that there is not much of a drag on the margins or the revenue.
Sivaramaraju Vegesna
So yes, like sir said, the drag was much lower than what we expected because these centers are doing well and also because of the leverage that we are getting from the growth from the existing network that helped us keeping the margins intact at 39.1%.
Anshul Agrawal
Just one clarification on this, Shiva. Generally when hubs reach about 50% of their potential or slightly lower than that, we used to break even. Does that still hold true or. Very difficult to fathom whether you know, within the first two months itself the ramp up has been so strong.
Sivaramaraju Vegesna
So basically again it depends from hub to hub. But generally the hubs will break even when they reach 33%, 1/3 of its capacity. Right. And you know, like sir said, so basically the drag initially that we expected was slightly higher number but it was only close to around 1.2%. But again because of the operating leverage, you know, the operating leverage played well and that basically took care of this 1.5% of 1.2% of drag.
Anshul Agrawal
Got it. And all expenses of these commission hubs would be in Q1, right? There would not be any
Sivaramaraju Vegesna
for certain hubs. It is only half quarter because we started centers in Kolkata and also the centers like Kalyan Nagar, they started only in the month of May. So you know, it’s only like about close to, you know, one, two and a half months of the operational expenditure.
Anshul Agrawal
Got it. Got it. Just one more question from my end. Have we started finalizing plans for Hub editions in FY27? How does FY27 look like? And any guidance on CapEx numbers for both FY26,27 would be useful.
Sivaramaraju Vegesna
So basically like we always do, we are scouting for locations across these geographies that we have mentioned, both in our core geographies and also Bangalore, Kolkata, Pune. So maybe we’ll be in a better position to answer this question by the next call because still we are in talks with the landlords and we’re still scouting for a few more locations. So maybe by next call we’ll have an answer. Anshul.
Dhiren Gala
Anshul. For FY26, the guidance is the overall CAPEX for the newer centers would be around 150, 155 crores and replacement capex would be anywhere between 2 to 3% of the overall top line.
Anshul Agrawal
Got it. Thanks Dan. I have other questions. I’ll fall back in the queue. Thank you so much.
operator
Thank you. Before we take the next question, we would like to remind participants you may press star and one to ask a question. Thank you. The next question is from the line of Manik Bansal from Master Capital Services. Please go ahead.
Manik Bansal
Thank you for the opportunity. So my question is like what is the strategic rationale behind not participating in the CCP model that is working under the national health mission right now that is gaining a lot of traction.
Sunil Reddy
Sorry, we could hear you actually.
Manik Bansal
Hello, my voice.
Sunil Reddy
Yeah, now much better.
Manik Bansal
Yeah. So my question is like what is the rationale behind not participating in the PPP model and the national Health mission that is gaining a lot of traction right now.
Sunil Reddy
So we discussed this in many calls earlier. PPP is not something new and we have looked at it on many occasions earlier. So there are two factors to ppp. One is that when you do business with governmental PPP models the capex remains the same but your realization, price realization drops. And secondly, the receivables become sometimes a problem. So we have chosen as a company, our business model is that we stay away from bpp. It’s just a choice of the company.
Manik Bansal
Okay, but if we look at the realization on realization, friend, there are some labs that are operating on pay basis like they. They collect from the patients itself. So. So there is no case of getting reimbursement from government.
Sivaramaraju Vegesna
No, it’s always a mix. And it also depends on the tender. There is no such contract which says only, you know, on cash mode. Right. So even across geographies different PPPs you have a mix of both cash and credit. Okay, but like you know, sir mentioned, so the ARP is drop and it requires a different, you know, like sir said, it’s a choice that company. We want to focus on B2C. If you have to do business on multiple, you know, channels, B2B, B2C and PPP. It was a conscious call that we want to focus on B2C and grow B2C.
Manik Bansal
Okay, thank you. Thank you.
Sunil Reddy
Just to add to that, I would. Much rather open a center opposite the government hospital and do B2C business rather than doing PPP inside the government hospital.
Manik Bansal
Why is that? If you can just elaborate a little.
Sivaramaraju Vegesna
Like we said, it was more of a choice. Right. Because of the receivable issues. And also the capex remains the same and the realization straw. You know, our Strength is like, you know, scaling up our model in B2C. And the Focus, you know, the focus of the company and the management is to grow that part of the business.
Manik Bansal
Thank you. Thank you, sir.
operator
Thank you. The next question is from the line of Siddhant from Tusk Investment. Please go ahead.
Siddhant
Hello? Yeah. Am I audible?
Sivaramaraju Vegesna
Yeah, yeah.
Siddhant
Good evening, sir. So my first question is regarding the old center volume growth. What sort of growth are we seeing in the industry in terms of the old centers?
Sivaramaraju Vegesna
So in fact, you know, the world centers, like, you know, if you see the centers which were opened two years back, right. If you take the entire set, right. So they have grown at a CAGR of say 11% which contributed, you know, in terms of revenue, it has contributed almost close to 15% plus. Right. But in terms of volume, they’ve grown close to 11. In terms of patient footfall, they’ve grown about 11%. And also in the test, if you see number of tests, they have grown roughly around 13% in the whole centers.
Siddhant
So that means that if revenue has grown by 15, then we are seeing the volume plus the price mix. So like 3, 4% has been the.
Sivaramaraju Vegesna
Price hike, not the price increase. So if you actually see. Because since we’ve opened, you know, few of the hubs, even in the last two to three years, we have done a lot of hub edition, right. It is basically because of the hub edition, right. And if you also see the mix, revenue mix of this per quarter, radiology was at around 39%, whereas pathology was 61%. And again, out of radiology, it was predominantly because of the advanced radiology. So the price effect is only about 1 1/2 percent. The rest is because of the test mix that happened during the quarter.
Siddhant
Okay. So basically the old center volume growth is anywhere between 11 to 12% volume growth.
Sivaramaraju Vegesna
So test volume is still at 13. That 15, 16% of growth was delivered by the 13%, 13, 14% of the volume growth. Test volume.
Siddhant
Okay, we are talking about the old centers only.
Sivaramaraju Vegesna
Yeah. Overall, at a company level, 20.4% growth was, you know, on account of, you know, 17% test growth and 14.4% growth.
Siddhant
Correct. So sir, going forward, like how like this number should we project like the old center or industry growth, will it be in the similar range or can we expect this to go up?
Sivaramaraju Vegesna
So generally, see, when we guide 15%, right. So we always said 15%. When we guide 15% of revenue growth, I think that will be backed by about 13% of volume growth. So out of which 9 to 10% of the growth would be coming from the existing centers and the rest is from the new centers.
Siddhant
So that 9 to 10% will be the thing going forward. Also, like we are not expecting that to increase. Okay. Okay. And so we are aggressively entering the West Bengal market, especially in Kolkata and other parts of West Bengal. So what sort of growth are we seeing in this region versus like Telangana and Andhra Pradesh?
Sunil Reddy
So Siddhan, firstly we are not entering. We are fully entered into West Bengal. We have centers in West Bengal which are fully operational. Both in South Kolkata as well as in VIP Road, Krishna Nagar, Darasad. So we are fully there. Right. These centers are doing well. They’re ramping up.
Sivaramaraju Vegesna
Well, so still they are in the ramping up stage. So if you see in terms of growth, it may look like, you know, close to 70, 80, whatever personally, but there ramping up, still in the ramping up phase.
Siddhant
No, I just wanted to understand like we are entering the eastern market. So how is the growth overall in the eastern market like versus our home market which was Telangana and ap? So we’ve entered eastern India. So what sort of growth are we targeting? Or we are already seeing in eastern India. That’s why we have shifted our base. Or maybe we are wanting to target this market as well.
Sivaramaraju Vegesna
No, Sitan. So actually see here more than personally we should see in qualitative terms. Like if you see the earlier, like the pre2021, we had only one center which was Medinova. Right. On that base you are seeing now we started adding multiple centers. So what we are basically seeing is to at least in the next two to three years, it is like opening of more and more hubs followed up by spokes. And you know, how do we ramp up, you know, 50 to 100 crore kind of a revenue in this geography is the target more than in percentage terms, you know, in the absolute terms, you know, how do we, how do we go to 100 crore revenue, surpass that number in the next three years is basically the focus as of now.
And you know, for us to open more and more centers, you know, the centers that we have launched are doing well. You know, earlier Medinova did well and then launched VIP Road. It did break even within nine months. And afterwards also we are seeing good traction at the center. And even the recent centers, it’s hardly been just two to three months. And you know, the numbers are encouraging. So that is the reason why we are looking for more and more centers in this geography.
Siddhant
Okay, sir. And so in terms of margins, like what will be Our margin profile be for like a new center, like for zero to one or zero to two years versus a mature center more than three years. What will be the margin profile?
Sunil Reddy
Are you asking about east or specifically about overall?
Siddhant
Overall, like even if like any general 0 to 2 years of operational of a new center, what will be the margin versus a mature center which is a three plus.
Sunil Reddy
When we have declared our EBITDA margins done. So I think why would you want us to break that up?
Siddhant
Just to see how like in terms of projection, like what is how fast it is getting ramped up. Like are we making losses in the first year versus second or third year, then we open a new center.
Sivaramaraju Vegesna
No, but see again, when we say that we are breaking even on a center in two or three quarters, that basically means that we are not making losses on a new center. So beyond that, I cannot give that guidance. It would be wrong for me to give that guidance because it will be sensitive and it will be information for my competition. I. I don’t want to give that credentials.
Siddhant
Absolutely. Right. Right. Okay. So I’ll get back into the queue and thank you so much.
Sunil Reddy
Thank you.
operator
Thank you. The next question is from the line of Abdul Kadir Puranwala from ICIC Securities. Please go ahead.
Abdulkader Puranwala
Yeah. Hi sir. Thank you for the opportunity. My first question is with regards to, to PH or Pune as a cluster. So if we, if I recall it correctly, we had added couple of centers last quarter Q4 and you know, I think the revenues still are going growing at a mild 3,4% from this particular geography. So any color as to, you know, how the ramp up has happened at those new hubs and going ahead, you know, how should we look at Pune as a territory for growth.
Sunil Reddy
As Mr. Ahmed, I think we have acquired this company ph and of course they were the number one diagnostic brand in Pune when we acquired. But the only small constraint was that. You know, all of the centers were. Running at almost full capacity. So that is the reason why even in earlier calls we mentioned that we have to add new centers to kind of increase growth. And that is what we are doing. We are adding new hubs and new spokes in Pune right now. In terms of how to add colors. If you have any suggestions, please give us suggestions. We are happy to listen to you.
Abdulkader Puranwala
So I just recall that you are adding herbs. So just wanted to also understand. But the two new hubs you added in Q4, any color there as to how the ramp up has happened?
Sivaramaraju Vegesna
We added only one hub in Q4 and the second hub we just opened in the month of May. And the full fledged operations just started at the end of May. Right. So the one hub that we opened in Q4, you know, like we mentioned in the previous call also it took 12 month time when compared to the other hubs. But now if you see there is traction even in the Pune market and we have seen uptick in the revenues from the past one and a half months at Pune. So we’ll be able to give you more updates in the next con call.
Abdulkader Puranwala
Sir. Got it. And sir, just one more if I may on the EBITDA margins. So earlier we had guided that there would be an impact of say close to 100 to 200bps margins this year because of new operation. Now that you know, I think the operating drag is not that very significant. Is there any revision to the guidance what we had given earlier?
Sivaramaraju Vegesna
We are not revising the guidance. It can be 11 1/2% because there are 4, 5 more halves which are going to open right in the next two quarters. So as of now and even the Q1, like we said, you know, few of the hubs it was only one and a half months of know operations. Right. So at a year level still we want to maintain that guidance of one and a half percent. You know the EBITDA margin around 38 to 38% at a full year level.
Abdulkader Puranwala
Understood, sir. Thank you. And I’ll get back in.
operator
Thank you. The next question is from the line of Lokesh Manik from Balliam Capital. Please go ahead.
Lokesh Manik
Yes. Hi. Good evening to the team. So my question was on the index impact. If you can please quantify for depreciation. Bank of use assets and for interest. Lease line difference for this quarter.
Dhiren Gala
So the INDEAS impact for this quarter is around 1%. Around 1.8 crores. Okay. So out of that the interest impact would be around 1.92 and depreciation will be 0.95. So overall around 1.8 crores would be the impact for Q1FY26.
Lokesh Manik
That’s it for my slide, sir. Thank you so much.
operator
Thank you. The next question is from the line of Surya Narayan Patra from Philip Capital India Limited Private. Please go ahead.
Surya Narayan Patra
Thank you. Thank you for the opportunity. Sir. Congrats for the great set of numbers. My first question is about. Let’s say if I see the revenue per percent for the quarter in the slack quarter it is looking like the best so far. So what is driving this? Is it some kind of mix change within pathology or radiology what is driving this? In fact, since last if I see some 20 odd quarters there is a consistent expansion in the revenue per percent. And this quarter is looking like the best ever. So what is helping this number?
Sunil Reddy
Thank you, Mr. Surya. So actually so it is this, I would say the strong brand and trust that we have from our customers. What has been happening is that even in existing older centers we are seeing strong growth. And even though we are opening newer centers, new hubs and spokes are being opened. The growth in older centers is resulting in at a consolidated level. The numbers are looking very strong.
Surya Narayan Patra
Okay.
Sunil Reddy
By the way, we have always been very conservative in giving our guidance. So I would say we are conservative and we are also very lucky.
Surya Narayan Patra
So also on the if I just see the revenue per center also that is also been very, very consistent. And in the slack season we are seeing one of the strongest kind of revenue per center number although we have added new centers and which are not fully operational. So something is really helping, sir. What is that? I’m not able to figure it out.
Sunil Reddy
With pure pathology center.
Surya Narayan Patra
No, I’m saying. No, I’m saying. No, no, I’m saying I’m just revenue per center only on a broader basis. I’m looking at it. So I’m seeing one of the strongest number this quarter. So although it was a kind of relatively slack period and new centers has been added so is that there is a conscious of focus or approach that we are adapting to to improvise our revenue per patient. And that is how ultimately this center numbers are revenue per center or revenue per patient. Those numbers are getting inflated or in getting improved.
Sunil Reddy
Okay. There are two factors. One is firstly, this is not slack season. Typically we look at Q3 or maybe part of Q4 as being flax season. So anyway that is different. But also if you look at the mix, radiology has been slightly higher in this quarter, right?
Surya Narayan Patra
Yeah. That is clearly visible. 39%.
Sunil Reddy
Yes. So what happens when radiology is higher is your average revenue per patient will automatically move up. Right? Because the test.
Surya Narayan Patra
Yeah, yeah, yeah. So exactly. So I think this is the best number in terms of the radiology contribution for the quarter that we are witnessing. But in terms of the scope and the opportunity for the radiologist progression in terms of revenue share, if we see, see what is the, what is the maximum potential scopes in terms of the radiologist revenue shared to the overall company.
Sivaramaraju Vegesna
So Surya, so firstly see the advantage of the model itself like we discussed over multiple calls is that we are B2C integrated and creating that dense network in the geographies that we operate. Even if you take the Hyderabad market, which is almost 70% of our revenue in this market itself, time to time we’ve expanded the network. Right. And there’s already a large gap between player number one and player number two in this market. And with the awareness that is getting created over branded healthcare play which we have to certain extent we have seen in hospitals.
Right. And also many other things are, you know, playing out. If you see the wellness share last year, Q1, Q4,
Surya Narayan Patra
that is also support.
Sivaramaraju Vegesna
Yeah, Q1 is about close to 13.5% versus 14.2 now if you take home collection as a channel earlier we were at 2.5% of our overall revenue. We are at close to 3 point to 3.3%. And also the revenue that we are getting through digital means, there are multiple things that are working well for the company. And the advantage of becoming B2C players with dense network is that you get stronger year on year in the geographies that you operate which will allow you to inch the market share.
So that’s what I think to set an extent, we were seeing every year for the last three to four years. If you see, you know, Hyderabad is still playing well for us. Right. And you know, as a market, Hyderabad healthcare market is still growing at that double digit. I think being the strongest player with the trust that we have from our patients, I think that will allow us to, you know, grow in the double digit at least in the near future.
Surya Narayan Patra
Okay, one point about the wellness, sir. See there is a kind of. You are delivering one of the fastest growth compared to anybody in the industry so far as wellness is concerned. What is really helping you here? It is a, it is a kind of enhanced focus towards the packages, the number of packages that you offer or it is the kind of that for having package covering both radiology and cardiology. What is helping you to achieve a faster growth in the wellness compared to the overall market wellness growth trend?
Sivaramaraju Vegesna
It’s a mix of both. It’s basically the focus of the company and also the awareness that’s being created in the market. And you know, the coverage that we’ve increased, you know, to offer to our corporate customers. So it’s a mix of all the three.
Sunil Reddy
Just to be clear, when you look at any of the larger diagnostic players and you look at wellness in absolute terms, the numbers are not going to be very big. So any incremental change, if you really look at it in absolute terms is not very big. Right. So we are Getting more because of probably patient awareness is higher. Our digital marketing is doing better. If I add 1 or 2 crores. More in a quarter, that will look better. Yes, yes. In percentage terms you will see a significant number. But don’t, don’t go too much by the percentage terms. Look at the absolute numbers.
Surya Narayan Patra
This last one point. Sir, from my side, can you just tell me the number of the fixed center addition during the quarter which all the area that you have added.
Sivaramaraju Vegesna
So we have added two in Pune, one obviously Ambegam in the Thailand of Q4 and the second one was Kalyani Nagar. Then two in Kolkata in West Bengal. So one in Barasat which is Kolkata and then Krishna, a district two hours away from Kolkata. Then we added two in Bangalore which is Yalanga towards your Hebal and one in hsr.
Surya Narayan Patra
Okay. Sure, sir. Yeah. Thank you. Wish you all the best.
Sunil Reddy
Thank you.
operator
Thank you. A reminder to the participants, if you wish to ask a question, you may press star and 1. The next question is from the line of Sumit Gupta from Centrum. Please go ahead.
Sumit Gupta
Hi, good evening. I’m audible.
Sivaramaraju Vegesna
Yeah, you’re audible.
Sumit Gupta
A few questions. First is like from the newly opened jobs, how much incremental volume growth can we expect over the next two to three years?
Sivaramaraju Vegesna
Sumit, I think our guidance is always consistent from the time of IPO days, right. You know the guidance would be you know 15% of.15% plus of revenue growth backed by volumes which will be about close to 13% and 1.52% would be the price change in the price. So we would like to stick to obviously the, you know the effort that we are going, that we are putting is to surpass that. But then the guidance, we want to be consistent on our guidance.
Sumit Gupta
That’s fine. Just all I was looking from the newly opened hub. So how is the traction that you are getting in let’s say Bangalore and with respect to bank resting on market also altered the competitive scenario.
Sivaramaraju Vegesna
So like we told Sumit, competition scenario is the same always. Right. It is only that, you know every company has their own strength and you know that in terms of, you know, the kind of equipment quality people, you know, many other things that we have. And Bangalore, like we discussed earlier, you know there’s a lot of again branded healthcare play in terms of hospitals. And when you see an integrated diagnostics, you have very limited, you have more number of players with only two to three centers each operating at different pockets. That is where and with the strength of radiologists that we have, we definitely would leverage that strength and all these factors are helping us to get that faster traction in these geographies.
Sumit Gupta
Understood. And with respect to wellness, what’s the. Margin that wellness generally means? I understand it’s small with respect on the quantum side, but how much of.
Sivaramaraju Vegesna
It we should not actually we don’t track that separately. At a gross margin level obviously you will have some impact. But if you see wellness is, you know, wellness is that extra business that you do other than your nearest based business. Just by adding one footfall to a branch is not going to, you know, increase your fixed cost at that branch. It is only the variable cost which is like 30% of our total cost is variable and 70% of our total cost is fixed in nature. So at EBITDA level it doesn’t matter much. But yes, at a gross margin level you’ll have lower margins on the Ms.
Sumit Gupta
Right. So going forward also we can expect this 14% kind of contribution to stay. At this level or we can see some increase.
Sivaramaraju Vegesna
So it keeps changing between the quarters. But at a year level maybe I.
Sumit Gupta
Think on blended basis,
Sivaramaraju Vegesna
yeah. 14 to 15%
Sunil Reddy
typically in earlier in fact it used to be about 11 to 12. So 14 is actually at the higher end of the band.
Sumit Gupta
Okay. Yeah. I was asking because this has increased around 150. So going forward also we can expect this time to continue. So you are seeing stabilization around trading?
Sivaramaraju Vegesna
Yeah, yeah. At this range, yes.
Sumit Gupta
Understood. Thank you. All the best.
operator
Thank you. The next question is from the line of Harshal Patil from Mirai Asset Capital Market. Please go ahead.
Harshal Patil
Good evening sir and thanks for the opportunity. Sir, just one clarification. You did earlier say that out of the proper, out of the revenue per test increase about 1 to 1.5% would be largely because attributable to some price increases. So I presume that this would be ideally done in some select pocket or some select select category of tests for this quarter. So would that be a right assumption?
Sivaramaraju Vegesna
So every year yeah, we take select tests of select geographies. Right. It is not across the testimony, it is across a few tests.
Harshal Patil
Yeah. So going ahead I believe like further price hikes or something should be possible or shouldn’t be possible. I mean considering that we’ve taken for some select tests only. So.
Sivaramaraju Vegesna
So as of now see if you ask me, yes, it is possible but in this particular financial year there we have no plans of increasing the pricing further. Generally we do in Q1 of every financial year.
Harshal Patil
Okay, that helps. And so just second question. In our core markets, Hyderabad, we’ve been really going strong in terms of test volumes. And the reason you alluded to rightly your market share gains, I presume this would be more from the unorganized sector. So just extrapolating this and wanting to understand, like the new centers which we’ve been commissioning, they’re also kind of gaining some good traction. And we’ve been reporting some good growth numbers. So apart from the underlying demand, is there also this market share gain theory working around or. No.
Sivaramaraju Vegesna
So Harshal, definitely. Right. So. Because if you see Hyderabad, like we said, we are. We don’t have numbers in hand. But definitely we are gaining some market share. Because our competitors are not growing at this pace. And all the other geographies are new geographies. Right? Like Pune, Kolkata, you know, Bangalore. All these are new geographies where we just started growing. Right. So definitely. Yes. As we progress, at least for the initial years, we’ll be gaining some market share every year.
Harshal Patil
Okay, that. Thank you. And all the best.
operator
Thank you. The next question is from the line of Lokesh Manik from Balam Capital. Please go ahead.
Lokesh Manik
Yes, thank you again for the opportunity. My question was on pathology. So for sourcing, what is the model that we employ? Is it apex driven where you purchase the equipment and then the consumables or it is rental reagent model that many peers follow in the market. Which model do you follow out here?
Sivaramaraju Vegesna
It is reagent rental model.
Sunil Reddy
Mostly for routine lab testing. It is based on reagent rental.
Lokesh Manik
Okay.
Sunil Reddy
The most specialized lab testing, we end up buying the equipment.
Lokesh Manik
Okay. And the repair and maintenance cost would be on the OEM or this would be on our books.
Sivaramaraju Vegesna
If it is reagent rental, it is with the oem, not on our book. You know, if you purchase is, then it will be on your books.
Lokesh Manik
Great. Thank you so much, sir. That’s it for my side.
operator
Thank you. The next question is from the line of Gaurav from antique stockbroking. Please go ahead.
Gaurav
Yeah. Good evening. Congratulations, sir. On the gross margin trajectory. You know, we were seeing some softer margins, you know, last year, half H2 of last year. And for this year also, you know, given the forex, etc. We were expecting some input cost pressures and some gross mile decline. But gross miles have actually expanded this quarter. So anything that has changed, we’ve not taken pricing hike as well. So any structural change. And what should be the cross margin guidance for this?
Sunil Reddy
Firstly, Sourav, we are very sorry we disappointed you by giving higher gross margins.
Gaurav
No, sir, you didn’t. You didn’t. Sorry.
Sunil Reddy
But See, in our business, especially in a B2C model, you have to understand that price changes are not easy to do. So it only happens occasionally when our input costs go up. And if you look at input costs in the recent times, there have been a few input costs due to which certain tests, certain specific tests, yes, we have increased prices. But across the board, we have not increased prices. So as Shiva mentioned earlier, we have got growth basically because of volume and footfall growth.
Sivaramaraju Vegesna
And if you see the test mix, Gaurav, so 39% is radiology. Whenever radiology revenue goes up, you will see higher gross margins. Because the material consumption of radiology is much lesser than what you see in pathology.
Dhiren Gala
Also, Gaurav, within radiology, also, the advanced radiology component has gone up with the new hubs coming up during this quarter. And also if you Compare it with Q4, the wellness proportion has reduced a bit. So all these factors have resulted in higher gross margin for the quarter.
Gaurav
So we’ve always seen the radiology business growing faster than the pathology business. So the gross margin trajectory on an annual basis should keep on improving, right? Generally, directionally, since the radiology is growing faster and the share will keep on growing.
Sunil Reddy
No, no, not necessarily, Gaurav. Because at our scale, the proportion of radiology and pathology will not change significantly on a. Maybe on a quarterly basis you might see a 1% or 2% change because, you know, we’ve added some hubs, you know, and next quarter we may add more spokes so that 1% to 2% will change. But beyond that you will not see a big change. So you’re not going to see a big change in the mix between radiology and pathology.
Gaurav
Understood. A second question that I have. So Q2 is generally the best for a pathology business. And you know, one month has passed into Q2. Any indication you can give us, how is the acute season shaping out this quarter?
Sivaramaraju Vegesna
We have to still wait, Gaurav, because to be very frank, the season. The season, the general Q2 season where you see a lot of, you know, fever related testing, all that just started picking up. So initially we thought this time it was early monsoon. But then actually, you know, the monsoons are slightly delayed in the geographies that we are operating in at least.
Gaurav
Okay, sir, I’ll join back to Q. Thank you so much.
Sivaramaraju Vegesna
So don’t take that as a negative. Don’t take that as a positive. Yeah. Comment on anything. Right?
Gaurav
Sure, sir. Sure. Thank you so much.
operator
Thank you. Participants are requested to press star and one to ask a question. The next question Is from the line of Siddhan from Tusk Investment. Please go ahead.
Siddhant
Hello. Yeah. So is there any capacity constraint per center in terms of volume or revenue like beyond which it’s not possible to grow?
Sivaramaraju Vegesna
It actually depends from center to center, Siddhant. Because you know, sometimes you see capacity constraint on radiology, you know, on few of the equipment. But again it depends like we have spokes which are about from 1800 square feet to 3300 square feet, 35 square feet. Each center have a, you know, different capacity. So it’s definitely every center, I think beyond the point will have capacity constraint but then difficult to generalize and give you a number.
Sunil Reddy
So right now largely Siddharth, we don’t have that in our network to some extent. In Pune we did have that, we acquired ph. We did have some capacity constraints. But as you know, we are adding new centers in Pune just to address that. So beyond that there are no capacity constraints currently.
Siddhant
But it will be very difficult to actually put like quantify it in terms of volume or revenue.
Sivaramaraju Vegesna
Like we told earlier. So within the spokes we have a spoke generating 6 crore revenue a year. So ideal spoke will generate 2, 2 and a half crore. But we do have spokes which are generating about six, six and a half crore per year as well. So it is slightly difficult to quantify that number.
Siddhant
That. Right. Okay. Thank you so much.
operator
Thank you. The next question is from the line of Amit from JM Financial Institution. Please go ahead.
Amey Chalke
Yeah, thank you so much. So I have one question on management bandwidth. Considering we are now moving aggressively outside AP Telangana, like in three regions, East India, Bangalore, Karnataka as well as Maharashtra. So how are we looking to expand our team and what steps we have taken on?
Sivaramaraju Vegesna
In fact, over the last four quarters we have added a lot of lateral talent which we also have given the disclosures in the previous quarters. In fact in Pune recently we added sales and operations and also we have strengthened the sales team by taking people from the relevant industry. So time to time I think these ITC geographies, both Pune, Kolkata and Bangalore, we have the team which is already in place and time frame. We are adding the mid to senior level management rather than required.
Amey Chalke
So are we going to have like regional heads or. Currently it is being operating out of Hyderabad.
Sivaramaraju Vegesna
So we have regional heads reporting into Hyderabad corporate, you know, the policies, everything, you know, the way we operate, everything is similar across geographies. But all the three geographies, Pune, Kolkata and you know, Bangalore, we have regional heads.
Amey Chalke
Sure. And the second question I have is on the inorganic expansion. I understand we are organically expanding very well, but we also have a good amount of cash. So what’s our plan over there? Are we going to look to expand in the core regions or. It will be largely outside the core region.
Sunil Reddy
So, Amini, if GM can give us a good acquisition opportunity, we are very happy to acquire.
Sivaramaraju Vegesna
So we are on the look for acquisitions, you know, as and when we get the right opportunity. That’s a continuous process.
Amey Chalke
Right.
Sivaramaraju Vegesna
So as long as that falls, you know, when we have all the boxes tick in terms of, you know, valuation, quality of the Fed, you know, other integration aspects, we’ll be happy to do that.
Amey Chalke
So. So thank you so much. I will join back. Thank you.
operator
Thank you. As there are no further question, I now hand over the conference over to management for closing comments.
Dhiren Gala
I would like to thank everyone for attending this call. Should you need any further clarification or any other information about the company, please feel free to reach out to us. Thank you so much.
Sivaramaraju Vegesna
Thank you.
Sunil Reddy
Thank you.
operator
Thank you. On behalf of JM Financial Institutional securities limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.