I noticed in their current balance sheet that Virinchi has reserves of 180.1 cr. and borrowings of 158.5 cr. (source: Screener). Despite healthy growth in reserves over last many years, company is financing expansion through debt. They either are getting debt cheap or they are using leverage to improve ROE. Also, the tax liability would reduce as they continue to employ debt instead of reserves. Debt to equity ratio is reasonable and they have an interest coverage of 2.65 which sounds healthy. Hence, as far as they are confident of future growth and they keep repeating/maintaining current quarter performance, even a little additional debt from current level should not have any adverse impact. On the other hand, I am more curious on how the company wishes to use its burgeoning reserves - distributing some of it as dividend would be a good way to boost investor confidence I feel.
Disc - Invested