"Reading back", i.e. repeating what ATC said to you, is only required for clearances and hold-short instructions, when it's critical that ATC knows you understood them. A simple "radar contact" message is neither.
Most other things, you just "acknowledge", which can be done by saying your callsign or clicking the mic twice. (ATC usually adds "roger", which is a holdover from Morse code operators using "R" as a shorthand for "received"; most pilots don't bother.) This is done so ATC knows you heard them, but for non-critical things that don't require a readback. If you don't acknowledge, ATC may keep repeating it until you do, which is annoying both to them and to everyone else on the frequency; acknowledge promptly so they can move on.
However, when they say "radar contact", they will usually include additional information such as the position of the contact, altitude, etc. You only need one acknowledgement for the entire message. Note that if the position or altitude they say is incorrect, you really need to tell them that, because it means they're looking at the wrong radar target--and that could get you or someone else killed. Acknowledging is an implicit confirmation that they're looking at the correct target.
If they give instructions or ask questions as part of the same message, then you would reply to those as you normally would; you don't need to separately acknowledge the "radar contact" or other informational parts because it's assumed you heard them if you're replying to other parts of the same message.