Vijaya Diagnostics Q1 Results Review - Core Growth Unlikely To Accelerate Further: Yes Securities

Yes Securities Report

Vijaya Diagnostics Ltd.'s management reiterated its capex plan involving addition of nine hubs in rest of the fiscal spread across Pune, Kolkata and Andhra Pradesh/Telangana.

Volume growth across core markets has sprung a surprise translating into robust high teens footfall rise in standalone Vijaya. Albeit company has refrained from raising mid-teens growth expectation excluding PH Diagnostic. Bulk of the hub addition would occur in H2 which would drive growth in the next year.

We raise footfall growth assumption by 200 basis points in FY25 while largely retaining FY26 volume growth of ~18%. However, increased volumes are partly offset by higher presumed operating expenses in lieu of capacity expansion leaving earnings estimates largely unchanged.

In view of the run up since previous update, we downgrade to Neutral with unchanged target multiple and target price of Rs 800, based on 40 times FY26 earnings per share.

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