Vijaya Diagnostics Q2 Results Review - All Round Beat Builds Ground For Optimism: Yes Securities

Yes Securities Report

Base business growth in Vijaya Diagnostic Ltd. is running healthy coupled with robust addition from new hubs opened between FY21-23. We had been circumspect about base business expansion, but it does appear to be running at 8-10% YoY in our view and indeed Vijaya has surprised for two quarters in a row.

Company has not added any hubs between Jan-Nov-24 barring one opened in Ongole, AP as management focused on integration of PH. With ~4 hubs likely to be opened till Q1 FY26, we believe growth would continue to appear healthy in H2 FY26 and FY27. Accordingly, we have factored 19% YoY rise in footfalls in FY27.

Meanwhile, lack of hub addition for most of CY24 may lead to a period where contribution from new hubs might go down and existing centres could be the dominant driver of growth. We marginally tweak FY26 estimate and introduce FY27 forecast.

Roll over to FY27 EPS and rise target multiple to ~50 times, at a premium to Dr. Lal and Metropolis given the superior volume growth outlook.

Upgrade to Add with revised target price Rs 1,240 (earlier Rs 800). Slowdown in Hyderabad and related core market would be a key risk to our volume assumptions.

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