Vijaya Diagnostic Centre: Southern India's Leading Health Partner | Stock Spotlight

 

Today, let's dive into Vijaya Diagnostic Centre, the largest diagnostic chain in Southern India. They offer a range of pathology and radiology testing services, making healthcare more accessible across the region.

Vijaya Diagnostic Centre operates through a Hubb and Spar model, ensuring that their services reach far and wide for the convenience of their customers. Now, let's talk about why this stock stands out.

Firstly, the recent acquisition of PH Diagnostic in December 2023 has added significant value. In the third quarter of fy 24, PH Diagnostic contributed about 1.2 CR to Vijaya's revenue, with plans to fully integrate by the end of fy 25. This move is expected to expand its presence in the Western Market, adding to the company's growth.

Secondly, their expansion into West Bengal is promising. With a hub center already launched in Kolkata and on track to break even in the next two quarters, Vijaya aims to further establish its footprint in West Bengal with more hub and spoke centers over the next few years.

Thirdly, let's talk numbers. In Q3 fy 24, Vijaya witnessed a remarkable 177% year-on-year revenue growth, with a significant portion attributed to increased volumes. The company's management is focused on boosting volumes further, especially considering the high demand for quality healthcare services in tier 2 and 3 regions.

Now, regarding the stock valuation, it's currently trading at an EV/EBIT of 27 times fy25 estimates, with a recent correction of 10%. Market analysis suggests that any weakness should be seen as an opportunity to accumulate this stock.

In conclusion, Vijaya Diagnostic Centre is not just a business but a vital part of Southern India's healthcare landscape. With strategic expansions, solid financial performance, and promising valuation, it's certainly a stock worth keeping an eye on for potential investors.