IGI Logo

About the Company

Established in 1981, Vijaya Diagnostic Centre Ltd. (Vijaya) is the largest integrated diagnostic chain in southern India, by operating revenue, and also one of the fastest-growing diagnostic chains by revenue for FY20. It offers a one-stop solution for pathology and radiology testing services to customers through its extensive operational network, which consists of 81 diagnostic centres and 11 reference laboratories across 13 cities and towns in the states of Telangana, Andhra Pradesh, National Capital Region and Kolkata as on June 30, 2021. It offers a comprehensive range of approximately 740 routine and 870 specialized pathology tests and approximately 220 basic and 320 advanced radiology tests that cover a range of specialties and disciplines. It also offers a broad spectrum of health and wellness packages to its customers as per their requirements. Its diagnostic services are provided by a medical professional team consisting of 74 laboratory doctors, 19 physicians, 105 radiologists and 1,027 well-trained technical staff in its operational network. It derived 96.2% of its revenue from operations from core geographies (Hyderabad and the rest of Telangana and Andhra Pradesh).

Objects of the Issue

* To carry out the Offer for Sale of up to 35,688,064 equity shares by the selling shareholders

* To achieve the benefit of listing on stock exchanges

Valuation

The diagnostic industry has achieved a healthy CAGR of 13-14% from FY17-20, tracking the strong growth momentum of the overall healthcare delivery services. However, in FY21, the industry’s growth rate decelerated to approximately 4% to Rs. 710-730 billion, owing to the fallout of the COVID-19 pandemic. Going forward, the industry is expected to return to a healthy growth trajectory of 12 to 13% CAGR, reaching Rs. 920 to 980 billion. This would be driven by a rise in health awareness and disposable incomes, increase in demand for better healthcare facilities and increase in spending on preventive and wellness. Further, the diagnostics market in Telangana and Andhra Pradesh, the states in which Vijaya has a significant presence, is projected to grow to approximately Rs. 120 billion to Rs. 130 billion by FY23.

Vijaya stands to benefit from growing industry trends on the back of its strong presence in Southern India. Further, it is an integrated diagnostics provider that offers a one-stop solution to its customers at an affordable price. The company has built a trusted, high-quality and reliable brand of choice over the last four decades and enjoys high brand recall. Going forward, Vijaya intends to strengthen its presence in its core markets (Telangana & Andhra Pradesh). Further, it intends to leverage its existing presence by focusing on setting up spoke centres and increasing home collection in existing catchment areas. It also plans to grow its business through an inorganic route and also looks to expand to adjacent geographies. The financial performance has been healthy with Sales and PAT CAGR of 13.5% and 35.5% over FY19-21. On the valuation front, the company is valued at ~65x FY21 EPS. From a long term perspective, we have a positive view on the company.

Key Risks:

*  i) Competitive intensity is high for the industry,

* ii) High concentration of revenue from 2 states.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer http://ex.religareonline.com/disclaimer

SEBI Registration number is INZ000174330

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaime