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Result Synopsis

Vijaya management reiterated its capex plan involving addition of 9 hubs in rest of the fiscal spread across Pune, Kolkata and AP/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 200bps 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 TP of Rs800, based on 40x FY26 EPS.

Result Highlights

* Vijaya reported an inline quarter with revenue growth of 29% YoY which included exPH (acquired Pune based co) revenue growth of 19.5% YoY

* Ex-PH, volumes (patient footfalls) up 16.6% YoY while realization per patient up 5% YoY; total volumes up 22.5% YoY

* Margin at 39.2% came in line as no major incremental costs were loaded in Q1

* Company opened a hub in Ongole, AP and achieved break even in Kolkata within 3 quarters

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