The Current Market Price (CMP) of Vijaya Diagnostic is Rs. 573. The brokerage firm, ICICI Direct has estimated a Target Price for the stock at Rs. 700. Hence the stock is expected to give a 22.16% return, within 1 year.
|Current Market Price (CMP)||Rs. 573|
|Target Price||Rs. 700|
|1 year returns||22.16%|
The company reported an Rs. 3,767 mn revenue and net income stood at Rs. 843 mn, in FY 21. “With higher radiology contribution and B2C focus, Vijaya commands best-in-industry EBITDA margin which we expect to continue and remain at ~41-42% in near to medium term. We expect revenues to grow at 15.3% CAGR with EBITDA/PAT CAGR of 13.0%/12.7% over FY21-FY24E. Despite the continuous expansion, the company is likely to generate free cash flow of ~Rs3bn over FY21-24E. RoIC would improve to 42.5% by FY24E from 35% in FY21,” ICICI stated.
Comments by ICICI Direct
Maintaining a buy rating, ICICI Direct said, “South Indian diagnostic industry is estimated to grow at 13-14% CAGR over FY21-FY23E, a bit higher than industry growth of 12-13% led by higher than average non-communicable diseases and higher population above 15 years of age. The company’s focus on deeper expansion in its dominant regions, along with supportive macro factors and expectation of a faster shift of market to organized players will help it to maintain its growth momentum.”
About the company
Vijaya Diagnostic is one of the largest integrated diagnostic chains in southern India and is primarily based in Andhra Pradesh and Telangana (~96% of revenue). Vijaya has a 12-17% market share in the diagnostic industry in India. Vijaya not only focuses on pathology services but also radiology services. In pathology, it offers 1,610 tests including 740 routines and 870 specialized tests. In radiology, its test menu has 220 basic and 320 advanced radiology tests.
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The above stock was picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
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