Vijaya Diagnostic's strong Q4 results lift shares to record high, brokerages bullish

Vijaya Diagnostics shares have delivered over 106 percent returns in the past one year.

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26 Aug, 2025 12:21

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Shares of Vijaya Diagnostic Centre surged over 7 percent in early trade and hit a new peak of Rs 789.20 as investors gave a thumb up to the company's steady performance in the March quarter of FY24. Moreover, the company's ability to withhold its operating margin levels despite expanding to newer markets received a thumbs up from brokerages.

Impressed with the company's robust expansion plans, strong execution and solid margin profile, brokerages anticipate an upward growth trajectory for the diagnostics chain.

At 10.22 am, shares of Vijaya Diagnostic were trading at Rs 762.40 apiece on the NSE.

The diagnostic chain's revenue rose 28 percent year on year to Rs 155 crore in the January-March period. The topline performance was largely aided by growth in volumes across geographies, along with certain specialised tests witnessing price hikes. The company also witnessed good traction in new markets of West Bengal and Pune.

Consequently, its net profit for the quarter grew 22 percent to Rs 33 crore. Vijaya Diagnostic reported an EBITDA margin of 40.7 percent in Q4, a 10 basis points expansion from 40.6 percent recorded in the year ago period.

The company's recent acquisition of PH Diagnostics, which is one of the largest diagnostics chains based in Pune, has also contributed positively to its financials, helping it hold on to its EBITDA margin levels.

Aside from the robust quarterly performance, brokerages also forecast an equally impressive growth outlook for the diagnostics chain. The company also unveiled its two-year expansion plan, which revolves around setting up of 10-11 hubs and a few spokes.

The management has zeroed in on 6 locations for this expansion, with Pune still standing out as Vijaya's key focus area, slated to get five new hubs. The company has also envisaged a capital expenditure of Rs 200-220 crore to fund this expansion.

Nuvama Institutional Equities feels that Vijaya’s aggressive expansion plans, particularly in Pune and Kolkata, should accelerate its growth journey and establish its potential away from its core market.

"It is poised to gain in these markets given its knack for identifying high growth locations, timely breakeven in new centres and radiology offering with latest technologies," Nuvama noted in a report.

Confident over Vijaya Diagnostic's ability to deliver strong growth, JM Financial foresees the company reporting mid-to-high teens organic growth whilst sustaining over 40 percent EBITDA margins in the near term.

Meanwhile, Nuvama also finds Vijaya Diagnostic's current stock valuations attractive and sees further scope for re-rating, given its improving growth visibility, expansion in fast-growing geographies, management’s execution track record and receding pricing pressures. The brokerage raised its price target on the stock by more than 20 percent to Rs 910 while retaining its 'buy tag.

JM Financial also raised its valuation multiple for Vijaya Diagnostic to 43 times its trailing 12-month earnings to assign a price target of Rs 830 for the stock. This upgrade was based on the company's strong underlying earnings momentum. JM Financial has a 'buy' rating on the stock.