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Subscribe to Vijaya Diagnostic Centre: KR Choksey

KR Choksey has come out with its report on Vijaya Diagnostic Centre. The research firm has recommended to ''Subscribe'' the ipo in its research report as on August 31, 2021.

August 31, 2021 / 03:45 PM IST
Several Indian startups have had made their stock market debuts in 2021, and many more are working towards it.

Several Indian startups have had made their stock market debuts in 2021, and many more are working towards it.

 
 
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KR Choksey IPO report on Vijaya Diagnostic Centre


Established in 1981, Vijaya Diagnostic Centre Limited (“VDC”) is the largest integrated diagnostic chain in Southern India by revenue, and also one of the fastest-growing diagnostic chain by revenue for FY20 (Source: CRISIL Report). It offers one-stop solution for pathology and radiology testing services to customers through its extensive operational network, comprising 81 diagnostic centres and 11 reference laboratories across 13 cities and towns in Telangana, AP, NCR and Kolkata. The company offers ~740 routine tests, 870 specialized pathology tests, 220 basic tests, and 320 advanced radiology tests. All of VDC’s centres offer integrated diagnostics services (pathology and radiology tests), with smaller spokes offering pathology tests plus basic radiology tests, and hub centres (ARCs) offering pathology tests plus basic and advanced radiology tests.



Valuation and Outlook


At the IPO’s upper price band of INR 531, VDC is being valued at 64.3x times earnings, offering potential upside relative to industry average of 89x. Considering strong brand recall, integrated model, high share of B2C, customer stickiness and sector leadership in southern India, we recommend a Subscribe with a long term perspective for VDC’s IPO.


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