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On Wednesday, ICICI Securities adjusted its price target for Vijaya Diagnostic Centre (VIJAYA:IN) shares, increasing it to INR815 from the previous INR700, while retaining a Hold rating on the stock. The revision follows Vijaya Diagnostic's first-quarter performance for the fiscal year 2025, which surpassed analyst expectations.
Vijaya Diagnostic's base business experienced a 19.6% growth, spurred by a 16.6% year-over-year increase in patient visits and a 19.8% rise in the number of tests conducted.
Although the company's EBITDA saw a 17% year-over-year growth, margins slightly decreased to approximately 38.9% due to the higher costs associated with opening new centers.
The company's financial consolidation with PH Diagnostics contributed to an overall growth of 29.1% year-over-year and a marginal improvement in margin by 30 basis points to 39.2% in the first quarter. PH Diagnostics' revenue and EBITDA margin remained consistent quarter-over-quarter at INR 114 million and 40%, respectively.
Vijaya Diagnostic's management has disclosed plans to invest INR 2 to 2.2 billion in growth capital expenditures over the next two years. This includes the addition of two new hubs in Pune, three in West Bengal, and four across Telangana and Andhra Pradesh.
Expectations are set for a threefold increase in PH Diagnostics' revenue to INR 1.3 billion over the next five years, with the base business projected to grow at a rate of 13-15%.
Despite the positive growth indicators, the analyst pointed out that Vijaya Diagnostic's stock is trading at a high valuation of 24 times its fiscal year 2026 estimated EV/EBITDA. The Hold rating is maintained, albeit with a raised target price, reflecting the company's recent financial performance and future growth prospects.
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