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ICICI Securities Report
Vijaya Diagnostic Centre Ltd.’s Q1 FY23 performance was broadly in line with our estimates with revenue declining 14.9% YoY to Rs 1.0 billion (our estimate: Rs 1.0 billion) on a high Covid base. Ebitda margin contracted 810 bps YoY and 300 bps QoQ to 38.2% (our estimate: 41%) due to higher expenses linked with new centres.
Non-Covid revenues witnessed healthy YoY growth at 11.7% led by recovery in footfalls. Covid revenue slumped 90% YoY to Rs 32 million. We remain positive on the stock mainly due to Vijaya Diagnostic's business-to-consumer focus (95% of revenue in Q1 FY23), highest margin within the industry and continued focus on deeper expansion in its dominant regions.
These strengths synergise with supportive macro factors, including the likelihood of a faster shift of market to organised players. Further expansion in east, especially Kolkata, may drive mediumto long-term growth. However, intense competition may affect near-term performance.
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