🧠 At a Glance

Vijaya Diagnostic Centre Ltd is South India’s largest integrated diagnostics chain with a stronghold in radiology, pathology, and nuclear medicine. Over the past 5 years, it’s grown revenue by 15% CAGR and profits by 20%, but rising competition and valuation at 67x earnings raise concerns. So, is this a healthy stock or a high-P/E hypochondriac?

🧬 1. The Blood Report: Business Overview

• Incorporated in 1981, but IPO-ed in Sept 2021, Vijaya is no startup — it’s an OG in South India’s diagnostics scene.
• Present in 13 cities with 81 diagnostic centers and 11 labs, mostly concentrated in Telangana, Andhra Pradesh & Karnataka.
• Services offered:
  • 🧪 Pathology (biochemistry, microbiology)
  • ☢️ Radiology (X-ray, CT, MRI, PET-CT)
  • 🩻 Nuclear medicine & health check packages

🧠 Fun fact: Vijaya was among the first in South India to offer PET-CT scans, which sounds cool until you see Thyrocare offering them at 30% cheaper.

📈 2. The Growth Chart: 5-Year Financial Recap

📊 Revenue & Profit (₹ in Cr)

• Revenue CAGR (FY21–25): 15%
• PAT CAGR (FY21–25): 20%
• Diagnostic Margin King: OPM consistently at 40%+. That’s higher than Dr. Lal, Metropolis, and most small-cap labs.

🩺 But hold up…

• FY23 was a down year (revenues flat, profits dropped 23%) — post-Covid normalization hit hard.
• FY24–25 recovery driven by hub-spoke expansion, especially in Andhra.

🧾 3. Competitive Bloodbath: Peer Comparison

⚠️ Verdict: Vijaya trades at the highest P/E despite similar (or lower) scale vs Dr. Lal & Thyrocare. Margin = king, but market cap = already princely.

🏥 4. Inside the Lab: What’s Working

✅ High-margin Radiology Mix: Vijaya has 30–40% of revenue from radiology, which has fewer price wars than blood tests.

✅ Zero Debt & Strong FCF: Cash from ops ₹224 Cr in FY25, and net D/E close to 0.

✅ Consistent ROCE > 20%: Not easy in diagnostics where price competition is brutal.

✅ Focused Geography: Southern India is rich, aging, and health-conscious = perfect market.

😷 5. Symptoms of Concern

❌ Valuation Fever: 67x P/E and 12x Book — more expensive than a private hospital bill without insurance.

❌ FIIs Losing Interest: Foreign holding fell from 28% (Jun 2022) to 19.4% (Mar 2025).

❌ Working Capital Spike: Shot up from -16 days to +64 days in FY25. Patients paying late or labs stocking too much?

❌ Expansion ≠ Profit Bump: Despite 6 new hubs in FY25, margins flat. Capex-heavy path may take time to reflect in PAT.

🧠 6. Management & Promoter Pulse

• Promoter Holding: 53.05% (down from 55.04% in Jun 2022)
• CEO: Dr. S. Surendranath Reddy (also the founder)
• Background: Family-led, with a history of organic growth. No aggressive PE-led rollups like Metropolis.
• ESOP Activity: 50,833 shares allotted in June 2025 — dilution not huge but worth watching.

💸 7. Valuation — Is This a Clean Report?

📌 Let’s calculate:

• FY25 EPS: ₹13.94
• CMP: ₹942
• P/E: ~67x

That’s too rich for a 15% revenue CAGR and 20% PAT growth. Even Dr. Lal, the pan-India peer, trades cheaper.

📉 EduInvesting Fair Value Range:

⚠️ FV Range: ₹490 – ₹767
At ₹942, it’s already pricing in perfection… and a little bit of god complex.

🧪 Final Diagnosis: Over-prescribed?

• Vijaya is a clean business with textbook ROCE, margins, and moat.
• But it’s caught a valuation virus — likely due to low float and high retail/FII demand post IPO.
• Growth is steady, but not explosive. And PE compression risk is real if even one quarter disappoints.

Verdict:

Great lab. Not-so-great lab test price (read: stock price). Unless earnings run faster than an MRI machine, this may remain range-bound.

🏷️ Tags: Vijaya Diagnostics, Diagnostic stocks, Healthcare, Dr Lal Pathlabs, Radiology, High PE stock, South India diagnostics, EduInvesting Recap

✍️ Written by Prashant | 📅 20 June 2025