After addition of Kolkata flagship hub, Vijaya is looking to add another one in Bengaluru at a cost of ~Rs 300 million which would house high-end radiology including PET CT and MRI. FY27 capex is likely around Rs 1.2 billion which would see addition of another four hubs and about Rs 400 million earmarked for ~25 Spokes, which would be necessary given the strong hub capacity being created in current year.
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Yes Securities Report
Vijaya Diagnostics Ltd. has been on a hub expansion spree beyond the core markets of Andhra Pradesh and Telangana over the last 12 months. Management commentary so far has been cautiously positive on hub performance in newer areas which gives confidence on scalability of the integrated model as well as acceptability of the brand.
Yes Securities keeps estimates largely intact and upgrade to Buy on recent weakness with unchanged 55x target price for a ~25% upside.
Lack of timely break even in new hubs remains a key risk to our thesis as that would entail pressure on growth and create doubt on receptiveness of hub expansion strategy in non-core markets.
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