Team Saurabh Mukherjea latest stock pick is down 18% from IPO price. Do you own?

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Team Saurabh Mukherjea has recently added Vijaya Diagnostic Centre to its smallcap portfolio. This was disclosed in Marcellus Investment Manager’s latest newsletter on Little Champs model portfolio. Saurabh Mukherjea is the founder and chief investment officer of Marcellus Investment Manager. According to the newsletter, Marcellus Investment Manager in recent months added Vijaya Diagnostic Centre Limited and exited from Gujarat Ambuja Exports.

Shares of Vijaya Diagnostic Centre, which listed in September 2021, ended higher today at 433.30 today but year-to-date, the stock is down 26%. The stock is also down 18% from its IPO issue price of 531 per share. 

Dr. S. Surendranath Reddy founded Vijaya Diagnostic Centre in 1981 and over four decades the company has expanded to about 100 centres across Telangana and Andhra Pradesh.

Team Saurabh Mukherjea in the newsletter pointed out two key competitive advantages of Vijaya Diagnostic: Customer Convenience and Quality of the diagnosis.

“Integrated business model of radiology and pathology offers one-stop convenient solution for clients. Furthermore, the extensive network of hubs and spokes built by the company in and around Hyderabad gives Vijaya an upper hand in corporate tie-ups & wellness packages as well,” Marcellus Investment Manager said. 

“Vijaya has been a pioneer in bringing high end equipment technology into the country and as the business flourishes it allows the company to keep investing in cutting edge technology – driving further volumes. Basis the above two factors, Vijaya has been able to gain a market share of 20% in Hyderabad and foray into the other cities of Andhra Pradesh & Telangana in the recent years.”

In a recent presentation, Vijaya Diagnostic said that the company plans to deepen footprint in its core markets of Telangana and Andhra Pradesh by opening additional diagnostic centres through owned and franchisee model and expanding network through setting up spokes and hubs in existing catchment areas. 

It also wants to replicate its hub and spokes model in East India by establishing a hub in Kolkata and plan is to set up additional diagnostic centres around it. 

Vijaya Diagnostic has also shown a consistent financial performance during FY19 and FY22. Revenues has risen at at CAGR of 16% from FY19 to FY22 while PAT showed a CAGR o 34% during that period. In FY22, it had posted revenues of 462 crore and profit of 109 crore. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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