Indium Diagnostics Valuation Update - December 2024

Welcome to Indium Capital’s Quarterly update on Diagnostics Valuations in India. The key highlights are summarized below.

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Indian Diagnostics Valuation Trends - Executive Summary

• Valuations of Listed Diagnostics Players continue to grow from the lows of April, 2023 (tracked via Indium Diagnostics Index - IDX): ~48% growth in IDX in the last 2 years vs. ~29% in BSE Sensex – see Charts 1 & 2
• Strong growth in combined Revenue and EBITDA of all Listed Diagnostics Players: ~20% Revenue CAGR and ~32% EBITDA CAGR over 2 years. However, there is a significant variation in EBITDA margins for most Diagnostics Players across the last 2 years? – see Charts 3 & 4
• The average EV/Revenue & EV/EBITDA multiples have grown in the current quarter (~10x EV/Revenue and ~34x EV/EBITDA). However, there is high volatility in valuations (~50-150%) across individual Diagnostics Players and over the last 8 quarters – see Chart 5

IDX stock-wise 2-year market cap performance (Chart 1)

IDX stock-wise 1-year market cap performance (Chart 2)

Combined Diagnostics Players' Financial Performance in the last 2 years (Chart 3 & 4)

• Strong growth in combined Revenue and EBITDA of all Listed Diagnostics Players: ~20% Revenue CAGR and ~32% EBITDA CAGR over 2 years
• Year-on-year Revenue and EBITDA CAGR for current Q2-FY25: ~15% and ~23% respectively

Diagnostics Players' Multiples Trend - Last 8 quarters (Chart 5)

• While the average EV/Revenue and EV/EBITDA multiples are at ~10x and ~34x today, there is a wide variation and volatility in multiples across all players: ~50-150% deviation just in the last 8 quarters

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