Indium Diagnostics Valuation Update - July 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

• There has been a strong growth in valuations of Listed Diagnostics Players?(tracked via Indium Diagnostics Index) in the last 12 months:?~30% growth in IDX in the last 12 months vs. ~22% in BSE Sensex – see Charts 1 & 2
• Overall Revenue and EBITDA?are on an uptrend: ~10% Revenue CAGR and ~14% EBITDA CAGR?over 2 years?(highest Revenue and EBITDA growth in Vijaya and Krsnaa (~25-30% CAGR)) – see Charts 3 & 4
• Current average EV/Revenue & EV/EBITDA multiples are at ~8x and ~29x respectively (basis TTM Revenue and EBITDA).?However, there is high volatility in valuations (~30-100%)?across individual Diagnostics Players over the last 8 quarters – see Chart 5?

Diagnostics Players' 5-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)

• Revenue and EBITDA?are on an uptrend:?~10% Revenue CAGR and ~14% EBITDA CAGR?over 2 years
• Most Diagnostics Players have seen a fall in Q3 (i.e. Oct-Dec period of every year) due to business seasonality

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

• While the average EV/Revenue and EV/EBITDA multiples are at ~8x and ~29x today, there is a wide variation and volatility in multiples across all players: ~30-100% deviation just in the last 8 quarters

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