Indium Diagnostics Valuation Update - September 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

• Strong growth in valuations of Listed Diagnostics Players from April, 2023 (tracked via Indium Diagnostics Index - IDX): ~58% growth in IDX in just the last 12 months vs. ~23% in BSE Sensex – see Charts 1 & 2
• Overall Revenue and EBITDA are on an uptrend: ~8% Revenue CAGR and ~10% EBITDA CAGR over 2 years?(highest Revenue and EBITDA growth in Krsnaa (~20% CAGR) & consistently highest EBITDA margins in Vijaya (~40%)) – see Charts 3 & 4
• The average EV/Revenue & EV/EBITDA multiples have grown significantly and are at 2-year highs (~10x EV/Revenue and ~34x EV/EBITDA). However, there is high volatility in valuations (~50-100%) 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)

• Overall Revenue and EBITDA are on an uptrend: ~8% Revenue CAGR and ~10% 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 ~10x and ~34x today, there is a wide variation and volatility in multiples across all players: ~50-100% deviation just in the last 8 quarters

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