Suraksha Diagnostic Limited offers a one-stop integrated solution for pathology and radiology testing, and medical consultation services to the customers through the extensive operational network, consisting of the flagship central reference laboratory, 8 satellite laboratories (co-located with the diagnostic centers) and 215 customer touch points which include 49 diagnostic centres, and 166 sample collection centres (primarily franchised), as of June 30, 2024 across the states of West Bengal, Bihar, Assam, and Meghalaya. As of June 30, 2024, 44 of the diagnostic centres also housed 126 polyclinic chambers hosting 750+ specialized doctors for patient convenience. During the three months period ended 2024, they conducted approximately 1.58 million tests serving approximately 0.28 million patients and derived 95.34% of the revenue from operations from the core geography, Kolkata and the rest of West Bengal. During the Fiscal 2024, they conducted approximately 5.98 million tests serving approximately 1.14 million patients and derived 95.48% of the revenue from operations from the core geography, Kolkata and the rest of West Bengal. The radiology equipment consists of 24 CT and 13 MRI machines. As of June 30, 2024, their operational network comprises a diagnostic center network of (i) 13 hub centres, which are equipped to conduct all pathology sample collections, basic and advanced radiology tests; and (ii) their 'spoke' diagnostic centres which include the 11 medium centers, 23 small centres and 2 centres operated under public-private partnership ('PPP') model, which are equipped to conduct all pathology sample collection and certain basic radiology tests, further supported by 166 sample collection centres (primarily franchised); and a laboratory network of (i) the flagship central reference laboratory; and (ii) 8 satellite laboratories which are co-located with certain hub centres. Company's market share in the diagnostics services market in Eastern India was 1.15% to 1.30% in Fiscal 2024. Company offered a comprehensive range of 2,300+ tests that cover a range of specialties and disciplines, as of June 30, 2024. The diagnostic test menu included (a) 788 routine pathology tests ranging from basic biochemistry and hematology to 664 specialized pathology tests such as advanced biochemistry, histopathology, and molecular pathology, and (b) 766 basic/intermediate radiology tests ranging from basic x-rays, ultrasonography ('USG'), and computerized tomography ('CT') scans to 119 advanced radiology tests such as magnetic resonance imaging ('MRI') scans and specialized CT scans, as of June 30, 2024. Company derives the majority of the revenues from the B2C segment (i.e., individual patients). The B2C segment contributed to 93.83% of the revenue from operations for the Fiscal 2024 and 93.48% of the revenue from operations for the three month period ended June 30, 2024. As per financial performance, Suraksha Diagnostic Limited has posted total income / net profits of Rs 225.77 Cr / Rs 20.82 Cr (FY22), Rs 193.69 Cr / Rs 6.07 Cr (FY23), Rs 222.26 Cr / Rs 23.13 Cr (FY24) and Rs 61.85 Cr / Rs 7.67 Cr (Q1 FY25). So as per previous financials data, company has shown zig-zag results. Company has an average EPS of Rs 3.27 and average RoNW of 11.05% for last three fiscals. Issue is priced at a P/BV of 12.57 as per NAV of Rs 35.09/- as on 30.06.24. If we attribute latest earnings of FY23, FY24 and annualised FY25 on equity post issue, then asking price is at a P/E of around 378.69, 99.31 and 74.89 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 96 IPOs in last three fiscals. As per financials, Suraksha Diagnostic Limited has shown zig-zag results, RoNW is 14.09% and P/E is 378.69, 99.31 and 74.89 respectively as per FY23, FY24 and annualised FY25 earnings. So, issue looks aggressively priced. Company provides one-stop integrated solution for pathology and radiology testing, and medical consultation services to the customers through the extensive operational network, which is a very competitive business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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