Chandan Healthcare Ltd. (CHL), a North India-based diagnostic services provider, is set to launch its INR 107.36 crore initial public offering (IPO) on February 10, 2025. The IPO, priced in the range of INR 151-INR 159 per share, will close on February 12, 2025, with shares slated for listing on NSE SME Emerge.
A Strong Regional Player with Growth Momentum
With a network spanning Uttar Pradesh, Uttarakhand, and Jaipur, CHL operates 37 laboratories and over 300 collection centers, performing nearly 5.6 million tests in the first nine months of FY25. Its services cover both pathology and radiology, with eight NABL-accredited labs and three NABH-accredited diagnostic centers, ensuring high-quality standards.
The company's revenue mix is diverse: pathology services contributed 34.2%, radiology 18.8%, and product sales 47% in the nine months of FY25. A substantial 62.3% of its earnings came from the B2B segment, while government contracts (B2G) accounted for 26.2%, reflecting a shift towards institutional clients.
Financials Show Promising Growth
CHL has demonstrated steady financial improvement. It reported a revenue of INR 167.99 crore and a net profit of INR 17.42 crore for the first nine months of FY25, surpassing its full-year FY24 profit of INR 16.36 crore. Notably, PAT margins improved from 2.6% in FY23 to 10.4% in 9M-FY25, indicating better cost efficiency and operational scale.
The IPO valuation appears attractive, with a price-to-earnings (P/E) ratio of 16.74 based on annualized FY25 earnings, making it cheaper compared to industry peers like Vijaya Diagnostic (NSE:VIJA) (P/E 88.7), Dr. Lal Pathlabs (P/E 56.0), and Metropolis Healthcare (NSE:METP) (P/E 60.9).
IPO Utilization & Expansion Plans
CHL plans to utilize INR 32.82 crore of the IPO proceeds to establish a flagship diagnostic center in Lucknow, alongside new central labs in Ayodhya and Ashiyana, signaling aggressive expansion in Tier-II and Tier-III cities.
Should Investors Subscribe?
With robust revenue growth, improving margins, and an attractive valuation, CHL presents a compelling investment case. Its cluster-based diagnostic model and diversified revenue streams position it well for long-term growth. Investors looking for exposure to India's expanding diagnostics sector may find CHL's IPO a rewarding bet for the medium to long term.
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