Axis Securities Flags Long-Term Growth Potential in Three Diagnostics and Healthcare Stocks

Domestic brokerage firm Axis Securities has issued buy recommendations on three companies in the diagnostics and specialized healthcare sector, pointing to strong multi-year growth opportunities. The brokerage highlights that the sector is entering a phase of steady growth supported by rising demand, scalable business models, and healthy cash generation.

Stock Targets

Axis Securities initiated coverage on Dr. Lal PathLabs with a target price of ₹2,315 per share, representing a 20 percent upside from its current market price of ₹1,934. The company relies on a pan-India network anchored by its New Delhi National Reference Laboratory, with its B2C franchise generating over 70 percent of revenue and supporting strong operating cash flows alongside EBITDA margins of 26 percent to 27 percent. The brokerage also gave a buy rating to Vijaya Diagnostic Centre with a target price of ₹1,730, offering a 20 percent upside from its current price of ₹1,437. Vijaya operates an integrated B2C model across more than 140 centers in South India, combining pathology and high-end radiology services like MRI and CT scans to achieve EBITDA margins of 39 percent to 40 percent. Finally, Nephrocare Health Services received a buy rating with a target price of ₹750, indicating a 21 percent upside from its current price of ₹616. Nephrocare operates 490 dialysis clinics across 269 cities in India, the Philippines, Uzbekistan, and Nepal, reporting an operating cash flow to EBITDA conversion of 81.2 percent and revenue growth at a 31.5 percent CAGR to ₹756 crore in fiscal year 2025.

Context

Axis Securities is a prominent domestic brokerage firm that provides equity research and investment recommendations to retail and institutional investors in India. Brokerage firms routinely issue sector reports and stock target prices to help investors navigate market trends and identify potential investment opportunities.