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Eye Care Giant Eyes Major Growth
24 Mar
Summary
- Dr Agarwal's Health Care is India's largest integrated eye care network.
- The company operates 272 facilities with a 25% market share in India.
- DAHL projects 32% revenue CAGR through network expansion.
Founded in Chennai in 1957, Dr Agarwal's Health Care (DAHL) has become India's largest integrated eye care network, now managed by its third-generation promoters. The company boasts 272 operational facilities, with 253 located across India and 19 in Africa, commanding an estimated 25% market share within the organized Indian eye care sector.
DAHL provides a comprehensive range of ophthalmic services. Surgeries constitute the largest revenue segment at approximately 67%, followed by optical and pharmaceutical products contributing around 21%, and diagnostics and consultations making up about 12%. The company has demonstrated robust growth, with a projected 32% revenue CAGR for the FY22-26E period.
This growth is fueled by an ambitious expansion strategy, including the addition of around 105 surgical centers since April 2021, which encompasses 50 acquired facilities. DAHL's leadership position and its hub-and-spoke model are expected to sustain industry-leading growth and improve return on capital employed (RoCE).
Considering a 5% equity dilution from issuing approximately 1.5 crore shares for minority holders in AEHL, DAHL anticipates a 42% EPS CAGR in FY26-28E. RoCE is projected to improve to 13% in FY28E from 10% in FY26E. The stock is valued at 25x the estimated FY28 pre-Ind AS EBITDA of ₹650 crore, resulting in a target price of ₹495.
