Tag: Dr Lal Path Labs

Lal PathLabs Q4 Results: Net profit rises 49%, announces dividend of ₹6 per share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Dr Lal PathLabs revealed its financial performance for the fourth quarter of the previous fiscal year. The diagnostic chain company posted 49% rise in net profit for the fourth quarter, reaching ₹84.5 crore compared to ₹56.7 crore in the same period last year.

The company also announced a dividend of ₹6 per equity share. “Recommendation of final dividend of INR 6/- per equity share (@ 60% on a face value of INR 10/- each) for the financial year ended March 31, 2024 subject to approval of the Shareholders at ensuing Annual General Meeting (“AGM”) of the Company. The record date for the purpose of payment of final dividend shall be June 10, 2024.”

The company’s revenue witnessed an 11% rise, reaching ₹545.5 crore as compared to ₹491 crore in the fourth quarter of FY23. Dr Lal PathLabs also reported improvement in its earnings before interest, taxes, depreciation, and amortisation (EBITDA), which rose by 25.2% to ₹144.7 crore, up from ₹115.6 crore in the corresponding quarter of the previous year.

The margin performance also exhibited a positive trend, with the margin standing at 26.5% compared to 23.5% in the same period last year.

Also Read: Indian Overseas Bank targets 3.25%-3.30% net interest margin in FY25

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Expect financial year 2023-24 margins at 25 percent, High end testing aiding revenue per patient: Dr. Lal PathLabs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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“Expect financial year 2023-24 margins at 25 percent” Om Manchanda, Dr. Lal PathLabs said in an interaction with CNBC-TV18 on Friday. The diagnostics and related healthcare tests provider declared its fourth quarter results on Thursday and the stock is trading 1 percent higher on the exchanges on Friday at 10:30 am.

The company’s consolidated net profit declined 7.5 percent to Rs 56.7 crore in the fourth quarter ended March 31, 2022 — much lower than CNBC-TV18‘s poll of Rs 65.7 crore. This is the sixth consecutive fall in quarterly profit as a continued slide in income from COVID-related testing outpaced growth in its core business. Revenue from operations, however, rose to Rs 491 crore in the fourth quarter as against Rs 485.5 crore in the year-ago period, Dr Lal Pathlabs said in a statement.

Dr. Lal PathLabs is the first among its peers to report results and will set the tone for an intensely competitive industry that made large gains during the pandemic.

Dr. Lal PathLabs management while interacting with CNBC-TV18 on Friday added that the competitive intensity has reduced and witnessed a flat pattern between third and fourth quarters of 2022-23 for non-COVID revenue.

Manchanda further says that revenue per patient has been aided  by bundled packages and mix changes. “The high end testing has aided the revenue per patient ratio for the company”. It is also confident of sustaining growth seen in the past, while volume growth is expected at 8 to 9 percent.

The company further adds that screening packages are gaining ground. It recently launched a reference lab In Mumbai. The diagnostics and related healthcare tests provider expects to clock 25 percent margins in FY compared with 23.5 clocked in fourth quarter of financial year 2022-23.

In the recently hosted conference call for analysts, the company said its gross margins expanded 190bps year on year due to a change in test mix and price hikes taken in February 2023. Furthermore, specialized tests have scaled up significantly and are expanding to newer geographies including tier 2-3 towns. The industry growth is normalizing to 10 to 11 percent and the quality of assets available for inorganic growth has declined.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dr Lal Pathlabs Q4 Results: Profit dips to Rs 56.7 cr; co announces dividend of Rs 6 per share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Dr Lal Pathlabs on Thursday said its consolidated net profit declined 7.5 percent to Rs 56.7 crore in the fourth quarter ended March 31, 2022 — much lower than CNBC-TV18‘s poll of Rs 65.7 crore. The company had reported a net profit of Rs 61 crore for January-March period a year ago.

Revenue from operations, however, rose to Rs 491 crore in the fourth quarter as against Rs 485.5 crore in the year-ago period, Dr Lal Pathlabs said in a statement.

Operating margin, calculated as Ebitda (Earnings Before Interest, Taxes, Depreciation, and Amortization) was down 4.5 percent at Rs 115.6 crore, as against Rs 121.1 crore in the year-ago period. Ebitda margin stood at 23.5 percent compared to 24.9 percent in the corresponding quarter of last year.

The company said it board has approved a final dividend of Rs 6 per share on face value of Rs 10 each for the year ended March 31, 2023.

Commenting on the performance, Dr Om Manchanda, Managing Director said: “Our belief is that the brands that have made comprehensive investments in network creation, infrastructure scale up, and patient services will be the frontrunners of growth. Within healthcare, patients are increasingly aligning themselves with trustworthy brands, and therefore, it is crucial that we improve our on-theground presence and experience. In order to enhance our performance trajectory, we will continue to extend our network into tier 2 and 3 regions of India.”

“Furthermore, our expansion in the West, mainly Mumbai and other large cities, will emanate from increasing the density of our collection centers. To achieve this, we are deploying hub labs as a means to amplify our capabilities. These labs will provide support to a cluster of collection centers in the surrounding areas, resulting in improved cost efficiency and faster turnaround times,” Manchanda added.

Shares of Dr Lal PathLabs Ltd were trading 1.18 percent lower at Rs 1,926.80 apiece in Thursday’s trade. The stock rose 3 percent in the last one month, while on a year-to-date basis it fell 13 percent.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Kotak Institutional Equities cautious on diagnostic stocks, prefers Hospitals instead

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Brokerage firm Kotak Institutional Equities has maintained its cautious stance on shares of diagnostics and testing companies like Dr Lal PathLabs Ltd. and Metropolis Healthcare Ltd., despite the recent price hikes undertaken by such firms.

Kotak said that its latest analysis hinted at the increasing sanity in the diagnostics pricing in the country. It noted that online platform Tata 1mg has increased prices by 30 percent across cities in the fourth quarter ended March 2023.

Dr. Lal Pathlabs and Metropolis have also marginally hiked prices in select routine and semi-specialized tests in some cities in the March quarter.

Though these developments are positive, Kotak said that they are well-captured in the estimates for Dr Lal Pathlabs and Metropolis. Notably, Kotak estimates a compounded annual growth rate (CAGR) of 13 to 17 percent in sales and operating profit of these companies over financial year 2023-2025.

Also Read: Though COVID cases are on the rise, Metropolis Health doesn’t see RT-PCRs increasing

As a result, Kotak has retained its cautious stance on Dr Lal Pathlabs and Metropolis due to the impending risk on the companies’ long-term sales growth and margin profile amid elevated valuations.

Kotak has a ‘Sell’ rating on Dr Lal PathLabs with a price target of Rs 1,570, indicating a downside of over 15 percent from Monday’s closing levels. It also has a reduce rating on Metropolis Healthcare with a price target of Rs 1,285, which almost similar to Monday’s close of Rs 1,250.

The brokerage also mentioned that it preferred the hospital space over the diagnostics stocks, citing Apollo Hospitals Enterprise Ltd., Krishna Institute of Medical Sciences Ltd (KIMS) and Rainbow Children’s Medicare Ltd as its top picks.

It gave a ‘Buy’ call on Apollo Hospitals with a price target of Rs 5,520 per share, implying an upside of over 30 percent from Monday’s close. It also expects potential upside of 22 percent and 14 percent for KIMS and Rainbow Children’s, with a buy and add rating respectively.

Also Read: Metropolis Healthcare may see some impact on margin due to newly set up labs, says Ameera Shah

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian Paints nears 52-week high; big deal in Axis Bank: Stocks that kept dealers busy mid-week

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of private lender Axis Bank ended lower for the sixth straight day in mid-week trading. The stock has lost over 12 percent during this period.

0.6 percent or 1.6 crore shares of the bank exchanged hands in two large trades on Wednesday. The stock fell as much as 4.5 percent post the deals, before ending 3.2 percent lower.

Sources within the dealing rooms tell CNBC TV-18 that a leading foreign institution was broker to this deal and the buyers and sellers of this deal are both likely to be Foreign Institutional Investors.

Also Read: Axis Bank to acquire 9.94% stake in Go Digit Life Insurance

Support Becomes Resistance

Just like Axis Bank, Indian equities also fell for the sixth straight day, ending at a two-month low.

“Having declined down to the support, there is a possibility of a minor pullback rally in the market from near 16800-16750 levels in the next 1-2 sessions. Immediate resistance is placed at 17000 levels,” Nagaraj Shetti of HDFC Securities wrote in a note.

Financials continue to see selling pressure with the Nifty Bank shedding 10 percent from its record high that it hit just two weeks ago.

Dealers indicate that flows are mixed at the FII desk with defensives like Pharma, IT, and FMCG being well bid. After a close below 17,000, the dealers now see Nifty to find support at levels of 16,640 on the downside.

Besides Axis Bank, here are some other stocks that have been part of the dealing room chatter today:

Dr Lal Pathlabs: The diagnostic player has had a uniform run this month. The stock ended higher for the seventh straight day on Wednesday, after previously declining for a similar time period. Dealers are anticipating a large block deal in the stock in which a large private equity investor is likely to be the seller. Based on the company’s June quarter shareholding patter, Foreign Investors held 22.4 percent stake in the company. Dr. Lal was in the news recently after Credit Suisse initiated coverage with an Underperform rating with a potential downside of 45 percent.

Asian Paints: The paints company was the top gainer on the Nifty 50 on Wednesday, ending 3 percent higher. The stock also gained for the third straight day and is trading near its 52-week high. Dealers suggest that the stock is surging on account of strong buy flows from the FII desks.

Also Read: Competition Commission says Asian Paints didn’t misuse its dominant position in market

Indiabulls Real Estate: Shares of the real estate player ended lower for the fourth straight day after giving up gains during the final minutes of trading. Dealing rooms indicate that some buying flows are returning from the HNI desks and that all eyes are now on the next NCLT hearing on October 7, which if cleared, would complete the merger between the company and Embassy will be completed.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Back to normalcy in non-COVID testing business: Dr Lal Pathlabs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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“We are back to our normal business in non-COVID tests,” Ved Goel, CFO, Dr Lal PathLabs said in an interview with CNBC-TV18.

“People have started coming to labs. Still there is ambiguity but I would say that second half of the year will be better than the first half,” he added.

According to him, since things are changing almost day-to-day, it is a bit difficult to predict how the business will shape up going forward in second half of the year.

About 17 percent of the company’s total revenue came from COVID business during the September quarter.

“Realisation from COVID business is higher compared to non-COVID business. Pricing as well is coming down, hovering around Rs 1,500 on an average for COVID RT-PCR testing,” he said.

“We are very keen to maintain our margins,” Goel said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Roundup 2019: Healthcare stocks in neck-to-neck competition

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Niche sectors largely managed to see the day of light this year. The healthcare business was one such space.  The sector’s second-quarter earnings remained healthy and robust despite an overall economic slowdown.

The logical followup is which healthcare stock looks the most attractive going into 2020. Dr Lal PathLabs, Metropolis Healthcare or Thyrocare Technologies?

YTD returns

In the last one year, Dr Lal Pathlabs (DLP) has risen 50 percent while its competitor Metropolis Healthcare surged 46 percent since April 15 this year. Thyrocare Technologies was the worst performer of all, rising marginally by 3 percent.

Earnings picture

In terms of financial earnings over the recent years, DLP and Metropolis have a neck-to-neck fight. In the last five years, DLP’s gross sales surged 82 percent while Metropolis rose 67 percent. However, Thyrocare reported the highest gross sales rally of 120 percent in the last five years.

When it came to the highest net profit in the last five years, DLP reported a jump of 108 percent. While Metropolis and Thyrocare surged 84 percent and 91 percent respectively.

Financial ratios

While looking at the financial ratios, the key factors to look at are zero debt-to-equity and return-on-equity. On these parameters, DLP stood at a higher pedestal as it was sitting comfortably at zero net debt as compared to its other two competitors.

Eye on rating agency reports

Last month, CLSA published a research report on DLP, retaining the ‘buy’ rating on the stock with the target price increased to Rs 1,800 from Rs 1,330 earlier.

“The company’s Q2 results were ahead of estimates, with another quarter of strong volume growth. Overall, volume remains the point of focus, helping the company expand into the rest of India and reducing dependence on its home market of Delhi/National Capital Region (NCR), it said. The brokerage has raised FY20-22 EPS estimates by 8-12 percent to reflect recent tax cuts”, said the report.

ICICI Securities initiated ‘Add’ on Metropolis Healthcare with a target price at Rs 1,365 per share.

The brokerage firm believes that Metropolis generated 41 percent revenue from high-value specialized tests which has resulted in a strong increase in the realization by >7 percent against a flattish to decline in realization for the peers. Volume growth has also improved over the past few quarters aided by aggressive network expansion with B2C focus over the past three years.

In the case of Thyrocare Technologies, Edelweiss maintained ‘Hold’ on the stock with a target price at Rs 620 apiece because the company is still based on the B2B model while its competitors are focused on providing a branded value-added play along with preventive tests e.g., doctor access and report tracking.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Corporate tax cut: Here’s how pharmaceutical companies will benefit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance Minister Nirmala Sitharaman on Friday announced that the government proposed to cut corporate tax rates to 22 percent for domestic companies provided they will not avail exemptions or incentives and 15 percent for new domestic manufacturing enterprises as part of a raft of measures to boost economic growth.

The effective tax rate cut is going to benefit the pharmaceutical companies. Companies that have a 100 percent domestic focus or a majority domestic focus will benefit more. The case in point for this would be Dr Lal Path Labs. The diagnostic company pays a tax rate of around 35 percent. It is expected to probably reduce by 9 percent to around 26 percent.

ALSO READ: Government cuts corporate tax to 22%, ends MAT to revive economy

The other example would be a lot of the multinational companies (MNC) focused pharmaceutical companies which derive majority of their revenues from India. GlaxoSmithKline, which pays around 35 percent in terms of a tax rate is probably expected to see its tax rate reduced by around 10 percent. Similar case for the other such as Pfizer, Sanofi etc.

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In terms of the other companies however, it depends on the proportion in terms of the US business as well as the kind of R&D incentives etc. For example, Cipla, Aurobindo Pharma probably pay taxes anywhere between the range of around 22-27 percent. Within this entire gamut, Sun Pharmaceuticals is one of the lowest taxpayers at around 15 percent in terms of a tax rate. So the biggest beneficiaries from this particular tax cut would definitely be the domestic focused pharmaceutical healthcare companies but the other companies such as Cipla and the others would benefit as well.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow