Potential in Bayer Diagnostics for long term

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Sharma says, “The potential of diagnostic services is growing in our country and Bayer Diagnostics caters to that and also dwells in diagnostic equipment and tools kits and systems. It is a market leader and its earnings are good but due to competition the margins are not high but going forward because of volume growth we will have more margins. Now also the valuations are reasonable and the stock is available at a PE of 10 for forward earning of 2005 and it is a good paymaster. The only problem being liquidity is less because their equity is only upto Rs 1.5 crore (Rs 15 million). Only those should invest who can buy and forget about it and expect returns after a long time so not for short term investment.”

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