Prabhudas Lilladher is bullish on Thyrocare Technologies has recommended buy rating on the stock with a target price of Rs 595 in its research report dated August 14, 2019.
Prabhudas Lilladher's research report on Thyrocare Technologies
Thyrocar's sales grew 13% YoY, EBITDA grew 11% Yoy and PAT increased by 16% YoY in Q1FY20. The growth in preventive care returned with lower realisation due to more focus on volume growth instead of price cuts key diagnostic tests. Overall, Thyrocar increased 10% price for its sick care business in B2B segment while price of few tests in preventive care marginally reduced in Q1FY20. Management guided that the benefits of price rationalization in Aarogyam 1.1, 1.2 and 1.3 will be visible in FY20E.
While diagnostic companies is expected to trade at premium valuation with features of consumers business, Thyrocar valuation has been corrected by 36% in 12 months. With attractive valuation vs. peers, we maintain our earnings estimate and BUY rating with TP at Rs595.
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