Leveraging its dominance in the B2B diagnostic business in India, Thyrocare’s new management has charted a roadmap to boost strong 15–17% growth in its base business of pathology. It has reframed contracts with ~7,400 of its franchisee partners (61% of pathology sales), setup a dedicated team to boost growth in the partnership model and shall invest ~INR 1.3bn over FY23–25 in its radiology business to turn around operations. To further strengthen its dominance in wellness tests, it has launched two new programs under ‘Jaanch’ and ‘Her Choice’, targeting fast-growing chronic ailments and unmet women healthcare needs. We raise our FY25 estimates by 4%, envisaging better traction in pathology and a strong margin expansion of 330 bps over FY23-25E.
OutlookThe stock trades cheap at 17.8x FY25E EV/EBITDA which is a 29% discount to its peer group. We upgrade the stock to BUY (Add earlier); DCF-based TP revised to INR 740 (earlier INR 615).
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Thyrocare Technologies - 13 - 12 - 2023 - iscDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
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