told Business Standard that the cost of testing is Rs 2,500, besides a collection charge of Rs 1,000 and around Rs 1,000 for the cost of protective equipment (total Rs 4,500). If samples come directly to its labs, Thyrocare will charge only Rs 2,500.
Nevertheless, the prospects remain firm for diagnostic labs led by rising preventive healthcare
awareness and increasing inclusion in health insurance, among other factors. The stocks have corrected significantly in the recent market crash. Though some more correction is not ruled out, healthcare
stocks are being looked at as defensive bets, say analysts.
Players like Metropolis and Dr Lal PathLabs have continued expanding through organic and inorganic routes. Metropolis had acquired four laboratories in Surat, consolidating its leadership in western India, while Dr Lal PathLabs had completed its acquisition of a majority stake in a referral pathology in Gujarat to expand its presence in the western region. Analysts at Anand Rathi Research say the next leg of growth for Dr Lal’s is expected to be driven by western and southern India, as the management focuses on growth via acquisitions.
The top pathological companies
are already seeing robust volume growth. While Metropolis recorded 17.5 per cent year-on-year jump in number of tests during the December quarter, its revenue per patient improved to Rs 923 from Rs 898 in the quarter. Dr Lal, too, had seen its volumes improve 11.5 per cent year-on-year while its per-patient realisation had grown marginally to Rs 688 from Rs 683 a year ago.
Thyrocare, which had earlier concentrated on market share gains, is now seeing margin expansion. Price hikes and a franchisee push in the wellness business helped it expand margins by 300 bps to 40 per cent (pre-Ind AS) during the December quarter. The management expects to maintain 40 per cent plus margins going ahead.
Overall, after correction, the above-mentioned stocks are also trading at reasonable valuations now.
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