According to analysts, the future outlook for the diagnostics industry in India is favorable with rapid technological advancements in the healthcare industry
Shares of diagnostic and healthcare services' companies were in focus on Monday. The shares rallied by up to 8 per cent in the intra-day trade on the BSE on expectation of earnings improvement going forward.
Thyrocare Technologies, Dr. Lal PathLabs and Metropolis Healthcare were up between 5 per cent and 7 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.39 per cent at 36,736 points.
Individually, shares of Thyrocare Technologies rallied 7 per cent to Rs 566, after the company on Friday said that it has started testing for Covid antibodies from June 28. The company has done more than 25,000 tests in just 10 days period, it said.
The company further said it has completed of 100,000 Covid-19 RT PCR tests in 108 days at affordable cost and at minimum possible time in accordance with the relevant regulations, guidelines and instructions issued by Indian Council of Medical Research (ICMR) from time to time.
According to analysts, the future outlook for the diagnostics industry in India is favorable with rapid technological advancements in the healthcare industry and doctors increasingly relying on evidence-based treatment. Instances and situations like the Covid-19 outbreak, they say, further boost the importance of diagnostics as an integral part of healthcare and the awareness among people regarding preventive testing for lifestyle and chronic diseases. Therefore, sustainable growth in the industry is likely.
That apart, the stock of Dr Lal PathLabs
hit a record high of Rs 1,918, up 8 per cent in the intra-day trade today. It surpassed its previous high of Rs 1,846 touched on February 10, 2020. Dr. Lal PathLabs is a provider of diagnostic and related healthcare tests and services in India.
“We are positive on the long-term outlook considering the Dr Lal PathLabs
strong brand franchise with sustainable growth, expansion potential, healthy free cash flow to the firm (FCFF) generation and strong return ratios. Further, we expect RoCE to remain strong at around 25 per cent despite the recent expansion in the Eastern belt. Strong brand equity in organised diagnostics market, experienced management team and continuing financial growth across parameters would benefit from premium valuations in our view,” ICICI Securities said in Q4FY20 result review.
Shares of Metropolis Healthcare, on the other hand, were trading higher for the eighth straight day. It surged 7 per cent to Rs 1,579 today, ralling 17 per cent during the period. On June 24, Metropolis Healthcare’s promoter Duru Sushil Shah had divested 3.05 million shares or 6.03 per cent stake in the company for Rs 422.58 crore. The proceeds from this divestment are intended to be used for substantial repayment of the loan availed by Metz Advisory LLP, the company said.