The January-March quarter (fourth quarter, or Q4) results of the largest listed players in the diagnostic space do not portray a healthy picture. Competitive pressures, weak organic growth, integration challenges, and higher costs injured the operational performance of companies in the sector.
In light of the above, brokerages have slashed their earnings estimates for the three large listed players Dr. Lal PathLabs, Metropolis Healthcare, and Thyrocare Technologies 15-20 per cent.
If Q4 results of 2021-22 are any indication, growth is going to be a near-term challenge for the sector.
The country's largest listed player Dr. Lal PathLabs - reported a sequential decline in revenue, excluding Coviddriven business. The base business (like-for-like) was up 4.4 per cent over the year ago quarter, compared to the two-year average annual growth of under 14 per cent.
Rahul Jeevani and Punit Pujara of IIFL Securities have downgraded the company's 2022-23 (FY23)/2023-24 (FY24) earnings per share (EPS) by 15 per cent since non-Covid organic revenue growth of 9 per cent (three-year average growth) has remained below pre-Covid growth rates of 14-15 per cent.
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