No rerating yet for diagnostic players despite price hikes as margins fall

While discounts have come down, pricing gap still large between incumbents and new players

Brokerages have cut their estimates of listed diagnostics players for the financial year 2023-24 (FY24) after mixed December quarter results and muted near-term outlook.  

Their volumes and realisations will be under pressure due to weakness in Covid-adjusted performance and higher competitive pressures, the brokerages believe.

In a post-Q3 results note on Dr Lal Pathlabs, Bhavesh Gandhi of YES Securities pointed out that there has been a lack of volume revival in recent quarters, with an increasing likelihood that FY24 too would be a work-in-progress year for the company’s initiatives to bear fruit.

YES Securities has reduced volume growth to mid-single digits next fiscal