Firm banking on acquisitions, and rationalisation of prices
Dr Lal PathLabs' board has approved the signing a binding term sheet for the acquisition
Operating margin declined to 28.5 per cent as against 29 per cent a year ago
The stock surged 16% to Rs 931, also its 52-week high on the BSE in intra-day trade after the company reported a better than expected 27% YoY growth in net profit at Rs 402 million in Q4FY18.
Better margins and focus on cost rationalisation to drive earnings
The stock of Dr Lal Pathlabs fell 6.4 per cent after brokerages cut their margins and earnings estimates sharply for the company due to rising pressures on pricing and volumes. Morgan Stanley, which has cut its target price to Rs 700 from Rs 888, believes that the company will face substantial pressure on both pricing and volumes given competitive intensity. Some of the pressures were visible in the March quarter performance, which saw the company's operating profit margins decline 298 basis points year-on-year to 23.6 per cent.Competition in the business-to-business (B2B) segment, promotional and employee expenses as well as costs associated with setting up new labs, added to the pressure. The B2B segment, which includes revenues from nursing homes and hospitals among others, accounts for 40 per cent of the company's revenues. Going ahead, analysts at Nomura believe that the company's operating profit margins could be under pressure and could contract 100 to 200 basis points given ...
The stock slipped 6.5% to Rs 780 after two per cent of total equity changed hands on NSE and BSE.
Dr Lal PathLabs is focusing on 'inorganic growth'
Dr Lal Pathlabs is Business Standard Star SME of the Year 2016
December quarter could come under pressure, but growth set to improve from March quarter
The stock hit a new high of Rs 1,114, rallied 21% in past two trading sessions from Rs 922 on the BSE.
In its annual report, the company raised concerns of pricing control at the time of epidemics
The company had posted a revenue of Rs 791.3 crore for the fiscal year 2015-16
Total income from operations up 15% Rs 198 cr for the quarter; full-year profit up 38% at Rs 132 cr
The stock has soared 11% to Rs 947, its highest level since listing on the bourses in December last year