Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Thyrocare Technologies - COVID tests and cost control aided margins - ICICI Securities

Posted On: 2020-08-03 08:44:17

Thyrocare Technologies' (Thyrocare) reported better than estimated performance in Q1FY21 supported by COVID-19 tests and tight cost control. Consolidated revenue declined 48.7% YoY to Rs563mn (I-Sec: Rs431mn). EBITDA margin dropped 2,660bps YoY and 1550bps QoQ to 15.0%. The company conducted 0.08mn COVID-19 tests which contributed ~42% to total sales in Q1FY21. Regular pathology business witnessed a volume decline of 64.6% in the number of samples due to lockdown which impacted preventive tests significantly. The company's model of low pricing/high volume strategy was severely affected and focus on preventive tests would take few quarters to revive. However, proportion of preventive and wellness tests to total diagnostics industry is expected to improve materially in long term. Maintain HOLD.

- Revenue impacted by nationwide lockdown: The company witnessed revenue decline of 48.7% due to volume decline and lower realisation. Volume decline in pathology (ex-COVID tests) stood at 64.6% in number of samples primarily on account of lockdown. Realisation per sample decreased 12.4% YoY. The company's strategy of low pricing/high volume was severely affected due to the nationwide lockdown which reduced working OPDs resulting in lower footfalls. However, COVID-19 tests helped in arresting some of the fall and contributed ~42% of sales. Imaging business (Nueclear) witnessed 80.3% drop in sales.

- Profitability impacted by lower revenue: Thyrocare reported EBITDA margin drop of 2,660ps YoY and 1,550bps QoQ to 15.0%, better than our estimate of negative EBITDA. The drop is primarily due to decline in revenue. Lower personnel costs and S,G&A expenses helped in reporting positive EBITDA margin. We believe S,G&A expenses would gradually increase as lockdown situation is easing but would be lower than previous year. We estimate EBITDA margin to reach back to previous levels of ~40% by FY22E.

- Outlook: We have raised our revenue and earnings estimates by 5-10% and 6-22% for FY21-FY22 to factor in revenue from COVID-19 tests and lower cost structure. Overall, we expect 10.5% revenue and 18.1% EPS CAGRs over FY20-FY22E. We have assumed growth recovery from H2FY21 in our estimates. Growth would be driven mainly by ~10% volume CAGR with stable realisation. Imaging business would continue to remain under pressure and we expect it to continue to negatively affect profitability.

- Valuations and risks: Given likely delay in recovery of wellness business and limited upside to our target price, we maintain HOLD rating with revised DCF-based target of Rs675/share, implying 26.9xFY22E earnings and 16.5x FY22E EBITDA. Key upside risks: faster recovery in preventive care business and incremental tie-ups with standalone labs for sample processing. Key downside risks: Competitive and regulatory hurdles.

Shares of Thyrocare Technologies Ltd was last trading in BSE at Rs.675 as compared to the previous close of Rs. 701.95. The total number of shares traded during the day was 26991 in over 1885 trades.

The stock hit an intraday high of Rs. 698.8 and intraday low of 641.5. The net turnover during the day was Rs. 18180373.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:


Mutual Fund Review - September, 2020 - ICICI Securities

UTI AMC announces IPO date - Angel Broking

Asian Paints - Mr. Amarjeet Maurya - AVP - Mid Caps, Angel Broking Ltd

Britannia Industries - Mr. Amarjeet Maurya - AVP - Mid Caps, Angel Broking Ltd

Hexaware Technologies (Not Rated): Hexaware accepts 475/share as final delisting price - ICICI Securities

CAMS IPO - Day 2 Subscription - Angel Boking

Chemcon Speciality Chemicals - IPO subscribed 12.62 times on second day - Angel Broking

General insurance - Fire, health remain growth drivers, rising Covid claims a concern - ICICI Securities

Supreme Industries - Perfect recipe for rerating; upgrade to BUY - ICICI Securities

Titan Company - Best positioned to gain from faster-than-expected recovery. Upgrade to ADD - ICICI Securities

Sector Update - Telecom - Sep 23, 2020 - ICICI Securities

Allcargo Logistics - Highlights of Blackstone deal - ICICI Securities

I-direct Instinct - Gokaldas Exports

Economy: RBI's trilemma: allows for INR strength - Kotak

HCL Technologies - Company Update - ICICI Securities

Chemcon Speciality Chemicals - IPO Review - ICICI Securities

Angel Broking - IPO Note - YES Securities

TCS - Announcement of its blockhchain based solutions on Microsoft Azure - Angel Broking

Amber Enterpirses acquire Sidwal - Angel Broking

Dixon Technologies - Buy - YES Securities

HCL Technologies acquisition of DWS Limited - Angel Broking

Allcargo Logistics CFO Resignation - Angel Broking

Upgrade to BUY on Gateway Distriparks - Strengthening the balance sheet - HDFC Securities

BUY on ITD Cementation - Execution pickup awaited - HDFC Securities

Allcargo Logistics - Trying to stich through an integrated offering - ICICI Securities

Polymer price tracker - Other polymer (ex-PVC) prices too firm up - ICICI Securities

Angel Broking - IPO Review - ICICI Securities

IPO Review - Computer Age Management Services - ICICI Securities

Company Update - EIH Ltd - ICICI Securities

Gladiator Stocks - Godrej Properties - ICICI Securities

Company Update - Dr Reddy's Laboratories - ICICI Securities

Gladiator Stocks: Pharma Thematic - ICICI Securities

Company Update - Housing & Urban Development - ICICI Securities

Covid Recovery Pulse - E-Way bill generation shows recovery signs with auto volumes flat - ICICI Securities

Quant Pick - UltraTech Cement - ICICI Securities

Lupin & Cipla - Positive News - Angel Broking

Sterling and Wilson Solar Ltd - 106.71 MW order win - Angel Broking

Dr. Reddy's Laboratories - Settles Revlimid litigation in US - ICICI Securities

Natco Pharma - Natco to launch first generic Revlimid - ICICI Securities

Solar Industries - Overseas and defence key to profitability - ICICI Securities

Federal Bank - Strengthening liability muscle; fees & charges revised upwards - ICICI Securities

HCL Technologies Mr. Jyoti Roy, DVP - Equity Strategist, Angel Broking Ltd


I-direct Instinct - Intellect Design Arena

P&G Health - Company Update - ICICI Securities

Relaxo Footwears - Mr. Amarjeet Maurya- AVP - Mid Caps, Angel Broking Ltd

Bata India - Mr. Amarjeet Maurya- AVP - Mid Caps, Angel Broking Ltd

Listing of Happiest Minds Technologies - Angel Broking

Dr. Reddy's Lab - Sep 17, 2020 - Angel Broking

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019