Please refer to important disclosures at the end of this report
1
Dr. Lal PathLabs (DLPL) has established consumer Healthcare brand in
diagnostic services. DLPL is on track to open two large reference labs in Kolkata
(Sep-17) and Lucknow (Dec-18). Once Kolkata lab comes in, it will open up
markets like
W
est Bengal, Orissa and chances are also likely that regions like
Bangladesh could grow as a business place. This should drive strong volume
growth and help penetrate under-serviced markets around these clusters using
the hub-and spoke model. DLPL is well placed among organised players to
capitalise on the strong prospects of the diagnostic industry. DLPL is attempting
to capture the 85% under-penetrated and unorganized diagnostic market with
huge network building, acquisitions of independent labs and increasing numbe
r
of franchisees. DLPL works with government agencies to make the tests
affordable for people who are far most to reach the branded labs. DLPL does not
find any serious competition among the large national level labs, the market is
very much untapped and unorganized the management says they could
cooperate to uplift the standards of business practices. For the coming years, the
company would be focusing on the strategy to build their brand in the locations
where they have a strong base. The Company is virtually debt free. The compan
y
has reported healthy profit growth of 33.6% CAGR and has also shown return on
equity (ROE) of 35.9% over the last 3 years. Hence Buy.
BUY
CMP `1,014
Stock Info
Sector
Beta 0.5
Bloomberg Code
Shareholding Pattern (%)
Promoters 58.6
MF / Banks / Indian Fls 5.5
FII / NRIs / OCBs 31.3
Indian Public / Others 4.6
Abs. (%) 3m 1yr 3yr
Sensex (8.6) (0.9) 22.5
Dr Lal PathLabs (13.2) 21.7 0.0
Reuters Code --
10
BSE Sensex 25,807
Nifty 7,908
Face Value (`)
Pharmaceutical
Market Cap (` cr) 8,394
52 Week High / Low 1279/697
Avg. Daily Volume 37,404
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Dr. Lal PathLabs
Others | Pharmaceutical
December 27, 2016
Dr. Lal PathLabs | Pharmaceutical
December 27, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Dr. Lal PathLabs
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
< -15
)