Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-lal-pathlabs-ltd" target="_blank" data-smartkarma-citation="entities:26927:1" rel="noopener">Dr Lal PathLabs Ltd (DLPL IN)</a> reported revenue growth of 7% y/y in Q2FY23, driven by 15% y/y growth in non-COVID business, which clocked highest ever quarterly revenue.  </li>
<li>Although business growth was mainly driven by a double-digit patient volume growth, average realization per patient also increased 3% y/y to INR746.</li>
<li>Amid rising competition, the company reported sequential improvement in bottom-line. Normalized EBITDA increased 20% compared to Q1FY23. Normalized EBITDA margin improved 310 basis points sequentially.</li>
</ul>



Dr Lal PathLabs Ltd (DLPL IN) reported revenue growth of 7% y/y in Q2FY23, driven by 15% y/y growth in non-COVID business, which clocked highest ever quarterly revenue.  
Although business growth was mainly driven by a double-digit patient volume growth, average realization per patient also increased 3% y/y to INR746.
Amid rising competition, the company reported sequential improvement in bottom-line. Normalized EBITDA increased 20% compared to Q1FY23. Normalized EBITDA margin improved 310 basis points sequentially.


Dr Lal PathLabs (DLPL IN): Q2FY23 Review- Volume Driven Sales Growth; Sequential Margin Improvement

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Metropolis Healthcare Limited / Event-Driven

<ul>
<li>Several press reports regarding potential takeover speculations related to Indian diagnostics company <a href="https://www.smartkarma.com/entities/metropolis-healthcare-limited" target="_blank" data-smartkarma-citation="entities:27829:1" rel="noopener">Metropolis Healthcare Limited (METROHL IN)</a> have emerged in the Indian press over the last few days.</li>
<li>Metropolis Healthcare Limited currently has a total market capitalization of US$1bn.</li>
<li>Below is a closer look at the details of the situation.</li>
</ul>


Several press reports regarding potential takeover speculations related to Indian diagnostics company Metropolis Healthcare Limited (METROHL IN) have emerged in the Indian press over the last few days.
Metropolis Healthcare Limited currently has a total market capitalization of US$1bn.
Below is a closer look at the details of the situation.


Metropolis Healthcare (METROHL IN): Adani & Apollo Eyeing Majority Stake? Could Outperform Dr Lal

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-lal-pathlabs-ltd" target="_blank" data-smartkarma-citation="entities:26927:1" rel="noopener">Dr Lal PathLabs Ltd (DLPL IN)</a> reported 35% y/y revenue growth in its non-COVID business in FY22. Non-COVID realization per patient is also back to pre-COVID levels.  </li>
<li>The company has acquired Suburban Diagnostics last year, which will further widen its geographical footprint, with western region contributing 24% of revenue from 10% earlier.</li>
<li>There is a lot of noise regarding competition in the industry. Thus far, DLPL has not seen much pricing pressure and underpenetrated Indian diagnostic segment can accommodate more players.</li>
</ul>



Dr Lal PathLabs Ltd (DLPL IN) reported 35% y/y revenue growth in its non-COVID business in FY22. Non-COVID realization per patient is also back to pre-COVID levels.  
The company has acquired Suburban Diagnostics last year, which will further widen its geographical footprint, with western region contributing 24% of revenue from 10% earlier.
There is a lot of noise regarding competition in the industry. Thus far, DLPL has not seen much pricing pressure and underpenetrated Indian diagnostic segment can accommodate more players.


Dr Lal PathLabs Ltd (DLPL IN): Base Business Recovering; Competition Is the Only Headwind

Asia Consumer Research, Investory

Devi Subhakesan

Asia Consumer Research

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

In this insight, we analyze the details of Pharmeasy's acquisition of Thyrocare, rationale and boost to valuations, its impact on Thyrocare shares, and present a quick overview of India's pharma retail landscape.<a href="https://www.smartkarma.com/entities/pharmeasy" target="_blank" data-smartkarma-citation="entities:33473:1" rel="noopener">Pharmeasy (1416151D IN)</a>, India's leading e-pharmacy backed by established Private Equity players including Bessemer Ventures, Prosus (formerly Naspers), Temasek holdings, TPG, etc has boosted its valuation and expanded its business scope at one stroke with the acquisition of <a href="https://www.smartkarma.com/entities/thyrocare-technologies-ltd" target="_blank" data-smartkarma-citation="entities:22694:1" rel="noopener">Thyrocare Technologies (THYROCAR IN)</a>, a leading listed diagnostic chain in India. Pharmeasy is reportedly targeting to list its shares in India as soon as 2022. With COVID-led accelerated growth in demand for e-pharmacies and diagnostic/healthcare services, the sector has been in the limelight over the past year. Post this acquisition, Pharmeasy will be the only integrated health care tech play with a pan-India omnichannel presence spanning across the outpatient medical services spectrum. In our earlier report <a href="https://www.smartkarma.com/insights/reliance-amazon-onboard-online-pharma-retail-in-india-sector-now-set-for-explosive-growth" target="_blank" data-smartkarma-citation="insights:42377" rel="noopener">Reliance, Amazon Onboard Online Pharma Retail in India; Sector Now Set for Explosive Growth</a> we discussed in detail India's rapidly growing online pharma retail sector triggered by COVID-led restrictions. The sector has witnessed rapid consolidation and it is widely expected that two of its leading players could list their shares within a year.

In this insight, we analyze the details of Pharmeasy's acquisition of Thyrocare, rationale and boost to valuations, its impact on Thyrocare shares, and present a quick overview of India's pharma retail landscape.Pharmeasy (1416151D IN), India's leading e-pharmacy backed by established Private Equity players including Bessemer Ventures, Prosus (formerly Naspers), Temasek holdings, TPG, etc has boosted its valuation and expanded its business scope at one stroke with the acquisition of Thyrocare Technologies (THYROCAR IN), a leading listed diagnostic chain in India. Pharmeasy is reportedly targeting to list its shares in India as soon as 2022. With COVID-led accelerated growth in demand for e-pharmacies and diagnostic/healthcare services, the sector has been in the limelight over the past year. Post this acquisition, Pharmeasy will be the only integrated health care tech play with a pan-India omnichannel presence spanning across the outpatient medical services spectrum. In our earlier report Reliance, Amazon Onboard Online Pharma Retail in India; Sector Now Set for Explosive Growth we discussed in detail India's rapidly growing online pharma retail sector triggered by COVID-led restrictions. The sector has witnessed rapid consolidation and it is widely expected that two of its leading players could list their shares within a year.

Pharmeasy Acquires Thyrocare: Pre-IPO Move Boosts Valuation & Expands Operations

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Metropolis Healthcare Limited / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/metropolis-health-services-limited" target="_blank" data-smartkarma-citation="entities:27829:1" rel="noopener">Metropolis Health Services Limited (METROHL IN)</a> is relatively a younger player in the Indian Diagnostics industry compared to competitors like <a href="https://www.smartkarma.com/entities/dr-lal-pathlabs-ltd" target="_blank" data-smartkarma-citation="entities:26927:1" rel="noopener">Dr Lal PathLabs Ltd (DLPL IN)</a> and <a href="https://www.smartkarma.com/entities/thyrocare-technologies-ltd" target="_blank" data-smartkarma-citation="entities:22694:1" rel="noopener">Thyrocare Technologies (THYROCAR IN)</a>, in terms of pan-India ambitions. However, despite its late entrance, Metropolis has scaled its business quite rapidly through strategic acquisitions and organic growth.
<h3>Insight Flow</h3>
<ul>
<li>Investment Thesis</li>
<li>Risks &amp; Mitigating Factors</li>
<li>Valuation</li>
<li>Conclusion</li>
</ul>

Metropolis Health Services Limited (METROHL IN) is relatively a younger player in the Indian Diagnostics industry compared to competitors like Dr Lal PathLabs Ltd (DLPL IN) and Thyrocare Technologies (THYROCAR IN), in terms of pan-India ambitions. However, despite its late entrance, Metropolis has scaled its business quite rapidly through strategic acquisitions and organic growth.
Insight Flow

Investment Thesis
Risks &amp; Mitigating Factors
Valuation
Conclusion


Metropolis Labs: A New Leader Is in the Making

India

Thyrocare Technologies Limited provides healthcare testing services. The Company offers fasting blood sugar, cancer, cardiovascular disorders, diabetes, and thyroid testing services. Thyrocare Technologies conducts its business worldwide.

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Thyrocare Technologies (THYROCAR IN)

Dr Lal PathLabs (DLPL IN): Q2FY23 Review- Volume Driven Sales Growth; Sequential Margin Improvement

DLPL reported highest ever quarterly revenue from non-COVID business. The company reported sequential improvement in bottom-line. Price competition...

Tina Banerjee

Metropolis Healthcare (METROHL IN): Adani & Apollo Eyeing Majority Stake? Could Outperform Dr Lal

Metropolis Healthcare has been widely discussed as a potential M&A target and multiple potential suitors seem to be interested. This could act as a...

Janaghan Jeyakumar, CFA

Dr Lal PathLabs Ltd (DLPL IN): Base Business Recovering; Competition Is the Only Headwind

DLPL is not expected to have COVID windfall this year. However, base business is back to growth trajectory. Underserved Indian diagnostic services...

Tina Banerjee

Pharmeasy Acquires Thyrocare: Pre-IPO Move Boosts Valuation & Expands Operations

Analysis of acquisition rationale, valuation upside for Pharmeasy, and share outlook for Thyrocare based on the open offer. Overview of India...

Devi Subhakesan

Metropolis Labs: A New Leader Is in the Making

Metropolis has got its strategy right by focusing on quality and brand. It is also showing healthy growth aggression. With time, we would not be...

Ankit Agrawal, CFA

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