Global Healthcare Analyst

Tina Banerjee

Equity Capital Markets

Agilus Diagnostics Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/agilus-diagnostics-limited" target="_blank" data-smartkarma-citation="entities:40210:1" rel="noopener">Agilus Diagnostics Limited (SRLL IN)</a> is the largest diagnostics service provider in terms of number of laboratories and the second largest in terms of revenue from operations in India.</li>
<li>Agilus has built an extensive network spread across 25 states and five union territories in India. An asset light model enables growth of the service network in a cost-effective manner.</li>
<li>Indian diagnostics industry is expected to have a CAGR of 8–10% during FY23–28 to reach INR1,150B–1,250B in FY28, providing immense growth opportunities for large players like Agilus.</li>
</ul>



Agilus Diagnostics Limited (SRLL IN) is the largest diagnostics service provider in terms of number of laboratories and the second largest in terms of revenue from operations in India.
Agilus has built an extensive network spread across 25 states and five union territories in India. An asset light model enables growth of the service network in a cost-effective manner.
Indian diagnostics industry is expected to have a CAGR of 8–10% during FY23–28 to reach INR1,150B–1,250B in FY28, providing immense growth opportunities for large players like Agilus.


Agilus Diagnostics Pre-IPO: Large Scale of Operation and Favorable Sector Demand To Drive Growth

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 2% and 8% revenue and net profit decline in Q3FY23, respectively. Q3 results were dragged by an 80% YoY decline in COVID-19 revenue.</li>
<li>While non-COVID revenue increased 9% YoY to INR4.78 billion, it declined 7% QoQ. In fact, Q3FY23 non-COVID revenue was the lowest over the last three quarters.</li>
<li>Although diagnostics is a big and attractive market opportunity in India, the sector is overcrowded, leading to heated price competition and declining realization per test.</li>
</ul>



Dr Lal PathLabs Ltd (DLPL IN) reported 2% and 8% revenue and net profit decline in Q3FY23, respectively. Q3 results were dragged by an 80% YoY decline in COVID-19 revenue.
While non-COVID revenue increased 9% YoY to INR4.78 billion, it declined 7% QoQ. In fact, Q3FY23 non-COVID revenue was the lowest over the last three quarters.
Although diagnostics is a big and attractive market opportunity in India, the sector is overcrowded, leading to heated price competition and declining realization per test.


Dr Lal PathLabs (DLPL IN): Losing Path Amid Competition; Non-COVID Growth Underwhelming

<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

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

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

India

Thyrocare Technologies Ltd. is a leading diagnostic healthcare service provider in India, specializing in pathology and radiology services. The company operates one of the largest networks of diagnostic laboratories, focusing on clinical chemistry and preventive care through its Aarogyam brand. It also offers imaging services through its subsidiary, Nueclear Healthcare Limited, and has expanded its international presence to Tanzania. The company is headquartered in Navi Mumbai, Maharashtra, India, and was founded in 1996. 

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Thyrocare Technologies (THYROCAR IN)

Agilus Diagnostics Pre-IPO: Large Scale of Operation and Favorable Sector Demand To Drive Growth

Agilus Diagnostics is the largest diagnostics service provider in India. With pan-India network and comprehensive test menu, the company is poised...

Tina Banerjee

Dr Lal PathLabs (DLPL IN): Losing Path Amid Competition; Non-COVID Growth Underwhelming

India diagnostic sector is overcrowded, leading to price competition and declining realization per test. Currently, DLPL’s three-year patient...

Tina Banerjee

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Agilus Diagnostics Pre-IPO: Large Scale of Operation and Favorable Sector Demand To Drive Growth

​Agilus Diagnostics is the largest diagnostics service provider in India. With pan-India network and comprehensive test menu, the company is poised...

Tina Banerjee

Dr Lal PathLabs (DLPL IN): Losing Path Amid Competition; Non-COVID Growth Underwhelming

India diagnostic sector is overcrowded, leading to price competition and declining realization per test. Currently, DLPL’s three-year patient...

Tina Banerjee

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

Agilus Diagnostics is the largest diagnostics service provider in India. With pan-India network and comprehensive test menu, the company is poised...