Dr Lal PathLabs hits 52-week low after block deals

The stock slipped 6.5% to Rs 780 after two per cent of total equity changed hands on NSE and BSE.

Dr Lal PathLabs has slipped to its 52-week low of Rs 780, down 6.5% in intra-day trade, after two per cent of total equity has changed hands on the National Stock Exchange (NSE) and BSE through block deals.

At 11:20 am; around 1.72 million equity shares representing 2% of total equity of Dr Lal PathLabs have changed hands on NSE and BSE, the exchanges data shows.

The name of the buyers and sellers were not ascertained immediately.

Thus far in the calendar year 2017, the stock of healthcare services provider has underperformed the market by falling 27% as compared to 16% rise in the S&P BSE Sensex.

Dr. Lal PathLabs (DLPL) reported a weak March quarter and management indicated a muted industry outlook, stating that industry growth seems to be slowing. Management also stated that it believes it can grow at the industry rate, a departure from the earlier “better-than-industry” expectations.

Analysts at IIFL Institutional cut FY18/19 estimates by 12-14% to adjust for these concerns. However, remain upbeat on long-term prospects for the company due to upcoming addition of Kolkata and Lucknow reference labs.

“New additions in the form of Kolkata/Lucknow reference labs have the potential to double DLPL’s base in next four years. We believe this is because of Kolkata and Lucknow/Kanpur markets combined are equal in size visà- vis the National Capital Region. Although near-term challenges around pricing and industry growth remain, we believe that doubling of the addressable market will help DLPL ride through a few years of uncertainty,” the brokerage firm said in result update.

At 12:45 pm; the stock was down 6% to Rs 786 on BSE, as compared to 0.15% decline in the S&P BSE Sensex. A combined 2.89 million shares changed hands on the counter on BSE and NSE so far.