Diagnostic players ride on changes in health insurance to beat slowdown

Metropolis, Dr Lal and Thyrocare are likely to see more gains led by expansion, increasing penetration, preventive testing and government's Ayushman Bharat scheme

Diagnostic players such as Metropolis and Dr Lal Pathlabs have been significant outperformers on the bourses. Their share prices are up over 30 per cent since May lows and are presently not far from their 52-week highs seen last month. While the broader indices have remained volatile during this period amid slowdown concerns, these pathology laboratory players have been able to attract investor attention. Given the robust business growth outlook, there seem to be more gains ahead. These companies would also gain from lower corporation tax rates, given their FY19 effective tax rate of 33-38 per cent. Analysts at Kotak