Business Standard

Near-term outlook prescription for diagnostic firms looks fragile

Competitive pressures, high valuations limit upsides for listed lab chains

pharma
Premium

The other key reasons for the downgrade are near-term margin pressures owing to normalisation of the Covid-led business, heightened competitive intensity in the market, and integration of lower-margin Suburban portfolio

Ram Prasad Sahu Mumbai
The January-March quarter (fourth quarter, or Q4) results of largest listed players in the diagnostic space do not portray a healthy picture. Competitive pressures, weak organic growth, integration challenges, and higher costs injured the operational performance of companies in the sector.

In light of the above, brokerages have slashed their earnings estimates for the three large listed players – Dr Lal PathLabs, Metropolis Healthcare, and Thyrocare Technologies – by 15-20 per cent. 

If Q4 results of 2021-22 are any indication, growth is going to be a near-term challenge for the sector.

The country’s largest listed player - Dr Lal PathLabs - reported a

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: May 29 2022 | 10:30 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com