Lipid values do change every single day. I can consume lesser than 20g of carbs and bring down the triglycerides to very low value and the very next day I can raise it. Both values are right. Modern labs test your sample twice and if variance is large, they test again. I would suggest you repeat the test with another lab and see how it correlates.
I still feel PET CT business is a misfit to Thyrocare’s core competency of biochemistry. Looking forward to reduced taxes (will result in 15% increase in net profit according to my calculation even if there is no growth) and return to growth in the high teens.
Thyrocare is no theranos (wow, what a comparison)
Discl - accumulating since ipo
2 Likes
Corporate tax reduction will have a very significant impact on the net profit for Thyrocare (I know that it is very obvious) - thyrocare has been paying tax in the 35-40% range. Wow such a honest company, paying too much tax. I am not an accountant, so cant explain why such high tax rate
DSA rates and incentives have been revised w.e.f 01st October, 2019. Attached is the revised commission list. These incentives are for B2C. Not sure how much this will spur growth in B2C segment.
DSA Rate List 30-09-19.xlsx (11.5 KB)
1 Like
Does it mean they have finally raised tariffs? What were the old rates (non aarogyam)? The commission seems pretty high
Thyrocare has Sales Growth of over 10%, is Debt Free, is generating FCF each year. The CEO, Mr.Velumani is ambitious.
I think, The cheaper its stock price gets the better. It’s competitors, Lalpath and Metro are trading at 50PE.
Sometimes these kind of stocks keep getting cheaper every year.
Mr. Velumani might be a good man but he seems to enjoy the publicity. So he keeps giving lectures on the business in investor events, TV and trader carnivals. The more he talks the lesser his business profit grows and the stock performance suffers. I have not seen the promoters of Dr. Lal and Metropolis talk so much.
Maybe he should stop talking and concentrate on his business.
13 Likes
It’s TTM EPS is higher. No new debt. In such bad times it is good enough. If u see any negatives pls highlight them.
Lalpath is at a very high valuation. If growth stops, even temporarily, the stock will crash.
1 Like
Non-Arogyam profiles are covered in seond tab. Their commission structure has always been best in the industry. The only issue is that B2C has not been management’s focus.
Very true one example of getting limelight is offering to buy business from thyrocare at 400 crore and than all drama of auditor and then taken his decision back … He offered 400crore just to prove he is very ethical and all and at end it was just a waste of time and money. Thyrocare was among top 5 investement now slowly i offloaded the shares…
2 Likes
Have noticed you look at only a single metric of PE for any company valuation. In that case , i suppose you may end up with many low PE stocks which are not at all quality. There are various metrics to look at the valuations. Varies from person to person. I wish if investing was that simple to look at a particular ratio and decide.
Lalpath is more a B2C Business when compared to Thyrocare. B2C business is a high margin and thus many B2C Businesses are valued richly in comparison to B2B players. Thyrocare tried to venture for B2C but their main business is B2B and they are now foussing on that only.
Look at the ROCE’s of both Thyrocare and Lal PathLab. Thyrocare has ROCE around 30% average for 5 years while Lal Path has around 40%. Thyrocare distributes around 60-80% as dividends while Lal Path has payout ratio of around 20-25%. Thyrocare returns back most of the earnings as dividends while Lal Path utilizes most of the earnings in business and employ it at a far better rate of return. The difference in their valuations will remain !
Disc: No holdings in any of the above names. Not a SEBI Reg Advisor.
11 Likes
Who said Thyrocare is paying 35% tax. Please go through annual report. They paid less. The benefit is less than 10% as they are already enjoying the tax cuts of recent budget
I look at PE after other numbers, runway and management appear inline. Although, I am wary of high PE stocks, because I believe this category is for the ones who are well within their circle of competence. Moreso, in the current economic conditions.
If it were a bull market, then I would not expect a good stock like Dmart, Page, Gruh, 3M to be de-rated and would be more than happy to ride the wave on their backs. But, given the current economic uncertainty nothing seems worthy of risk taking. It is not a good time to invest on basis of future growth. In fact, lately I am considering ONGC and Cochin Shipyard more than HDFC Bank, at least for next year or so.
Thyro vs Lalpath
My understanding is that, B2Bs trade at lower PEs than B2Cs, mainly because the latter has better cash conversion cycle:
Lalpath CCC is -16 Days whereas Thyrocare is 15. That is a big difference of 31 days. Due to this, Lalpath is going to churn its funds far more efficiently. As a result with each passing year, Lalpath’s RoE is going to improve. I see that.
But, I am counting on temporary issues to crop up, like it did in cases of Page, 3M, Gruh and more recently for Aurobindo pharma. All good stocks, but due to my limitations I am not comfortable buying them at high PEs.
Lalpath is currently at 53 PE. If it fails to show growth for a quarter or two, then it will might be available as much as a 50% lower.
1 Like
I see payables > receivables for any particular year from annual report. But from where you got CCC days
Arey, how are these guys calculating. I don’t see this data in annual reports. Any one has idea
Lalpath
2019
Receivable -> 14.31
Inventory -> 8.47
Payables -> 36.52
CCC = 14.31+8.47-36.52 = -13.74
Which part do find is not tallying with the AR 2018-19
I am not able to find these numbers in latest annual report. How did they calculate inventory days, payable days etc
Thyrocare/Dr Lal are service companies (not manufacturing co) - please remember that. PE ratio of thyrocare is much less - 29.66
My concern in the short term is whether there will be impairment of pet ct business? If yes - profits will go down