Dr Lal acquired Suburban at < 4 P/S, so on face value hitech acquisition looks expensive. But there can be nuances:
Suburban had huge covid revenue (>50% of total revenue) which should drop significantly and hence on normalized basis the deal may not be that sweet
Difference in competitive intensity in West and South
Available acquisition option in respective markets
Since this deal is also cash, it tells us about nature of acquisitions in this space.
Maybe we will not get answers to all the questions, need to continously track developments, it is turning out to be high action industry in near future.
If there are 2 options only (available) then I will choose both. It’s my philosophy. It may be different for others.
But I think there are much more competitors out there in the Indian market.
Choose both at 50/50, Metropolis is strong in West and South, DrLal is strong in North and East. This sector is very very difficult to be dominated by one player, therefore non-predictable who would be clear winner. On the other hand there are very limited, only 3-4 players who could be developed on pan India basis.
Non-covid business could have grown faster,
however the company witnessed sharp drop
in volumes from a government contract.
Company expects the testing volumes from
Government to normalize in Q4FY22.
Commentary in the concall has slowly shifted to management saying that they are seeing heightened competition and expanding/preserving margins is not easy. This commentary was earlier that competition has always been there but inorganized pie is so huge that all can thrive.
Very true observation. There is no reliable market share data like we have on Telecom. Key monitoring from here is 1) EBITDA margin and 2) Revenue Growth. Metropolis has guided Pre-Covid time Ebitda (read as EBITDA before stock grant and CSR spend ) of 27% to 28% and they expect Non-Covid revenue growth to gain steam after Q2 FY23.
And see the connection here …I was not aware that AMEERA SHAH of METROPOLIS sits on board of TORRENT PHARMA…This was out of the blue that i pasted the above news in this page
There is good chance that METROPOLIS might bring in TORRENT PHARMA as their investors and gradually release their stake since some whispers were heard that METROPOLIS are in process to cash out.
Pharma companies can leverage their MR to pull new business from doctors. And the way in which doctors prescribe branded drugs/medicines ,same way they will articulate, to get reports done from a particular lab considering reports from other labs as not reliable. So we as patients are bound to follow are family doctor. TORRENT is going to do the same and have been hiring MR’s in good count as heard from latest news that they have hired some 300 people for drug selling.
