Although NOT related to Thyrocare but I was also surprised by reason provided by a different company for delisting (here the speculation is stopping concall).
Another reason for delisting, he says, is the excessive disclosure of financials that plays into the hands of competitors. Nearly 50% of the PET packaging industry is unorganised. “As a listed company, I have to declare way too much. But most of my competitors who track my every move don’t have to reveal anything. It’s an unequal playing field.
Despite this the company gave good returns to investors (I was one of the lucky shareholders)
Note : Moderators, feel free to delete as its not related to Thyrocare but adds value w.r.t. topic of discussion
Or think other way round which is more likely to be true… when his performance was not so great, he tries to talk up his company and the stock. Now he might not need to since the growth seems to be back as per you! I am not tracking this closely so can’t comment on performance.
A good lesson for all of us is that " if the business is for sale by a Private Equity firm, it is better to stay away"…
I am not concerned about the entry of reliance - diagnostics industry is very different and not comparable to telecom industry. The entry of reliance might kill the local pathlab industry and the big players will thrive at the expense of small labs. The runway is huge for several large players to co-exist…
All the above metrics are very much required in any business but i just want add one more but essential point and that is ROCE if u just disburse all the cash as dividend and not using it to expand ur business than there is no use of all those mentioned data. One need to use this cash flow to make more profit and so on.
So incremental capital employed is a must for this company to become a excellent business.
https://www.moneylife.in/article/how-founder-and-ceo-of-thyrocare-a-velumani-is-letting-the-stock-market-mess-up-his-mind/58901.html ( A paid article)
Some lines from recent interviews(Red flag as per me too much attention to stock prices )
“I did the disruption. However, it was not fully disrupted. I see a lot of opportunities to disrupt. I myself was tempted to disrupt it again but, in an investor-dependent company, in a listed company, every decision needs discussion after discussion; there are no decisions.”
“I believe I had a limited vision and I have reached up to here; but today I am not taking big decisions and I am going according to the investors’ wishes.
Another tantrum here… blame investors for not scaling up profitably. In fact he is trying to blame the board indirectly for slow progress towards his dream destination. I have been tracking the company since listing and never thought it would come to this stage. Some entrepreneurs deserve to keep struggling for life since they revel in the struggle/hard work and not in evolving with time and size of the business.
only way the company and stocks will do well is ……lesser he speaks/talks in media/lesser interview/investor calls etc. and focusing more on actual action related to business and growing /expanding it.
it will probably takes long time before market changes the perception/opinion about it and hence its trading at half the valuation of its peers without any real issue.
as its also growing at almost at same or little less rate
I was also tracking this stock for the business area and promoter… I have to step back on seeing the following…
1.promoter is everywhere always talking…
Very bad reviews by the employees in glassdoor and other job sites… While everyone will not be happy with salary (including me ) but almost everyone complained about work culture, long work hours.
I still do all my blood test with them and have no doubt on their reports.
I strongly feel Lal paths and metropolis are far ahead in business planning and acquisitions… The diagnostic sector is unique wherein inorganic growth is absolutely need.
I feel velumani had a dream, he pursued it but lost track during the journey…
The stock is absolute gem once the. Company starts running professionally with vigour to take competition headon.
Very poor reporting in my personal view - this report looked at the financial ratios/numbers only (everyone has access to this info) and views of certain analysts (these analysts know nothing about healthcare!). There was no deep dive as to why the difference. Buzzword was B2B and B2C - again not a good comparison, trying to generalize this business to businesses in the financial and consumer sector is not a good idea.
Metropolis and Dr Lal are very similar businesses, but Thyrocare’s business model is different…Most investors don’t understand this crucial difference (I don’t want to elaborate again, refer to my posts 1-2 years ago) and hence the miss-pricing - I am happy to bet against the consensus…
Also would like to point out that this report conveniently avoided the profit/ebitda margins of thyrocare vs metropolis/dr Lal. Selective reporting…
Growth has slowed but profits are growing still and with good RoE. PET CT business is struggling but they have stopped further investments in this business.
Dr V is definitely not a cheat. I will trust Dr V more than these business channels and analysts.
Thyrcare is returning back cash ( sign of limited opportunity to deploy cash in business to grow it ) while others aren’t as they on look out for acquisition and also deploying it to expand and grow their business.
May be thats why the valuation gap due to perceived growth potential.as market paysfor growth
Thyrocare’s business is not capex heavy (no requirement for huge capital investments upfront), but rather opex heavy (meaning they spend more on consumables as more samples come in). So no need to retain cash…
Dr V has clearly mentioned that he will not grow by acquisitions (not ruled out entirely but very unlikely in my view).
This business is growing 10-20% with minimal capital requirements and a long runway, ethical management and laser sharp focus on keeping costs low…
Key managerial remuneration (3 family members) - 7 crores in 2019
Directors remuneration (6) total - 87 lakhs in 2019
Other key management salaries - 1.21 crores in 2019
NPAT = 200 crores (revenue of 1200 crores)
Thyrocare
Dr Velumani salary - Rs 12 in 2019 (yes 12 only)
Sundarraju (brother of Dr V I think) - 60 lakhs in 2019
Ramjee Dorai 24 lakhs
Directors (6 in total) 4.5 lakhs
Total revenue = 370 crores,
Profit after tax = 95 crores
Dr Lal is very generous to their board of directors - most of us know directors don’t do much, they just rubber stamp the decisions made by the family
Dr V is very stingy and paying peanuts to his directors - I don’t mind this too much, since this company’s fate is decided by Dr V and his children (they are very bright and very grounded just like their father)
Not sure about the salaries of his children though - need to find out
Top industry executives including Metropolis Healthcare Ltd managing director Ameera Shah and Thyrocare CEO A Velumani discussed the issues at the VCCircle Healthcare Investment Summit 2019 recently.
) but almost everyone complained about work culture, long work hours.