Thanks for sharing. This type of test is best suited for medical camps in rural areas, doctors working in resource-poor areas etc. This is not going to disrupt traditional diagnostic companies.
Not relevant to Thyrocare - I don’t think they offer cervical cancer screening test
Fantastic quarterly result! 36% growth (aided by tax cut)!
No dividend declared - this is most likely due to the changes in the way dividends are taxed from now on. Dr Velumani will end up paying 30% (or even more) as tax on dividends! I don’t know how he has structured his stake in thyrocare?
The good news for the non-promoter investors is that Thyrocare will no long pay dividend distribution tax (DDT) - this is great since thyrocare pays out significant dividends regularly and more will end up in the pockets of individual investors (although dividends taxed as per your tax bracket)
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The numbers have looked good now for two consecutive quarters and growth has probably made a comeback. What I was curious about though post budget was how promoters would react post-budget to the removal of DDT and it being taxed at higher rates of about 40% for them. There is widespread consensus on the fact that this would reduce amount of dividends paid out, which I think is accurate.
Curiously though in Saturday’s board meeting post-budget, Dr Velumani has continued his stance of taking Rs.1 salary for the next 5 years.
He holds 28% stake as an individual and so do his family.
Perhaps this will be structured as a Trust to reduce the tax outgo on dividends but this was an interesting move nonetheless.
Disc: Have a trading position
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The topline growth has been fairly consistent apart from couple of quarters here and there. Additionally, the company is able to get the complete benefit of corporate tax cuts. I would need to delve deeper to understand the substantially lower PE multiple assigned by the market to this company vs peers. The entry of reliance might be a future event. The past failed venture of PET scans is also accounted for by now.
Given the coronavirus mindshare in the news, I think there will be some boost to diagnostic tests in general, due to overall increased health awareness and not specifically to test coronavirus is what I think.
Let’s see what will market rerate it , if at all it does as gap between it’s and PE of it’s distant cousins like Dr lal and Metropolis is huge
2 subsidiaries at Surat and Baroda closed due to unfair practice
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The announcement is - This is to update that two centres of Nueclear Healthcare Limited, the wholly owned subsidiary of our company, situated at Surat and Baroda have been closed due to unfair business practices by the Franchisee.
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Testing is susceptible to disruption i come across an example and many more may be in working stage which can pose threat to the sector
One exemplar of that pending disruption is teenager Jack Andraka, who at the age of fourteen single-handedly developed an early-stage detection test for pancreatic cancer that costs just three cents. His approach (awaiting peer review) is 26,000 times cheaper, 400 times more sensitive, and 126 times faster than today’s diagnostics. Big Pharma has no idea how to deal with Jack, who is one of many wunderkinds emerging globally, all of them with the potential to disrupt great companies and long-established industries. The Jacks of the world bring exponential thinking to our linear world—and nothing is going to stop them.
source : 1 book Exponential organisations
2 : https://www.inspiredinsider.com/jack-andraka-interview/
3 https://www.youtube.com/watch?v=g-ycQufrgK4
disc : not invested This is not any buy or sell recommendation I am not any SEBI approved Analyst
Regards
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The only problem is this test is not commercialized and couldn’t succeed, even after 7 years of that TED video! No point in finding new ways to test a disorder if you can’t prove scientifically that it is superior to the standard test (CA-19 9 in this case - CA 19 9 is still the standard blood test for pancreatic cancer!). If the test was very promising it would have become standard of care by now - it is not, this test is not even mentioned in the some of the medical group websites, link below
Also I don’t think if a test becomes cheaper or if a new cheaper test becomes available it is bad for diagnostic companies - in fact such tests will benefit them since diagnostic companies will start offering such tests. These tests will be used more widely/commonly
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Featured on Discovery channel’s ‘The Great Indian Factory’. This video offers a glimpse into the logistics, the Central processing lab and automation involved. Nice to see Mr.Velumani somewhat taking a backseat and letting someone else speak (Ceaser Sengupta, VP Ops. does most of the talking for a change).
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Thyrocare has introduced a non-invasive cancer detection test using blood samples for 16 types of cancers.
https://datarpgx.com/easycheck360/
This is offered clubbed with other tests in 3 packages.
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I am not clear on what is each partner’s responsibility and what is the earning potential.
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I know from my own personal experience that these blood tests (sometimes called liquid biopsy) aren’t accepted by senior Oncologists…and for a good reason. They are notorious for false positives. Blood tests done by two separate labs may not match. Such results will have to be corroborated by CAT scan and tissue biopsy before treatment can begin.
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Testing challenges
There is a significant reduction in volume of non-covid tests for all diagnostics labs. COVID tests have very slim margins. I wont be surprised if some of these companies report losses in next quarter.