4 THYROCARE share price target reports by brokerages below. See what is analyst's view on THYROCARE share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
COVID regime has changed the business mix for THYROCAR and impacted its profitability because of 1) lower gross margin at 53% (v/s 72% YoY) due to use of high cost reagents for COVID test, 2) aggressive pricing for COVID test and 3) increased employee cost at 16% of sales (v/s 11% YoY and 13% QoQ). We remain negative on entire diagnostic chain due to possible structural change in coming years and expensive valuation at Mcap/sales of 10.3x ,PE of 60x (FY21E) and 40x (FY22E). We maintain SELL recommendation and retain TP of Rs307 based on 18x of FY22E
We reduce our earnings estimate by 56% and 42% for FY21-22E and downgrade THYROCARE to SELL (earlier HOLD) with a new TP of Rs307 (earlier Rs523) 18x PE on FY22E.We believe THYROCARE earnings to be significantly impacted due to 1) loss of core business due to COVID lockdown and low footfall till 1HFY21E 2) post lockdown to struggle for competitive market share 3) high operating expenses (to comply with COVID guidelines).Despite having a track record on asset optimization, EBITDA margin would be 32% for FY21E (40.3% FY20) due to high fixed operating costs (employee cost 13% and SG&A 29% of sales) while COVID test may hold up revenues but contribution at the operating level would be minimal/ break-even. With the assumption of 15% decline in 1-month revenue and 2 months of complete washout in Q1FY20 led by 20% YoY decline in Q2FY21E, we estimate revenue/EBITDA negative CAGR of 5% and 6% over FY20-22E.
The stock trades at PER of 22x and 19x FY21E and FY22E respectively. With favorable seasonality Q4FY20E and lower base, we expect THYROCAR to grow at 15% YoY growth in revenues and 21% YoY growth in PAT due to lower tax rate to 25.2% from 34%. We have rolled forward our base of earnings estimates to 23x PE of FY22E for deriving new TP of Rs724 (from Rs686), improved by 6%. Management however guided for better growth of revenues and earnings in Q4FY20E with assumptions of normalized political environment in north India. We maintained ‘BUY’.
The stock trades at PER of 21.8x and 20.1x FY20E and FY21E respectively. With favorable seasonality Q4FY20E and lower base, we expect THYROCAR to grow at 15% YoY growth in revenues and 21% YoY growth in PAT due to lower tax rate to 25.2% from 34% in FY20E. While diagnostic companies are expected to trade at premium valuation with features of consumer’s business, THYROCAR valuation is at sharp discount to its peers. With earnings improvement and attractive valuation vs. peers, we increased our TP to Rs686 (from Rs595) and ‘BUY’ recommendation.
We maintain a ‘BUY’ rating and value Thyrocare at 24.2x FY21E EPS of Rs. 21.7 for a target of Rs. 526. Weaker than expected performance of additional employees hired and further depreciation of INR could pose a threat to our call.
Q1 Sales inline; Focus on growth to stave off competition from start ups The stock trades at PER of 23.8x and 21.5x FY20E and FY21E respectively. With favorable H2FY20E, we expect Thyrocare to at least 15% YoY growth in revenues and 15% YoY growth in PAT in FY20E as it focuses on EBITDA growth instead of profitability. Management guided that price rationalisations and advertisement (guided at 4-5% of sales) costs may impact EBITDA margin of its pathology business maximum by 400-500bps. While diagnostic companies is expected to trade at premium valuation with features of consumers business, Thyrocar valuation has been corrected by 36% in 12 months. With attractive valuation vs. peers, we maintain our earnings estimate and BUY rating with TP at Rs595.
The stock trades at PER of 21.6x and 18.1x FY20E and FY21E respectively. With favorable Q4FY19E, we expect Thyrocare to achieve 35% YoY growth in revenue and 27% YoY growth in PAT in Q4FY19E. Management guided that price rationalisations and advertisement (guided at 4-5% of sales) costs may impact EBITDA margin of its pathology business maximum by 400- 500bps. We believe that the decrease in realisations/test (due to increase in number of tests in bundle offer) will benefit in bigger volume growth FY20E. We expect benefits of lower price and promotions to be realised with lag effect and may have a J-curve impact on EBITDA margins. We expect the earnings growth to be 22% in FY20E. With strong free cash flow we expect diagnostic companies continues to trade at relatively premium valuations. We maintain our earnings estimate and BUY rating with TP at Rs795.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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