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JMFL
Thyrocare Tech (Buy)
CMP: ₹657.45
Target: ₹920
In 2QFY18, Thyrocare’s revenue/EBITDA/adjusted PAT grew 13 per cent/ 18 per cent/ 40 per cent y-o-y to ₹88 crore/ 35.7 crore/ 24.8 crore, respectively. It reported a sharp decline in growth of diagnostics revenues to 12 per cent y-o-y, the lowest quarterly growth rate reported in the past 6 quarters (25 per cent+ y-o-y growth in each of those quarters), mainly due to the early onset of the festive season (Navratri and Dussehra), some disruptions due to heavy rainfall in Western India and the high base of 2QFY17.
Imaging revenues grew 32 per cent y-o-y (+11 per cent q-o-q versus JMFL’s estimate of 5 per cent), driven by good volume growth in the Hyderabad centre as well as the recently-opened centres in Raipur, Vadodara and Surat, which offset the volume decline in Delhi (due to FDG supply disruptions) and Mumbai centres. While its gross margin was in line with estimates at 70.6 per cent (-218 bps y-o-y), EBITDA margin improved 172 bps y-o-y to 40.6 per cent (versus JMFL’s estimate of 39.9 per cent) mainly driven by lower-than-expected staff costs and other expenses.
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