Sell Thyrocare Technologies; target of Rs 307: Prabhudas Lilladher

Prabhudas Lilladher is bearish on Thyrocare Technologies has recommended sell rating on the stock with a target price of Rs 307 in its research report dated May 27, 2020.

Prabhudas Lilladher's research report on Thyrocare Technologies

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.

Outlook

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.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Moneycontrol Ready Reckoner
Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.
Download a copy Get best insights into Options Trading. Webinar by Mr. Vishal B Malkan is Live. Watch Now!Read More