ICICI Securities: Covid-19 Tests And Cost Control Aided Margins Of Thyrocare Technologies
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ICICI Securities Report
Thyrocare Technologies Ltd. reported better than estimated performance in Q1 FY21 supported by Covid-19 tests and tight cost control.
Consolidated revenue declined 48.7% YoY to Rs 563 million (our estimate Rs 431 million). Ebitda margin dropped 2,660 basis points YoY and 1550 basis points QoQ to 15.0%.
The company conducted 0.08 million Covid-19 tests which contributed approximately 42% to total sales in Q1 FY21. Regular pathology business witnessed a volume decline of 64.6% in the number of samples due to lockdown which impacted preventive tests significantly.
The company’s model of low pricing/high volume strategy was severely affected and focus on preventive tests would take few quarters to revive.
However, proportion of preventive and wellness tests to total diagnostics industry is expected to improve materially in long term.
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