Kotak Institutional flags margin concerns at Dr. Lal PathLabs

Dr. Lal PathLabs

04/01/2023 04:42

** Kotak Institutional Equities flags margin pressure at 
Dr. Lal PathLabs  DLPA.NS  as it expands to smaller towns and
cities
    ** Keeps "sell" rating on stock with a fair value of 1,750
rupees
    ** 'We do not expect a major Covid boost for DLPA due to
75-80% reduction in RT-PCR test prices, less RT-PCR testing and
increased competition' - Kotak
    ** Adds, DLPA's share within India’s overall RT-PCR test
volumes has dipped to 0.3% from 2.3% in the past two years
    ** The brokerage cautions that as DLPA expands into tier 2/3
cities to safeguard itself against concentration risk and
competition, there can be further pressure on margins as the
non-metro mix increases
    ** Share price of DLPA is below the 50-day, 100-day and
200-day exponential moving average, suggesting bearish trend
    ** DLPA's shares were last up 0.4% at 2247.90 rupees at 9:58
a.m. IST
    ** Stock down over 40% last year
 (Reporting by Ashish Chandra in Bengaluru)
 ((ashish.chandra@thomsonreuters.com (+91 7982114624))