Fundamentals

DR. LAL PATHLABS

Ticker : 539524 
BUY: Rs 1069.35 
Target: Rs 1185 

The company is a provider of diagnostic and related healthcare tests and services in India. It has become the largest diagnostic chain in North India having 193 clinical labs with 2153 patient service centres and 5624 pick-up points across India. It has overseas operations in Nepal, Sri Lanka, Saudi Arabia, UAE, Nigeria and currently has acquired a lab in Bangladesh. Now, the company plans to expand in the eastern and southern markets of India with focus on Kolkata and Bangalore, respectively. Its net profit has grown at CAGR of 21.3 percent over FY16-18. The company is optimistic about growing by 15-20 per cent on a YoY basis. The return ratios are healthy as compared to peers by delivering ROE and ROCE of 24.4 percent and 37.8 percent respectively in FY18. Considering the above factors, we recommend it as a BUY.



RUPA & COMPANY

Ticker : 533552 
BUY: Rs 347.90 
Target: Rs 385

Rupa & Company’s product portfolio includes thermal wear, knitted innerwear and casual wear for men, women and kids of all age groups. It owns 18 brands, which includes Frontline, Euro and Bumchums under basic segment and Macroman under the premium segment. Recently, it has acquired India licence for the super-premium brand ‘FCUK’ of UK and also the ‘Fruit of the Loom’ brand of the US. Its wide distribution network consists of 1,000 dealers and 125,000 retailers. In Q2FY19, despite the flat revenue, the company’s EBITDA grew by 27.4 percent YoY with EBITDA margin of 19.7 percent as against 15.4 percent in Q2FY18. PAT too grew strongly by 30 percent YoY from Rs 21.6 crore to Rs 28.1 crore. Considering high improving margins and successful operations of international brands, we recommend it as a BUY.