Thyrocare Technologies has presented impressive results for the first quarter of FY 2025-26, spanning from April to June. The company has outperformed expectations in revenue, profit, and operating margin. Following this robust performance, brokerage house ICICI Securities has maintained a positive outlook on Thyrocare's stock, raising its target price from the previous ₹1000 to ₹1460. Currently, the stock price is around ₹1206, indicating a potential upside of approximately 21% for investors.
Revenue Surge Due to Expensive Tests and Rate Hikes
The company launched several new and specialized tests during the quarter, which are generally expensive. Additionally, prices for existing tests were increased by 1.5 to 2 percent. This directly impacted the company's revenue per patient, which has now increased to ₹383 per patient. This figure is about 14 percent higher compared to last year. This means that Thyrocare is now able to generate more revenue even with fewer patients.
Growth Driven by Both Business Models
Thyrocare's business is divided into two main segments - a partnership model and a franchise model. The latest results show that the company has achieved b growth in both segments. The partnership segment saw a year-on-year increase of 36 percent, while the franchise segment also experienced a growth of 20 percent. This clearly indicates that the company is continuously strengthening its networking and service reach.
Strengthening of Profit and Margin
The company's operating position has also improved this quarter. Thyrocare's normalized EBITDA margin has now reached 34.5 percent, which is 3.5 percentage points higher compared to the same quarter last year. However, this time the company has given shares worth approximately ₹5.54 crore to its employees under the ESOP (Employee Stock Option Plan), due to which the reported margin has decreased to about 30 percent. Despite this, Thyrocare's overall financial position remains b.
Accelerated Work on Franchise Expansion Plan
The company is now making its expansion plans more aggressive. Thyrocare aims to add approximately 1200 new franchises throughout FY 2025-26. This will further accelerate the company's reach to smaller cities and towns. Along with this, the company's focus is now shifting from general tests to more specialized tests, as these generate higher revenue per patient and also have higher profits.
Confidence in ICICI Securities' Report
Brokerage house ICICI Securities is confident that the company will perform even better on both the income and profit fronts in the coming times. For this reason, the brokerage has also increased the company's FY26 and FY27 EPS estimates by 19 percent and 16 percent respectively. The brokerage believes that Thyrocare's growth strategy and profit direction are correct and this can increase the value of the share.
Employees Also Benefited
The company has also implemented a plan to give stock options to its employees this quarter. Under this plan, shares worth ₹5.54 crore have been given, which has also increased the engagement and trust of the employees with the company. This indicates that the company is thinking not only about profits but also towards team building.
Impact of Digital Facility and Service
The company has also strengthened its digital platform and home collection services. This has not only improved the customer experience, but has also increased the company's brand value. This strategy of Thyrocare differentiates it from its competitors. Customers are easily able to connect due to online booking, home sample collection and digital report facility.
Investor Confidence Increased
Given Thyrocare's improved performance and future strategy, investor confidence in the market has also increased. Brokerage firm reports and share price targets show that the company can perform even better in the coming times. The demand for the healthcare sector in the stock market also remains constant, which is benefiting companies like Thyrocare.
