On the surface, the estimates look very conservative and they still arrive at a healthy upside. Anyhow, comparing PEs to diagnostic labs makes no sense – in fact they’ve assumed half of the avg PE of players like Dr Lal to arrive at their targets. In my view, this is a much better business with much lesser competitive intensity and margin pressure.
I wish they had explained the basis of their growth assumptions. Also, any utilization of the massive cash pile for inorganic growth will be a big optionality. Very good to see Kilpest interacting with institutions – this seems to have stem from the meetings they held earlier in the month. Looking forward to more reports and hopefully some more communication with investors. The AGM may be a good opportunity to ask more questions.
Disclosure: Invested with about 15% of PF at cost (avg price is in the 450s), it has grown to well over 20% of PF with the recent run up.
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