Kotak Equities initiates coverage on Dr Agarwal's Health Care shares with add rating, foresees 8% upside
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
Kotak Institutional Equities initiated coverage on Dr Agarwal's Health Care with an 'Add' rating and a target price of Rs 425, citing strong expected earnings growth and improving return ratios as the company focuses on organic expansion and operational ramp-up.The target price implies a 7.6% potential upside from the stock's closing price of Rs 394.95 on Tuesday. Shares of Dr Agarwal's ended 1.94% lower on the BSE.India's largest eye care chain, Dr Agarwal's Health Care , is expected to deliver 23% and 27% compound annual growth in EBITDA and earnings per share, respectively, over FY2024–28, the brokerage said in a note. Kotak Equities forecasts 22% revenue CAGR over the same period, supported by increasing footfalls, price hikes and a continued rollout of new centers.The brokerage said it expects Dr Agarwal's return on invested capital to improve to about 12% by FY2028, from 6.6% in FY2024, driven by a more disciplined acquisition strategy and operational scale-up.The Chennai-based firm plans to nearly double its network to 500 centers by FY2030 from 221 locations across India and Africa as of 9MFY25. However, the brokerage said it expects over 80% of future expansion to be organic, in contrast to its previous heavy reliance on acquisitions. The company has added over 50% of its centers through M&A in the past three years, often at valuations 2–3 times higher than greenfield setups, which weighed on its return ratios.While the recently added centers will continue to ramp up, the new organic additions are expected to drive growth with limited margin impact, the brokerage said, projecting EBITDA margins to rise by 80 basis points to 28% in FY2028.The company's hub-and-spoke model — comprising tertiary, secondary and primary centers — supports cost efficiency and scalability, the brokerage said. It expects footfalls to grow at a 22% CAGR through FY2028, aided by a cluster-based expansion strategy and capital-efficient setup model. Dr Agarwal's asset-light approach, with nearly all facilities leased, allows it to scale with minimal upfront investment, Kotak added.Despite the optimistic outlook, the brokerage flagged risks such as high revenue concentration in South India, potential issues in integrating acquisitions, and promoter family disputes.Also read | Dr Agarwal's Health Care shares list flat at Rs 397 on BSE (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
14 minutes ago
- India.com
Who Is Anand Jain? Close friend of Mukesh Ambani, was once a billionaire, his son lives near Rs 15000 crore Antilia, business is…
Mukesh Ambani is known to everyone as the richest person of India. But there are many people who are still behind the curtains but have contributed to Reliance's success. One such person who is also a childhood friend of Ambani and a real estate magnate is Anand Jain.. Who Is Mukesh Ambani's Friend Anand Jain? The bond between Mukesh Ambani and Anand Jain is from their school days at Mumbai's Hill Grange High School on Pedder Road. When Mukesh Ambani returned from Stanford University in the early 1980s to join the family business, Anand left his own ventures in Delhi to support him. Anand has already worked with Dhirubhai Ambani and developed his own business also. Anand Didn't Take Salary In a corporation everyone works for high pay packages and designations but Anand Jain was different among them. Though he played a big role in shaping Reliance's expansion especially for Reliance Infocomm, he never held a formal position or withdrew a salary. He was Mukesh Ambani's behind-the-scenes advisor, a steady voice in the war room. Anand Jain's Business Empire While advising Reliance, Jain was also building his own business empire. In 1985, he founded Jai Corp Limited, which emerged as a big player in industrial real estate, plastic processing, steel, and yarn manufacturing. In 2007, Forbes ranked Anand Jain as India's 11th richest person, with a net worth estimated at $4 billion. That same year, he led the Urban Infrastructure Opportunities Fund, India's largest real estate private equity initiative at the time, raising Rs 2,434 crore from over 750 investors. During its peak, Jai Corp's market cap was a $45 billion. By 2012, his net worth had declined to around $525 million. Anand Jain's Dream11 Link Anand Jain's son, Harsh Jain, co-founded Dream11 in 2008, which has since become one of India's top fantasy sports platforms and entered the unicorn club by 2019. Despite his massive business footprint, Anand Jain is famously media-shy. Harsh Jain, co-founder and CEO of Dream11, owns a luxury apartment in the Lodha Malabar project on Walkeshwar Road , which is near Mukesh Ambani's Antilia in Mumbai.
&w=3840&q=100)
Business Standard
14 minutes ago
- Business Standard
Force Motors Q1 profit jumps 53% to ₹278 crore on strong sales growth
Revenue from operations rose to ₹2,297 crore in the first quarter as against ₹1,885 crore in the year-ago period, Force Motors said in a statement Press Trust of India New Delhi Force Motors on Wednesday reported a 53 per cent increase in consolidated net profit to ₹278 crore for the first quarter ended June 30, 2025, on the back of robust sales growth. The Pune-based automaker reported a consolidated net profit of ₹182 crore for the April-June quarter of last year. Revenue from operations rose to ₹2,297 crore in the first quarter as against ₹1,885 crore in the year-ago period, Force Motors said in a statement. "This growth can be attributed to our consistent focus on meeting customer expectations, capitalising on domestic momentum, and improving internal efficiencies," Force Motors MD Prasan Firodia said. The continued trust of customers and the unwavering effort put in by teams have been pivotal to this success, he added. "With positive indicators in the domestic market, we remain optimistic about sustaining growth in the coming quarters. Our investments in innovation, reliability, and expanding our dealer network will further strengthen our market position," Firodia stated. The company said its domestic sales volume grew by 26 per cent, fuelled by robust demand across the flagship models Urbania, Traveller and Trax. The automaker noted that it currently maintains a zero-debt position, reflecting its prudent and disciplined financial management. Shares of the company on Wednesday ended 2.08 per cent down at ₹17,136.65 apiece on BSE. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Economic Times
14 minutes ago
- Economic Times
Infosys ADRs rise 3% after IT services company reports 9% YoY increase in Q1 PAT
Infosys' American Depository Receipts (ADRs) experienced a surge of over 3% following the release of its Q1FY25 earnings. The IT services company reported a 9% YoY growth in consolidated net profit, reaching Rs 6,921 crore, with revenue from operations rising 8% YoY to Rs 42,279 crore. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads American Depository Receipts (ADRs) of Infosys climbed over 3% on Wednesday following company's Q1FY25 earnings where the IT services company reported a 9% year-on-year (YoY) growth in its consolidated net profit at Rs 6,921 crore for the first quarter ended June. Revenue from operations rose 8% YoY to Rs 42,279 Bengaluru-based company has upped its lower end of revenue growth guidance, which is pegged at 1-3% in constant currency for results were announced after India market hours and Infosys shares settled at Rs 1,558.90 on the NSE, falling by Rs 12 or 0.76% over the Tuesday closing price even as the headline index Nifty closed with strong gains."Our performance in Q1 demonstrates the strength of our enterprise AI capabilities, the success in client consolidation decisions, and the dedication of our over 300,000 employees," said Salil Parekh, CEO and MD, in constant currency (CC) terms grew by 3.8% YoY and by 2.6% QoQ in the first quarter. The company had won deals worth $3.8 billion in the said period, of which 55% were net profit for the reporting period increased to Rs 13,055 crore as against Rs 12,138 crore in the same period of last margin for the April-June quarter stood at 20.8%, which is a decline of 0.3% YoY and decline 0.2% QoQ. The company expects the same to hover around 20-22% for the rest of wise, the dominant financial services clocked a CC growth of 5.6% YoY, while the manufacturing division rose by a healthy 12.2%. The retail growth was flat at 0.4%, and that of hi-tech business increased by a marginal 1.7%.The Life Sciences and other divisions de-grew 7.9% and 15.3% in CC terms, major Wall Street indices were trading mixed today with Dow 30 trading at 44,703.90 around 10:40 AM ET (8 pm India time), up 201.43 points 0.45%, the S&P 500 index hovered near 6,323, gaining by 13.61 or 0.22%. The Nasdaq Composite index was trading at 20,889.20, declining marginally.
