Atrump Games

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Stay Away from Dr.Lal Path Labs -- Very High Valuation

These days, most of the companies are getting oversubscribed whenever they file for IPO given the sentiments of the market. Dr.Lal path Labs received overwhelming response and debut in equity market with a bang 30% plus gain. The Current price of share is around 933 INR per share whereas the price per earning is around 57 which is very high.

At this moment, its the right time for the investor to exit from it and wait for the market selloff to reenter at a price point somewhere 625 INR per share. The market sentiment is bullish on pathological based companies given the growth they showcased in the past few year. Earlier they used to charge astronomically high charges for the test but now government are vigilant and especially Delhi government placed a cap for the maximum charges in case of few test.
It is impossible to maintain double digit growth for long. A misfire in achieve very high expectation ofequity market regarding growth and profitability will lead to crash of share price.

The company share price already valued more than $1.2 Bn whereas revenue is around $35 Mn and profit of $5 Mn in just concluded Q1, FY17 donot justify the valuation. Take your call and don't follow the continuous upswing as an opportunity.

Disclaimer - Consult your financial advisor before investing
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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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