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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