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ICICI Securities Report
Thyrocare Technologies Ltd.'s Q1 FY23 performance was in line with our estimates on all fronts.
Non-covid pathology revenue improved 8.7% QoQ driven by 19.1% QoQ growth in volume. Covid sales contribution sharply declined to 2.1% of total revenue versus 38.6% / 12.3% in Q1 FY22 / Q4 FY22.
Total revenue fell 22.4% YoY to Rs 1.3 billion as expected. Ebitda margin contracted 1,520 basis points / 70 bps YoY / QoQ to 28.1% (our estimate: 28.1%).
Sharp fall in margins was due to aggressive expansion, discounting and decline in the high-margin Covid sales. While margins in the near term are likely to remain under pressure with focus on volume growth led by aggressive expansion and discounting, operating leverage should support margins over the medium term.
We remain optimistic on the growth potential for Thyrocare, especially with integration of API Holdings Ltd.
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