Diagnostic cos' valuations much ahead of growth expectations: Prabhudas Lilladher

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On PharmEasy, he said, “I think the major part of the valuations are very high, maybe there is a potential that integrated healthcare service provider, which is an emerging trend, post-merger of PharmEasy and Thyrocare, that might come to them. Going forward, I think even many hospitals will join the race. I think bigger guys like Metropolis Health, Dr Lal PathLabs, they have the capacity of creating similar kind of assets by acquiring anyone, given the kind of money they have or the cash reserve they have. So, I think that is a valuation which I believe came about in the last one-and-a-half years, that could be one of the potential reasons for their higher valuation rise. But for PharmEasy and Thyrocare, you need to give them time, at least one to two years, to see the actual reality and success. If they succeed, I think that will be the emerging trend and this high valuation might be maintained for this sector.”

On Lupin, he said, “I think this is very baffling, actually there is no related growth into that space. I believe that management might be thinking of creating some asset going forward, say next four or five years. They might be creating some in-house asset which could be separately listed and getting some value for them.”