Divi’s Labs reported strong performance in Q4 FY24, with its profit after tax (PAT) jumping 67.6% year-on-year to ₹538 crore, supported by an 18.04% increase in revenue. Despite a solid Q4, the full-year FY24 results showed a slight dip in profit, down 12.28% from the previous year, while revenue remained steady. Additionally, the company declared a final dividend of ₹30 per share for FY24. The Indian healthcare sector is expected to reach US$ 372 billion by 2022, driven by rising incomes, greater health awareness, lifestyle diseases, and increasing access to insurance. Healthcare has become one of India’s largest sectors – both in terms of revenue and employment.
Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, and medical equipment. The structure of the healthcare delivery system in India consists of three broad segments: Primary care, Secondary care, and Tertiary care.
- Primary care is the first point of contact between the population and the healthcare service providers. For example, Sub-center (SC), Primary Health Centre (PHC), and Community Health Centre (CHC) which is more relevant to rural areas (PHC’s).
- Secondary care provides inpatient as well as outpatient medical services and includes simple surgical procedures. For example, District level & Mid-sized hospitals.
- Tertiary care is the third level of the healthcare delivery system in the country. These hospitals are specialized consultative healthcare infrastructure. For example, Single-specialty and Multi-specialty hospitals.
While healthcare services are offered by the public as well as private sectors, in urban as well as rural areas, generally people prefer private hospitals over public hospitals for the treatment of diseases, illness, and sickness. So, let’s look into Divi”s Lab and its performance over the period of time. Divi’s Lab stock price today is Rs 5,030.70.
- Operating cash flow ratio: It measures the adequacy of a company’s cash generated from operating activities to pay off short-term financial obligations. Divi’s Lab cash from the operating activity was Rs 1266 Cr.
- Financial Strength: Healthcare organizations usually have high debt loads and low equity capital in their balance sheet. So, the Debt to Equity ratio is important to analyze the company’s sustainability. Divi’s Lab has a Debt-to-equity ratio of 0, which is a strong indication for the company.
- EPS growth: Investors should ensure the EPS figure is growing faster than revenue numbers because it indicates company management is increasing the efficiency with which it runs the company. In Divi’s Lab, the EPS growth was -12.83 % which is bad for the company.
- Operating profit margin: It determines a company’s potential earnings. It assesses how well-managed a company with respect to its basic overhead costs and other operating expenses, Divi’s Lab has an OPM of 28.38 % which is a good sign for profitability.
- ROE: Divi”s Lab have an average ROE of 12.04 %. ROE is an important financial parameter for hospitals & health care companies because they expand and grow rapidly. Therefore, ROE measures how efficiently a shareholder’s fund is used for generating profits.
