Why Is InCred Equities Turning Positive on Thyrocare Tech After Margin Recovery?
InCred Equities has reiterated an Add rating on Thyrocare Technologies with an unchanged target of ₹1,400 after the diagnostic company reported a steady operational quarter and strong margin rebound. The Q2FY26 performance was largely in line with expectations, supported by higher test volumes and cost efficiencies.
Revenue rose 20% YoY, marking the fifth consecutive quarter of double-digit growth. Despite lower fever-related test demand (down 26% YoY), core volume growth remained strong at 21%, underscoring resilient patient traction and expanding test base.
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Realization per test improved by 2% QoQ, and the EBITDA margin expanded by 180 bps sequentially, driven by operating leverage and cost optimization. The radiology segment, which faced temporary disruption due to limited centre operations, is expected to recover steadily in the coming quarters.
Thyrocare’s subsidiary, Nuclear Healthcare Ltd., witnessed a sharp improvement in gross margin by 270 bps QoQ. Management expects H2FY26 margins to sustain around 34%, implying healthy profitability. Consequently, InCred raised FY26 margin forecasts by 80 bps to 32.6% and upgraded EPS projections by 8%.
Volume momentum remains the key driver as Thyrocare continues to expand its network footprint and franchise base. However, any slowdown in wellness demand or delayed franchise onboarding could pose near-term risks, the report cautioned.
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InCred remains optimistic on Thyrocare’s steady growth trajectory, strong franchise model, and improving operating leverage. The brokerage expects sustainable performance in FY26 driven by high-margin specialized testing and new wellness initiatives.
Investor Takeaway: Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that InCred’s constructive stance on Thyrocare stems from consistent volume resilience and margin expansion potential, making it a steady healthcare sector performer.
Related Queries
- What drives Thyrocare’s improving EBITDA margins?
- How will the radiology business contribute to FY26 growth?
- Is the diagnostic sector poised for further consolidation?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
