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Check Before You Invest : Lotus Eye Hospital And Institute Ltd

BSE: 532998 NSE: LOTUSEYE ISIN: INE947I01017
  |   Sector:  Healthcare   |   Industry:  Hospital & Healthcare Services

Snapshot

Q.1 Which industry/sub-sector does Lotus Eye Hospital And Institute Ltd belong to?
Lotus Eye Hospital And Institute Ltd belongs to the Healthcare sector, operating specifically within the Hospital & Healthcare Services segment.
Q.2 Is Lotus Eye Hospital And Institute Ltd a good quality company?
Lotus Eye Hospital And Institute Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Lotus Eye Hospital And Institute Ltd undervalued or overvalued?
Lotus Eye Hospital And Institute Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 336.63 45.08
Price to Book 3.64 2.50
Price to Sales 4.26 3.13
EV to EBITDA 54.94 18.63
Q.4 Is Lotus Eye Hospital And Institute Ltd a good buy now?
Lotus Eye Hospital And Institute Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd revenue growth is 2.8% for FY-2025, which is below its 5-year CAGR of 4.09%, indicating slower growth.

Q.2 Gross Profit margin of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.8% for FY-2025, which is below its 5-year median of 16.1%, indicating decreasing margins.

Q.3 Operating Profit Margin of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.18% for FY-2025, which is below its 5-year median of 13.76% indicating decreasing margins.

Q.4 Net Profit Margin of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Net Profit Margin is 1.49% for FY-2025, is below its 5-year median of 6.05%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8.8 16.1
Operating Profit Margin (%) 7.18 13.76
Net Profit Margin (%) 1.49 6.05

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Return on Asset is 1.09%, which is below its 5-year historical median of 4.51%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Return on capital employed is 3.1% for FY-2025, which is below its 5-year historical median of 7.19%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Return on equity is 1.24% for FY-2025, which is below its 5-year historical median of 4.98%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Cash conversion cycle is 7 days, above its 5-year historical median of -7 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.73 0.73
ROE (%) 1.24 4.98
ROCE (%) 3.1 7.19
Cash Conversion Cycle 7 days -7 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.20, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Lotus Eye Hospital And Institute Ltd?
Lotus Eye Hospital And Institute Ltd Debt to cash flow from operations is 0.22, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Lotus Eye Hospital And Institute Ltd?

Q.1 Promoter shareholding and pledge status of Lotus Eye Hospital And Institute Ltd?
Promoters hold 40.14% of the Lotus Eye Hospital And Institute Ltd, with 87.15% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Lotus Eye Hospital And Institute Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Lotus Eye Hospital And Institute Ltd vs industry peers?
Lotus Eye Hospital And Institute Ltd revenue CAGR is 4.09%, compared to the industry median CAGR of 1.38%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 2.8 1.4
Gross Profit Growth (%) -50 18.5
Operating Profit Growth (%) -42.9 15.4
Net Profit Growth (%) -66.7 23.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.73 0.73
ROE (%) 1.24 13.88
ROCE (%) 3.1 17.77
Cash Conversion Cycle (days) 6.75 1

Valuation & price assessment

Q.1 Valuation ratios of Lotus Eye Hospital And Institute Ltd vs historical?
The current P/E ratio of 336.63 is higher than its historical median of 45.08, indicating that the stock is trading above its historical average valuation.
Q.2 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 336.63 45.08 37.25
Price to Book 3.64 2.50 3.64
Price to Sales 4.26 3.13 4.21
EV to EBITDA 54.94 18.63 17.66
Q.3 Stock return of Lotus Eye Hospital And Institute Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 20.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
20.4% 15.7% 12.7% 46.6%

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