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Check Before You Invest : Dr. Agarwals Health Care Ltd

BSE: 544350 NSE: AGARWALEYE ISIN: INE943P01029
  |   Sector:  Healthcare   |   Industry:  Hospital & Healthcare Services

Snapshot

Q.1 Which industry/sub-sector does Dr. Agarwals Health Care Ltd belong to?
Dr. Agarwals Health Care Ltd belongs to the Healthcare sector, operating specifically within the Hospital & Healthcare Services segment.
Q.2 Is Dr. Agarwals Health Care Ltd a good quality company?
Dr. Agarwals Health Care Ltd is a good quality company, based on a consistently good 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 Dr. Agarwals Health Care Ltd undervalued or overvalued?
Dr. Agarwals Health Care Ltd appears Fair, as its key valuation ratios are in line with 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 114.27 142.37
Price to Book 7.29 7.24
Price to Sales 7.29 8.24
EV to EBITDA 24.55 27.87
Q.4 Is Dr. Agarwals Health Care Ltd a good buy now?
Dr. Agarwals Health Care 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 Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd revenue growth is 28.4% for FY-2025, which is above its 5-year CAGR of 26.38%, indicating faster growth.

Q.2 Gross Profit margin of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Gross profit margin which is the profit after deduction of direct costs, is 23% for FY-2025, which is in line with its 5-year median of 22.2%, indicating stable margins.

Q.3 Operating Profit Margin of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 26.64% for FY-2025, which is in line with its 5-year median of 26.64% indicating stable margins.

Q.4 Net Profit Margin of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Net Profit Margin is 6.45% for FY-2025, is in line with its 5-year median of 6.45%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 23 22.2
Operating Profit Margin (%) 26.64 26.64
Net Profit Margin (%) 6.45 6.45

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Return on Asset is 3.47%, which is below its 5-year historical median of 4.24%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Return on capital employed is 14.32% for FY-2025, which is below its 5-year historical median of 17.77%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Return on equity is 6.92% for FY-2025, which is below its 5-year historical median of 9.69%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Cash conversion cycle is -3 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) 0.54 0.62
ROE (%) 6.92 9.69
ROCE (%) 14.32 17.77
Cash Conversion Cycle -3 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 Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Debt-to-Equity ratio is 0.13, 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 Dr. Agarwals Health Care Ltd?
Dr. Agarwals Health Care Ltd Debt to cash flow from operations is 0.69, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Dr. Agarwals Health Care Ltd?

Q.1 Promoter shareholding and pledge status of Dr. Agarwals Health Care Ltd?
Promoters hold 32.36% of the Dr. Agarwals Health Care Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Dr. Agarwals Health Care Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Dr. Agarwals Health Care Ltd vs industry peers?
Dr. Agarwals Health Care Ltd revenue CAGR is 26.38%, 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 (%) 28.4 1.4
Gross Profit Growth (%) 26.7 18.5
Operating Profit Growth (%) 24.6 15.4
Net Profit Growth (%) 15.8 23.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.54 0.73
ROE (%) 6.92 13.88
ROCE (%) 14.32 17.77
Cash Conversion Cycle (days) -2.66 1

Valuation & price assessment

Q.1 Stock return of Dr. Agarwals Health Care Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of 27.98% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - 28%
Q.2 Valuation ratios of Dr. Agarwals Health Care Ltd vs historical?
The current P/E ratio of 114.27 is lower than its historical median of 142.37, indicating that the stock is trading below its historical average valuation.
Q.3 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 114.27 142.37 37.25
Price to Book 7.29 7.24 3.64
Price to Sales 7.29 8.24 4.21
EV to EBITDA 24.55 27.87 17.66

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