Despite the muted listing, most analysts see Krsnaa Diagnostics a strong long-term play
Sunil Shankar Matkar
August 16, 2021 / 02:38 PM IST
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Krsnaa Diagnostics missed the analyst expectations after the shares opened at Rs 1,025, up 7.4 percent over the issue price of Rs 954 on August 16, the listing day. The stock did put a run as it rallied up to Rs 1,099.5 intraday (up 15.3 percent) but still fell short of expectations which had pegged the stock to open at around 30 percent premium.
At the time of writing this report, Krsnaa Diagnostics shares were trading at Rs 1,007.75 on the BSE, up 5.63 percent.
The majority of analysts advised holding the stock for the long term and buying the stock on correction, while investors who subscribed for only listing gains can book profits.
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“The company has the backing of strong sentiments due to its countrywide presence and network and the business model. The company has long term PPP contracts and hence reasonable assurance for the revenue and earnings visibility,” said Gaurav Garg, Head of Research at CapitalVia Global Research.
“Investors may hold the allotted shares for medium to short term. It would be better to buy the stock after a correction as the listing premium itself is significant,” he added.
Prashanth Tapse, VP Research at Mehta Equities said Krsnaa Diagnostics gives investors an opportunity to invest and hold in a leading and fastest-growing diagnostic chain in India on multiple parameters. “Krsnaa is well-positioned to capitalize on healthcare spending across public and private sectors and believe this sector will emerge as a strong alternative to healthcare demand,” he said.
He further said with the government’s focus via National Health Mission and public health awareness, the sector may see a long term 12-15 percent CAGR growth responsive to people’s needs in the current situation, wherein Krsnaa is well placed to tap the demand & supply going forward.
Hence, based on all the rationales, he advised investors to hold with a medium to long term perspective.
Astha Jain, Senior Research Analyst at Hem Securities advised booking profit on 1/4th of holding and hold the remaining 3/4th quantity for the long term as she likes the unique and scaled business model of the company.
“The company with its strong brand equity has an extensive footprint across India with a robust infrastructure. With robust revenue visibility, the company is well-positioned to capitalize on healthcare spending across public and private sectors,” she said.
Yash Gupta, Equity Research Associate at Angel Broking suggests investors book profits in Krsnaa on listing day and said if investors want to have exposure in diagnostic then Angel Broking has a positive view on Thyrocare Technologies as they believe Krshnaa has weak fundamentals and had assigned a neutral rating to Krsnaa Diagnostics IPO.
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