In This Article:
Dishman Carbogen Amcis Limited (NSE:DCAL), a ₹43.37b small-cap, operates in the healthcare industry, which continues to be affected by the sustained economic uncertainty and structural trends, such as an aging population, impacting the sector globally. Healthcare analysts are forecasting for the entire industry, an extremely robust growth of 30.5% in the upcoming year , and a whopping growth of 91.4% over the next couple of years. This rate is larger than the growth rate of the Indian stock market as a whole. Below, I will examine the sector growth prospects, and also determine whether Dishman Carbogen Amcis is a laggard or leader relative to its healthcare sector peers.
View our latest analysis for Dishman Carbogen Amcis
What’s the catalyst for Dishman Carbogen Amcis’s sector growth?
Life sciences companies are confronted with ways to improve R&D productivity, increase the efficiency, and enhance financial performance. In the previous year, the industry saw growth of 6.9%, though still underperforming the wider Indian stock market. Dishman Carbogen Amcis leads the pack with its impressive earnings growth of 41.4% over the past year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 24.6% compared to the wider life sciences sector growth hovering in the thirties next year. As a future industry laggard in growth, Dishman Carbogen Amcis may be a cheaper stock relative to its peers.
Is Dishman Carbogen Amcis and the sector relatively cheap?
Life sciences companies are typically trading at a PE of 35.39x, higher than the rest of the Indian stock market PE of 19.33x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry returned a similar 9.0% on equities compared to the market’s 9.3%. On the stock-level, Dishman Carbogen Amcis is trading at a lower PE ratio of 24.04x, making it cheaper than the average life sciences stock. In terms of returns, Dishman Carbogen Amcis generated 3.5% in the past year, which is 5.4% below the life sciences sector.
Next Steps:
Dishman Carbogen Amcis is a life sciences industry laggard in terms of its future growth outlook. This is possibly reflected in the PE ratio, with the stock trading below its peers. If the stock has been on your watchlist for a while, now may be the time to dig deeper. Although the market is expecting lower growth for the company relative to its peers, Dishman Carbogen Amcis is also trading at a discount, meaning that there could be some value from a potential mispricing. However, before you make a decision on the stock, I suggest you look at Dishman Carbogen Amcis’s fundamentals in order to build a holistic investment thesis.