Why did Thyrocare Technologies share price fall 8% despite 47% YoY PAT growth?

Synopsis: Thyrocare reported strong 47% YoY PAT growth in Q3 FY26, but the stock fell as investors flagged rising promoter share pledges. Increased encumbrance, despite unchanged promoter holding, raised concerns over promoter leverage and potential downside risk.

The shares of this company, which is engaged in the business of the healthcare industry and is involved in providing quality diagnostic services at affordable costs to patients, laboratories and hospitals in India, had its shares in focus today after it reported a robust results today but there is one thing a investor has to know before investing in this firm 

With the market cap of Rs 6,808 crore, the shares of Thyrocare Technologies Ltd have fallen 8% and reached a low at Rs 423.05, compared to their previous day’s closing price of Rs 459.20. The shares are trading at a PE of 48.1, whereas its industry PE is at 36.

Q3 Result highlights

The revenue from operation for the company stood at Rs 196 crore when compared to Rs 166 crore in Q3 FY25, growing by about 18 per cent on a YoY basis and on a QoQ basis falling by 10 per cent from Rs 217 crore in Q2 FY26.

The PAT grew by about 47 per cent on a YoY basis when you compare the Q3 FY26 profit at Rs 28 crore to Rs 19 crore in Q3 FY25 and on a QoQ basis has fallen 41 per cent from Rs 48 crore in Q2 FY26. 

Why investors need to be careful?

The announcement reveals that a fresh encumbrance has been created by Docon Technologies Private Limited, the promoter group entity, on bonus shares, thereby increasing the total number of pledged shares to 9.69 crore equity shares.

The pledge is secured against secured, unlisted, redeemable, non-convertible debentures (NCDs) issued by the promoter group entity. Notably, although the percentage of promoter shareholding remains unchanged at 60.93%, the percentage of encumbered promoter shares has increased, thereby increasing leverage at the promoter level 

The critical concern for investors is not dilution but financial risk associated with promoter leverage. The pledged shares are collateralised against promoter borrowings, and any stress at the promoter entity, such as the inability to service NCDs, may result in the invocation of the pledge and subsequent forced sale of shares. 

Such selling pressure may be substantial on the stock price, regardless of the company’s fundamental performance. The fact that the pledge is against debt instruments such as NCDs also indicate medium-term funding obligations, which may turn sour if market conditions or performance deteriorate.

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