Dr. Lal PathLabs Limited's (NSE:LALPATHLAB): Top Key Executive Arvind Lal is the most bullish insider, and their stock value gained 3.2% last week

Key Insights

• Dr. Lal PathLabs' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 52% ownership
• Institutions own 33% of Dr. Lal PathLabs

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

A look at the shareholders of Dr. Lal PathLabs Limited (NSE:LALPATHLAB) can tell us which group is most powerful. The group holding the most number of shares in the company, around 55% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit ₹275b market cap following a 3.2% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Dr. Lal PathLabs.

Check out our latest analysis for Dr. Lal PathLabs

What Does The Institutional Ownership Tell Us About Dr. Lal PathLabs?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Dr. Lal PathLabs already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Dr. Lal PathLabs, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Dr. Lal PathLabs. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Dr. Lal PathLabs' case, its Top Key Executive, Arvind Lal, is the largest shareholder, holding 33% of shares outstanding. Vandana Lal is the second largest shareholder owning 19% of common stock, and HDFC Asset Management Company Limited holds about 3.8% of the company stock. Interestingly, the second-largest shareholder, Vandana Lal is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Dr. Lal PathLabs

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Dr. Lal PathLabs Limited stock. This gives them a lot of power. That means insiders have a very meaningful ₹152b stake in this ₹275b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Dr. Lal PathLabs. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Dr. Lal PathLabs that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.