In spite of recent selling, insiders still control 55% of Dr. Lal PathLabs Limited (NSE:LALPATHLAB)

Key Insights

• Insiders appear to have a vested interest in Dr. Lal PathLabs' growth, as seen by their sizeable ownership
• 52% of the business is held by the top 2 shareholders
• Insiders have sold recently

If you want to know who really controls Dr. Lal PathLabs Limited (NSE:LALPATHLAB), then you'll have to look at the makeup of its share registry. With 55% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And insiders own the top position in the company’s share registry despite recent sales.

Let's delve deeper into each type of owner of Dr. Lal PathLabs, beginning with the chart below.

View 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 can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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. Our data suggests that Arvind Lal, who is also the company's Top Key Executive, holds the most number of shares at 33%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Vandana Lal is the second largest shareholder owning 19% of common stock, and Invesco Ltd. holds about 3.6% 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.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own the majority of Dr. Lal PathLabs Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹208b, that means insiders have a whopping ₹115b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Dr. Lal PathLabs better, we need to consider many other factors. Take risks for example - Dr. Lal PathLabs has 2 warning signs we think you should be aware of.

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.

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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.