Dr. Lal Pathlabs Ltd. share price target

Dr Lal PathLabs’ (Dr Lal) Q4FY25 results were slightly better than our expectation. Outperformance was driven by higher sample volumes (up 9.5% YoY) and realisation improvement.

DLPL reported a steady Q4, with EBITDA beating street/our estimates by 6% and adj PAT improving 34% on YoY basis. Strong performance in core markets (Delhi NCR), buoyed by network expansion, offset the persistent muted performance of Suburban (mid-single digit revenue growth).

Elevated Valuations Dampen Strong Fundamentals

Dr Lal PathLabs’ (Dr Lal) Q2FY25 revenue growth of 9.8% YoY was lower than our expectation, though its better EBITDA margin of 30.7% was a surprise.

Dr Lal PathLabs’ (Dr Lal) Q1FY25 result was in line with our expectations. Growth was driven by better uptick in Swasthfit (up 26.4% YoY) overall sample volume rose 9.3% YoY.

We met DLPL’s MD Dr. Om Manchanda to gauge competitive intensity and its strategy to boost volumes. Meeting KTAs are: 1) DLPL is increasingly witnessing the ‘bundling’ phenomenon as doctors are recommending multiple tests to ascertain accurate prognosis.

DLPL posted a robust quarter, with revenue growing 11% YoY on the back of
sample volume increasing 9% YoY and Swasthfit contributing 24% to the
topline.

Dr Lal’s Pathlabs’ Q1 volume growth at 2.5% was impacted to some extent due to seasonality. Favourable test mix and traction in Swasthfit improved realisation per patient by 8.5% to INR 789 and aided gross margin expansion of 181bps YoY.

Dr Lal Pathlabs’ (Dr Lal) Q2FY23 performance was a mixed bag with slower-than-
expected growth in non-covid patient volumes, but healthy improvement in margins.

Dr. Lal PathLabs Limited (DLPL) provides diagnostic and related healthcare tests and services in India and internationally. Company has 231 clinical laboratories, including National Reference Lab at Delhi and Regional...

With persistent focus of service parameters and timely turnarounds, DLPL was able to achieve robust growth in volume during the pandemic. Leveraging its dedicated network driven infrastructure and techenabled processes, we expect the company to be able to perform well in the expected third wave situation. Hence, we upgrade our rating on the...

unsustainable rise in volume of patients and samples (all time high) We reinitiate coverage on DLPL stock with Sell' rating, previously kept Under Review'. 1QFY22 earnings were higher than our estimates solely driven by additional volumes, due to large number of patients in the second wave. Business in core portfolio grew 15% YoY given 1) all collection centers and labs resumed operations much earlier than expected 2) high revenue...

Dr. Lal PathLabs Limited provides diagnostic and related healthcare tests and services in India and internationally. Company has 231 clinical laboratories, including National Reference Lab at Delhi and Regional...

Dr. Lal PathLabs Limited provides diagnostic and related healthcare tests and services in India and internationally. Company has 216 clinical laboratories, including National Reference Lab at Delhi and Regional...