Target: ₹3,350
CMP: ₹3,194.75
Dr Lal Path Labs delivered a beat on margins at 28.2 per cent. However, revenue was in-line while EBITDA/PAT delivered a slight beat by 4/5 per cent respectively. Overall revenue increased 11 per cent y-o-y to ₹600 crore with sample/patients volume growing 9/4 per cent y-o-y. The revenue per sample stood at ₹287 (+2.4 per cent y-o-y). This is primarily driven change in test mix as DLPL has not taken price hike. Swasthfit revenue contribution increased to 25 per cent in Q1-FY25 (vs 22/24 per cent in Q1-FY24/Q4-FY24).
EBITDA increased 16 per cent y-o-y/17 per cent q-o-q to ₹170 crore. Interestingly, EBITDA margin expanded 120 bps y-o-y/170 bps q-oq to 28.2 per cent. EBITDA per sample was ₹81 (+6 per cent y-o-y/6 per cent q-o-q). Adj. PAT was ₹100 crore (+29 per cent y-o-y/26 per cent q-o-q). Management expects growth to be volume-led complemented by change in test mix. Also, it continues to not take price-hike over the next 3-4 quarters. Moreover, it guided for EBITDA margins to be 26-27 per cent over the next 2-3 years.
We have reduced our earnings estimates for FY25 by 5 per cent and increased for FY26 by 2 per cent on the back of penetration into Tier-3/4 towns to drive volumes, Suburban becoming a dominant player in Mumbai market, Increasing contribution from Swasthfit offset by and higher opex.