📢 5 STEPS TOWARDS WEALTH 🚀 The Indian Stock Market Way
Lal PathLabs Ltd: CMP: 3053 | LONG TERM GR: 14% | CY GR: 11% | Q2_FY_25 RESULT UPDATE
(After long 2 years again on the expansion mode with sales growth back to normal)
Dr Lal PathLabs Limited is one of India’s leading consumer healthcare brands in diagnostic services. 75 years of experience in the field of diagnostics. Dr. Lal PathLabs Limited is one of India’s leading consumer healthcare brand in diagnostic services. It has an integrated nationwide network, where patients and healthcare providers are offered a broad range of diagnostic and related healthcare tests and services for use in core testing, patient diagnosis and the prevention, monitoring and treatment of disease and other health conditions. The services of DLPL are aimed at individual patients, hospitals and other healthcare providers and corporates. The catalogue of services includes 343 test panels, 3,075 pathology tests and 1,439 radiology and cardiology tests as on March 31, 2024. As on March 31, 2024, DLPL’s has 280 clinical labs (including National Reference Lab at Delhi & Regional Reference Lab at Kolkata, Bangalore & Mumbai), 5,762 Patient Service Centers (PSCs) and 11,619 Pick-up Points (PUPs). In FY23 & FY24, DLPL collected and processed approximately 72 million samples and 78 million samples from 26.9 million and 27.6 million patients, respectively.
During the year 2012 their Labs were 125 generating revenues of around 320 Cr and Profits of 41 Cr. They came with the IPO in FY_2016 and at that time labs were 172 with revenue of 786 Cr and profits of 126. They were already emerging as the National player from the regional and were almost debt free. Considering good sales growth and consistent profits we have recommended you as the wealth creator from this sector where we can expect good growth of 15% CAGR along with high consistent profits. Till Pre_Covid era year FY_2020 we saw them growing their labs to 216 making the revenue of 1330 Cr & Profits of 228 Cr. It clearly Shows 4X sales growth in 8 Years. During the CovidEra considering strong demands, they aggressively added labs from 216 to 277 which is 61 Labs in just the span of 2 years. The Post Covid healthcare sector underperformed overall due to low demand. Last fy_2023 is the real picture post Covid where we saw damage in Covid related sales. Those sectors which were covid affected are actually performing this year due to low base during covid. Opposite to this those sectors which were covid benefited and were doing well during covid times are actually affected with low growth due to high base in Covid era. The divergence we can see in both the types of sectors.
Q2 FY25 Detailed Performance Report 🧬
1. Q2 FY25 Performance Overview 🩺
Revenue: ₹660 crore
YoY Growth: 9.8%
EBITDA: ₹202 crore
YoY Growth: 13.9%
PAT (Profit After Tax): ₹131 crore
YoY Growth: 18.1%
Samples Processed: 23 million (Up by 8.6% YoY)
Patients Served: 7.8 million (Up by 3.9% YoY)
Key Observations:
The quarter witnessed robust revenue growth driven by higher patient volume and increased sample processing.
SwasthFit Portfolio: Continued to be a significant contributor, with 24% of the total revenue in Q2 FY25.
2. Financials 💼
H1 FY25 Revenue: ₹1,262 crore, a YoY growth of 10.5%.
Operating Expenditure: ₹458 crore in Q2 FY25.
EBITDA Margins:
Q2 FY25: 30.7%
H1 FY25: 29.5%
EBIT (Earnings Before Interest and Taxes): ₹189 crore (EBIT Margin: 28.6% in Q2 FY25)
PAT Margins:
Q2 FY25: 19.8%
H1 FY25: 18.9%
Key Observations:
EBITDA and PAT margins saw significant improvement, indicating better operational efficiency and cost optimization.
Finance costs were reduced, improving profitability.
3. Key Performance Highlights 📈
Highest Ever Quarterly Revenue: ₹660 crore in Q2 FY25, up by 9.8% YoY.
Sample Growth: 8.6% YoY growth in Q2 FY25.
Patient Volume: Increased by 3.9% in Q2 FY25 compared to Q2 FY24.
H1 FY25 Revenue Growth: 10.5% YoY, with a continued positive trajectory.
Revenue Per Patient: ₹844 in Q2 FY25, up by 5.7% YoY.
Key Drivers:
Strategic cost optimization and operational leverage have contributed to robust profitability.
Continued investments in technology and infrastructure have helped sustain growth.
4. Segment-wise Sales Data and Growth 🧪
Sample Growth:
Q2 FY25: 8.6% YoY increase.
H1 FY25: 9.1% YoY increase.
Patient Volume Growth:
Q2 FY25: 3.9% YoY growth.
H1 FY25: 4.8% YoY growth.
Key Observations:
The diagnostic services market continues to expand, with higher volumes of both patient visits and samples processed.
Key Expansion Plans:
Continued focus on expanding in Tier 3 and Tier 4 towns.
Plans to open 15-20 new labs and add around 800 collection centers by FY25.
Industry Outlook 🌐
Diagnostics Sector Growth:
The sector continues to grow due to increasing awareness of preventive healthcare and rising demand for diagnostic services.
Key Industry Drivers:
Government initiatives such as Ayushman Bharat and technological advancements like digital health records and AI-based diagnostic tools are significant contributors to the sector's growth.
Peer Group Comparison 📊
To give a comprehensive comparison of Dr. Lal PathLabs' performance in Q2 FY25, here is a breakdown of Sales, Profit, EBITDA, and Store Count of some of its major peers in the diagnostics industry:
1. Dr. Lal PathLabs (Q2 FY25) 🧬
Revenue: ₹660 crore
EBITDA: ₹202 crore
Profit (PAT): ₹131 crore
EBITDA Margin: 30.7%
Store Count:
280 labs
5,762 Patient Service Centers (PSCs)
11,619 Pick-up Points (PUPs)
2. Metropolis Healthcare 🏥
Revenue: ₹320 crore (estimated for Q2 FY25)
EBITDA: ₹90 crore (estimated)
Profit (PAT): ₹50 crore (estimated)
EBITDA Margin: 28%
Store Count:
173 labs
3,400 collection centers
3. Thyrocare Technologies 🧪
Revenue: ₹170 crore (estimated for Q2 FY25)
EBITDA: ₹65 crore (estimated)
Profit (PAT): ₹40 crore (estimated)
EBITDA Margin: 38%
Store Count:
125 labs
3,500 collection centers
4. Vijaya Diagnostics 💼
Revenue: ₹150 crore (estimated for Q2 FY25)
EBITDA: ₹45 crore (estimated)
Profit (PAT): ₹30 crore (estimated)
EBITDA Margin: 30%
Store Count:
105 labs
1,900 collection centers
5. Suburban Diagnostics (Part of Dr. Lal PathLabs) 🔬
Revenue: ₹100 crore (Q2 FY25, estimated after acquisition by Dr. Lal PathLabs)
EBITDA: ₹20 crore
EBITDA Margin: 20%
Store Count:
60+ labs
1,000+ collection centers
Analysis:
Dr. Lal PathLabs leads the market with its high revenue and store count, which contributes to its strong market presence and accessibility across India, especially in Tier 3 and Tier 4 cities.
Metropolis Healthcare and Thyrocare Technologies continue to show strong EBITDA margins, though their overall revenue and store count are significantly lower than Dr. Lal PathLabs.
Vijaya Diagnostics focuses more on the southern market and is expanding steadily, though its store count is less compared to its peers.
Suburban Diagnostics, now part of Dr. Lal PathLabs, has been growing rapidly, contributing to its parent company's increased market presence, particularly in Western India.
This peer comparison provides a clear view of where Dr. Lal PathLabs stands in relation to its competitors in terms of sales, profit, EBITDA, and store presence.
Near term Outlook: We may see back the double digit growth of 12% and Profits of 17% this year. All those holding for long can add more during current corrections considering improvement in sales and profits near 2475 while we may see the recovery back towards 3822 this year itself.
We may again see strong 15% sales growth in the coming decade. High consistent profitability can be expected here along with consistent dividend earnings. This can help Lal path reach sales of the landmark 5000 Cr plus till 2030. A multiyear rally along with consistent profits should be seen in coming years.
Disclosure: This document is not prepared for any recommendation; this is prepared for educational purposes.
