Earnings Outlook
Higher volumes to boost Dr Lal Pathlabs PAT, sales
This story was originally published at 11:38 IST on 1 August 2024
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By Apoorva Choubey
MUMBAI – Dr Lal Pathlabs Ltd, India's largest diagnostics company, is expected to sustain the trend of low double-digit growth in sales for the fourth quarter in a row. However, the pace of the company's on-year profit growth may shrink sharply to mid-teens from the 43-54% band seen over the past four quarters.
For Apr-Jun, Dr Lal Pathlabs' consolidated net profit is likely to increase 16% on year to 959.20 mln rupees, showed the average of the estimates given by five brokerage houses. The lowest estimate for the bottomline is 929 mln rupees and the highest is 991 mln rupees.
The Delhi-based company's consolidated net sales are seen rising 11% from a year ago to 6 bln rupees for Apr-Jun, the estimates showed. Sequentially, the net sales are seen 10% higher while the net profit may rise 13.5%.
Much of the growth in sales is likely to have been driven by higher testing sample volumes, said Nuvama Institutional Equities in a preview report. The benefit of higher realisations, due to a better test mix, is seen limited, it said.
The company's diagnostic services related to COVID-19 may clock revenue of 85 mln rupees during the June quarter, lower than sales of 128 mln rupees and 108 mln rupees in Apr-Jun last year and Jan-Mar, respectively, said Kotak Institutional Equities. The non-COVID business of Dr Lal Pathlabs may post growth of 12% for Apr-Jun, it said.
Analysts are divided on how the company's operating margins could fare in the June quarter. Network expansion costs and competitive pricing are seen offsetting benefits from bundling of offerings and a better mix, according to analysts. The company had reported earnings before interest, tax, depreciation and amortisation of 27% in the year-ago period.
"Footfalls are likely to remain muted, with growth of mid-single digits, as competition in Delhi-NCR region limits market share gains," said brokerage Emkay Global Financial Services. It expects Dr Lal Pathlabs to keep bundling offerings in the illness and wellness portfolios under its brand 'Swasthfit'.
Dr Lal Pathlabs will detail earnings for the June quarter on Wednesday. At 1031 IST, its shares were up 1% at 3,114.55 rupees on the National Stock Exchange.
Following are the Apr-Jun earnings estimates for Dr Lal Pathlabs from five brokerage houses, in million rupees:
| Brokerage firm | Net sales | Net profit | EBITDA |
| Emkay Global Financial Services Ltd | 5,958.00 | 929.00 | 1,609.00 |
| HDFC Securities Ltd | 6,043.00 | 979.00 | 1,601.00 |
| Kotak Institutional Equities | 6,006.00 | 935.00 | 1,654.00 |
| Nuvama Wealth Management Ltd | 6,021.00 | 962.00 | 1,613.00 |
| YES Securities (India) Ltd | 5,991.00 | 991.00 | 1,651.00 |
| Average | 6,003.80 | 959.20 | 1,625.60 |
End
Edited by Avishek Dutta
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