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Informist, Wednesday, Aug 7, 2024

--Dr Lal PathLabs Apr-Jun consol revenue 6.02 bln rupees vs 5.41 bln 
--Dr Lal PathLabs Apr-Jun consol net profit 1.06 bln rupees vs 826 mln 
--Analysts saw Dr Lal PathLabs Apr-Jun consol PAT 959.2 mln rupees 
--Dr Lal PathLabs Apr-Jun consol net profit 1.06 bln rupees 

--Dr Lal PathLabs to pay 6 rupees/share interim dividend 

By Apoorva Choubey 

MUMBAI – Dr Lal PathLabs Ltd exceeded the Street's expectations for its Apr-Jun earnings as higher revenue contribution from sales of the "SwasthFit" brand aided an expansion in profitability. India's largest diagnostics company reported a 29% on-year jump in consolidated net profit to 1.06 bln rupees. Analysts had estimated the bottomline to be 959.2 mln rupees.

The better-than-expected net profit propelled the company's shares to a two-and-a-half-year high of 3,360 rupees. The stock ended 3.4% higher at 3,274.60 rupees on the National Stock Exchange today. 

However, the pace of the company's profit growth in the June quarter was sharply lower than the 43-54% runrate seen over the past four quarters. Sequentially, the net profit for Apr-Jun rose 25.9%.    

During Apr-Jun, Dr Lal PathLabs posted an 11.3% rise in consolidated revenue from operations to 6.02 bln rupees, slightly higher than estimates. The company sustained the trend of low double-digit sales growth for the fourth quarter in a row. When compared quarter-on-quarter, the revenue for Apr-Jun was 10.4% higher.

The company's operating profit rose 16.2% on year to 1.7 bln rupees during the June quarter. Operating margin, defined as earnings before interest, tax, depreciation and amortisation margin, expanded to 28.2% from 27% a year ago. 

Analysts were divided on how the company's operating margins could fare in the June quarter. Network expansion costs and competitive pricing were seen offsetting benefits from bundling of offerings and a better mix, according to analysts.

Dr Lal PathLabs offers bundled services in the illness and wellness portfolios under its brand "SwasthFit", which is deemed to be high-margin in nature. The brand's contribution to total revenues rose to 25% during Apr-Jun from 22% a year ago, the company said in its investor presentation.  

Much of the growth is likely to have been driven by higher testing sample volumes, Nuvama Institutional Equities had said in a preview report. The company did not provide details on volumes or testing mix in its investor presentation and press release.

Dr Lal PathLabs' 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, Kotak Institutional Equities had said. The non-COVID business of Dr Lal Pathlabs may post growth of 12% for Apr-Jun, it had said.

For Apr-Jun, the company's other income jumped 43% on year to 206 mln rupees. Total expenditure, including finance cost, increased 8% from a year ago to 4.73 bln rupees. Finance cost declined to 60 mln rupees from 80 mln rupees a year ago.

Dr Lal PathLabs' tax outgo for the June quarter jumped 24% on year to 421 mln rupees. The company's board has recommended an interim dividend of 6 rupees a share.  End

Edited by Tanima Banerjee

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