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Dr. Lal PathLabs Gets Higher Target Price After Robust Q1, Yet ICICI Securities Downgrades Rating — Here's Why

While the company has reported strong growth for the last two quarters, sustainability of the run-rate in Q2 FY27 could indicate a trend change, adds the brokerage.

Dr. Lal PathLabs Gets Higher Target Price After Robust Q1, Yet ICICI Securities Downgrades Rating — Here's Why
Dr. Lal's revenue grew 19.1% YoY to Rs 800 crore, led by better sample volumes.
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Dr. Lal Pathlabs Ltd.
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NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

According to the brokerage ICICI Securities, Dr Lal PathLabs Ltd.s Q1 FY27 performance was a beat on all fronts.

The brokerage believes that the benefits of network additions are now kicking in, with patient volumes growing a strong 8.2% YoY and sample volumes up 10.7%.

Higher contributions from specialised tests and a CGHS price revision (~2-3%) boosted a ~10% YoY increase in average revenue per patient.

While the company has reported strong growth for the last two quarters, sustainability of the run-rate in Q2 FY27 could indicate a trend change.

Management has upgraded FY27 revenue growth guidance to the mid-teens range, though the Ebitdea margin outlook is unchanged.

ICICI Securities has raised FY27/28E earnings per share by ~9/5% to factor in better growth and margins; downgrade to Hold with a higher target price of Rs 1,690 from Rs 1,460.

Click on the attachment to read the full report:

Isec Dr Lal Q1.pdf
VIEW DOCUMENT

ALSO READ: SBI Life Shares: ICICI Securities Maintains Bullish Stance, Sees 26% Upside After Strong Q1 Results — Check Target Price

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