Dr Lal PathLabs Guides For Pre-Covid Margin Levels In FY24
The company’s margin dipped after the pandemic-aided as competition increased.
Dr Lal PathLabs Ltd.'s Chief Executive Officer Bharath Uppiliappan expects margin to recover to pre-Covid levels in fiscal 2024, even as the company surpassed its guidance in the first quarter.
The company’s margin dipped after the pandemic-aided boost amid increased competition and margin sustainability, Uppiliappan told BQ Prime.
The company clocked in a margin of 27% in Q1 of this fiscal, ahead of its own guidance. It compares with 23.4% last year, and exceeds street estimates that had estimated the number at 24.7%.
Dr Lal PathLabs Q1 FY24 Highlights (YoY)
After-tax profit rose 43% to Rs 83 crore, against an estimate of Rs 73 crore.
Revenue expanded 8% to Rs 541 crore, as compared with the estimate of Rs 548 crore.
Ebitda was up 24% to Rs 146 crore versus Rs 135 crore.
According to Uppiliappan, the margin growth was led by material management, digital initiatives, and managing cost lines. The company is investing a lot in business, advertising, and research work to meet its margin target, he said.
On the revenue front, Uppiliappan guided for pre-Covid revenue levels, which were in double digits.
The non-Covid revenue grew 10% aided by the company’s SwasthFit bundled testing services portfolio—a super-specialty portfolio—that includes genomics and autoimmunity testing, he said. It has segmented routine tests into multiple components to make them medically relevant, differentiating themselves.
SwasthFit currently contributes 23% towards the company’s revenue, which is expected to be around Rs 500 crore for the full year. For the next leg of growth, he expects bundled testing services to drive growth and that will have a higher share in the product mix.
"We will add newer components to the SwasthFit or bundle test portfolio," he said.
While 3% of the company’s revenue growth came from price hikes this quarter, it intends to increase volume to maintain 10%-11% revenue growth.
