Brokerages remain positive on Dr Lal PathLabs' growth prospects following its strong second-quarter performance, with management raising its FY27 revenue growth guidance to the high teens. Network expansion, improved test mix, preventive diagnostics, and growing contributions from specialised segments such as genomics and oncology are expected to support growth. However, brokerages differ on the stock's valuation attractiveness, with Goldman Sachs maintaining a Sell rating and Kotak downgrading its rating to Add, while Citi retained its Buy rating.
Dr Lal PathLabs Q2 Results: Key Highlights (Cons., YoY)
- Net profit increased 27.6% to Rs 192 crore from Rs 151 crore.
- Revenue rose 19.6% to Rs 874 crore from Rs 731 crore.
- Ebitda increased 25% to Rs 280 crore from Rs 224 crore.
- Ebitda margin improved to 32.1% from 30.7%.
- The board declared a second interim dividend of Rs 5 per share.
Also read: Dividend Alert: Dr Lal PathLabs Declares Dividend Of Rs 5; Q2 Net Profit Rises 28% YoY
Citi
- Maintains Buy Rating while raising Target price to Rs 2,380 from Rs 2,160
- Management targets high-teens revenue growth in FY27 and sustainable mid-teens organic growth.
- Network expansion and specialised diagnostics are expected to support sustained volume growth.
- Genomics, oncology, and preventive testing are expected to improve revenue mix and profitability.
Goldman Sachs
- Maintains Sell Rating but raises Target Price To Rs 1,750 From Rs 1,700
- Management raised FY27 revenue growth guidance to the high teens and Ebitda margin guidance to above 28%.
- Preventive diagnostics, improved test mix, and higher realisations are expected to support earnings growth.
- Goldman Sachs raised its FY27-FY29 estimates by up to 4%, but said expensive valuations limit the stock's attractiveness.
Kotak
- Downgrades to Add from Buy, while keeping the Target price unchanged at Rs 2,300
- Management raised FY27 revenue growth guidance to the high teens from the mid-teens.
- Network expansion, rural penetration, and a turnaround in Suburban are expected to support volume growth.
- Kotak expects a 17% adjusted EPS CAGR through FY29, supported by specialty diagnostics and genomics.
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