Dr Lal PathLabs Ltd (NSE: LALPATHLAB) Q1 2026 Earnings Call dated Jul. 31, 2025
Corporate Participants:
Unidentified Speaker
Om Prakash Manchanda — Managing Director
Shankha Banerjee — Chief Executive Officer
Ved Prakash Goel — Group CFO and CEO, International Business
Nishid Solanki — Investor Relations
Arvind Lal — Executive Chairman
Analysts:
Unidentified Participant
Karthik Chellappa — Analyst
Anshul Agarwal — Analyst
Prakash Kapadia — Analyst
Surya Patra — Analyst
Karan Vora — Analyst
Pranaya Jain — Analyst
Aashita Jain — Analyst
Harshal Patil — Analyst
Yogesh Soni — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Dr. Lal Path Labs Q1FY26 earnings conference call. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference has been recorded. I now hand over the conference to Mr. Nishit Solanki from CDR India. Thank you. And over to you sir.
Nishid Solanki — Investor Relations
Thank you. Good afternoon everyone and welcome to Dr. Lal Patlab’s Q1FY26 earnings conference call. Today we are joined by senior members of the management team including Ordinary Brigadier Dr. Arvind Lal, Executive Chairman Mr. Shankar Banerjee, CEO and Mr. Ved Prakash Goyal Group CFO and CEO International Business. I would like to share a standard disclaimer. Some of the statements made on today’s conference call could be forward looking in nature and the actual results could vary from these forward looking statements. A detailed statement in this regard is available in the results presentation which has been circulated to you and also available on exchange websites.
I would now like to invite Dr. Lal to share his perspectives. Thank you. And over to you sir.
Arvind Lal — Executive Chairman
Thank you very much. Good afternoon ladies and gentlemen and welcome to our first quarter earnings call. I would first like to highlight the broader opportunity in healthcare and the role that we can play as a leading diagnostic brand. Healthcare in India continues to grow at a healthy pace characterized by digital transformation and shift towards tech driven and holistic healthy delivery. However, I would like to add that there is more than ample room for growth when it comes to hospitals alone. It is said that India has a shortfall of 2.4 million beds to meet global standards. This is getting at this with major hospital chains adding to capacity judiciously by upwards of 30%.
Still, FY27 central government flagship initiatives like Ayushman, Bharat and Heal in India are propping up public and private investment in the healthcare system. One can be assured that this kind of growth will translate into a higher requirement for quality diagnostic services going forward. On the tech side, we are witnessing increased integration of AI in healthcare services including diagnostics. It is estimated that by the end of 2025 the the Indian artificial intelligence healthcare market would have a size of US$1.6 billion. The impact of telemedicine and digital health records is being felt given enhanced access in rural and semi urban regions.
The role of digital and tech within our industry is growing where on the one hand it appears to be operational efficiency and on the other it enhances patient and clinical outcomes. Let us look at the other side. The prevalence of chronic and lifestyle diseases in India continues to expand. We are the topmost country with incidence of diabetes with 100 million patients afflicted. Rates of hypertension are also climbing with some surveys indicating that maybe 30% of adults having elevated blood pressure. Obesity is experiencing a surge in young adults and children given linkages to higher consumption of processed foods and and general inactivity.
And these trends are coming up in the rural settings as well as lifestyles undergo change over there. The only drawback for rural populations has been access to regular screening and specialist care. Delayed diagnosis is also an important exacerbating factor here, especially in underserved populations. Given this background, the role of diagnostics and management of these healthcare outcomes can cannot be overstated. As a national brand, we remain committed to providing quality diagnostic services to the country. Our operations are steadily spreading across hinterland markets where demand for such services is rising. This is especially so in Tier two and beyond.
We are building stronger presence in west and south to complement presence in the north and east. FY25 saw addition of 18 new labs to our network and and we expect to sustain a similar number in the present year too. Our patient service centers also saw strong increase to match this and again we expect this franchising trend to continue. On the tech side, we are making the right investments to strengthen operations and create scale with flexibility. Our journey will be marked by growth milestones as we seek to broaden the scope of services and geographic coverage. The model is scalable and we have the intent to grow it to meet unserved health care requirements.
With that I would like to hand over to Shankar to continue over to you shanku.
Shankha Banerjee — Chief Executive Officer
Thank you Dr. Lal and a very warm welcome to everyone. Let me share some insights into Dr. Lal Path Lab’s performance in the first quarter of fiscal year 2026. As evident, our results are a testament to the enduring strength of our business model and the disciplined execution of our dedicated teams across the nation. The new financial year began on a strong footing with 11.3% growth in revenue and 24.3% improvement in profit after tax. This was achieved by steady volume, momentum and a favorable test mix. Our sample volumes grew by 10.7% to 23.4 million while patient volumes increased by 5.3% to 7.6 million.
At an industry level, the competitive landscape continues to evolve. We have recently observed the entry of a new E commerce player into the diagnostics arena. This will add to the existing online competitors that have been in the industry for nearly a decade. The foray from hospitals and pharma companies into the diagnostic sector continues to help in speeding up the unorganized to organized shift for the industry. Strategically, we are expanding our capabilities in high complexity testing. We have launched 58 new tests in the quarter, strengthening the genomics portfolio and introduced component resolve diagnostics for allergy testing.
We are also supporting antimicrobial stewardship with the launch of an in house smart culture reporting algorithm for the right antibiotic recommendations for all types of culture reporting. We see a very strong future potential in high end and specialized testing. We are also seeing positive trends in bundle testing under swathsit which continues its strong growth trajectory. The bundle testing offer is being strengthened on the illness segment as well. Further, we have added new offerings in genomics, reproductive health and autoimmune disorders to bring sharper focus to these areas. On the operational front, our network continues to expand in line with our cluster based strategy, we are strengthening our leadership in core urban markets in north and east including Delhi and Seattle.
We are also deepening our presence further in tier 3 and 4 towns. We are maintaining our calibrated pricing strategy and continue to hold our prices. The gains in realization are driven by by premiumization of our offerings and driving a favorable test and geography mix. On the digital front, we are investing more in automation and digital systems to improve patient experience, enhance cybersecurity and drive operational efficiency. Our outlook is defined by three strategic pillars driving volume led growth through aggressive market expansion, achieving operational excellence via comprehensive digital transformation and steadfastly upholding our brand leadership to unwavering quality and widespread accessibility.
With that, I will now hand over the call to ved.
Ved Prakash Goel — Group CFO and CEO, International Business
Thank you Shanko Good afternoon everyone and a very warm welcome once again. Let me now walk you through the financial performance for the first quarter of FY26 revenue for Q1. FY26 stood at rupees 670 crore compared to rupees 602 crore in the same quarter last year reflecting a strong growth of 11.3%. Revenue per patient rose to rupees 880 up 5.7% from rupees 833 in Q1 last year driven by a favorable change in the test mix. Test per patient increased to 3.07 compared to 2.92 in the same period last year, highlighting continued traction in bundled and preventive test adoption.
Our SWARFS fit portfolio contributed 27% of revenue this quarter, up from 25% in the same period last year, underscoring its growing relevance in preventive healthcare. EBITDA for the quarter came in at rupees 192 crore versus rupees 170 crore in Q1FY25, a growth of 13.1% with a stable and healthy EBITDA margins of 28.7%. Profit before tax rose to rupees 181 crore from rupees 150 crore up 20.8% with a PBT margin of 27%. Profit after tax stood at rupees 134 crore compared to R108 crore in Q1FY25, delivering a robust 24.3% growth and maintaining a PAT margin of 20% earning per share for Q1FY26 came in at rupees 15.9, up 24.4% from rupees 12.8 in the corresponding quarter last year.
Our balance sheet continues to be strong and resilient with net cash and equivalents of rupees 1389 crore as of June 30, 2025. In recognition of this performance and to reward our shareholders, I am happy to share that the Board of Directors has approved an interim dividend of 60%, that is rupees 6 per share. These results reaffirm the strength of our business model, the effectiveness of our execution and our disciplined financial keyword chip. We are making strong progress across all strategic fronts, expanding in both core and emerging markets, scaling up our high end and specialized test portfolio and accelerating our digital transformation journey.
We remain confident in our ability to deliver sustainable, profitable growth while staying true to our purpose of delivering trusted diagnostics with care and precision. With this, I conclude my opening remarks and I would now request the moderator to open the forum for question and answer. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kartik Chilappa from Indus Capital Advisor Ltd. Please go ahead.
Karthik Chellappa
Yeah, thank you very much for the opportunity, sir, and congrats on the quarter. So I have three questions. The first one is on the volume growth for the quarter, which is very healthy. The commentary that we heard from a lot of consumer companies is there were a lot of unseasonal rains and erratic weather this quarter. So did our volume growth benefit from any of these unseasonal trends or is this like a very clean kind of unseasonal volume growth that we saw this quarter? That’s my first question.
Shankha Banerjee
Yeah. Hi Karthik, thanks for your question. So as of now in the first quarter numbers that are there, there isn’t too much of favorable impact because of the unseasonal rains. So it is more or less quite like for like compared to quarter one last year.
Karthik Chellappa
Excellent. The second question is if I were to look at our realizations this quarter, they haven’t grown much, probably even less than 1% ish or so. But despite that we have seen a very strong gross margin expansion both year on year and Q on Q. So is there anything specific on the cost front that we have done this quarter and is this kind of improvement something that we can sustain or are we hitting a normalized level of gross margin where we like to sustain it at an 80, 81% level?
Shankha Banerjee
Hi Karthik, this is Ved. So I think realization has gone up from 833 to 880 which is not 1%. I mean that is one. But you know there is no price increase as such in we have taken in this. This is all due to price test mix or maybe you know, high end test contribution which has contributed this realization. Margin specifically is, you know increased and. We got the benefit because of this was fit which has contributed 27% this time which is highest ever contribution in this quarter. So that is the reason we are getting some benefit out of this.
Karthik Chellappa
Excellent. Okay. Because the 1% I was referring to was the realization per test. But it’s okay. I think I got the message. Or so my last question sir is last quarter we indicated in our outlook for FY26 that we may see up to let’s say 100 basis points margin compression because we are reinvesting into our brand as well as lab infrastructure etc. This quarter margins have actually been quite strong. So should we see the impact of this margin compression on a lagged basis let’s say in the remaining quarters or was this quarter just. It just surprised us more than what we had anticipated.
Ved Prakash Goel
So again so you are right. You know, generally if you see first half we generally have higher margins because most of the investments we are getting into second half and that is where I don’t think these 28.7% margins are representative of the full year. Yes, we we have improved but let’s see how the remaining quarters go. But most of the investment will be in later quarter of the years.
Shankha Banerjee
But Karthik, just to add to that, I think there is, you know, internal view although we are recalibrating that, you know, the overall annual margin also could be slightly better than what we had projected at the beginning of the year.
Karthik Chellappa
Okay, that’s good to hear. Okay, that’s it from my side. Sir, wish you and the team all the very best for the remaining quarters. Thank you very much.
Shankha Banerjee
Thank you.
operator
Before we take the next question, we would like to remind participants you may press star and one to ask a question. The next question is from the line of Anshul Agarwal from mk. Please go ahead.
Anshul Agarwal
Hi. Thank you for the opportunity. Hope I’m audible.
operator
Yes.
Anshul Agarwal
Great. So my first question is on volume growth. Could you provide some color? Is this growth secular geographically? Is it some particular region which has led to the strong volume growth, patient volume growth or sample growth?
Shankha Banerjee
So you know, if you look at the overall number revenue at 11.3 and let’s say sample growth at 10, which is really very closely hugging the overall revenue. I think we are seeing similar trend of the sample growth being very close to our overall revenue growth across all our major geographies.
Anshul Agarwal
Okay. So core Delhi region is still growing at double digits and same for west.
Shankha Banerjee
So yes, Delhi has grown at double digits for this quarter as well. West. Like we said, you know that post our changeover in suburban of the whole IT stack. There has been a bit of a discontinuous impact in the market which we had mentioned would take maybe two quarters to recover. So we are still in, in that recovery phase. It is better than previous quarter. But I wouldn’t say we have still reached the level that we were two quarters back.
Anshul Agarwal
Got it. So we still have that lever if at all that comes in after two quarters. We still have that lever to improve our growth volume trajectory.
Shankha Banerjee
Yeah, that’s what it would seem that you know, we still have some headroom there to keep. Go back to our previous numbers there.
Anshul Agarwal
Sure. Great. Second question sir is on the, is on the current quarter which is so basically unseasonal monsoon. It’s a question on that Q2. We should see the beneficial impact of that. Would again that be correct.
Shankha Banerjee
So you see Q2 has traditionally been the high quarter specifically driven by, you know, fever and seasonality. So like if we are saying this year the similar thing was there last year. So I don’t think there is an expectation of, you know, this year hike being differential from others because there is still quite a lot of the quarter still to still remaining to play out. Right. So it has been a seasonal high always and we expect a seasonal high this year as well.
Anshul Agarwal
Great. That’s it from my end. Thank you so much.
Shankha Banerjee
Thank you.
operator
Thank you. The next question is from the line of Prakash Kapadia from Kapadia Financial Services. Please go ahead.
Prakash Kapadia
Yeah, thanks for the opportunity. Couple of questions from my end. You know in the last I think three odd years we’ve launched the Bangalore reference lab as well as the Mumbai reference lab. Now historically we’ve seen, you know, the sales growth is much higher in these markets when you know the reference lab is launched, be it east, be it north, so towards the latter half of the year would we expect west and you know, specifically south Bangalore side to you know, have revenue growth faster than you know, the company average growth? Because that’s what I think the trend shows and you know all the efforts which we typically put once the reference lab is there, they generally fructify.
And in addition to that from a revenue side, you know also I think last call you had alluded Shanko, the patient service centers we’ve invested. So if I see that last two, three to three years they are up by 40%. Pickup points are up by I think 17, 18%. So when does you know, the step up in revenue happen for us? Obviously we are growing better than industry but you know, still the step up in revenue, say 15% revenue growth. When do some of these things fructify as we move forward.
Shankha Banerjee
Right. Thanks Prakash. Very interesting questions. I think firstly on the reference lab question that you asked. So the reference lab setup is like basically we have a test menu which is significantly larger than let’s say a hub lab or a cluster lab. I mean that’s how the reference lab setup is. And the test menu, the higher test menu is typically a lot of, you know, not so frequent tested but it is something we outsource from quite a lot of clients. Now if you look at how this whole thing works is that you know, firstly clients in that same geography who we were maybe sending the samples to Delhi or somewhere else now start getting reports better and faster from the local lab or the local reference lab that we have and then you know, the conversion of the other clients for those high end tests will happen.
So it’s a slightly long term thing compared to you know, a satellite lab. So this is a slightly longer term horizon thing and, and it’s a bit of a slow burn. So to kind of directly link it only to opening a reference lab may not be appropriate because some of the other capacity of routine tests which get built in a brand strong market, the ability to leverage that is more quicker than in markets where brand strength is still under development. So I would say that the reference lab impact will be a slightly more longer term one.
Coming back to your second question which is on infrastructure and the front end, whether it’s the collections network or the pickups that we are opening now, as you also noted in our previous commentary, quite a bit of the infrastructure gets opened up in tier 3, tier 4 towns and some of the throughput per infrastructure may not be as high as the throughput for infrastructure in the larger urban town. So the just the number increase getting converted to a direct same kind of a number increase on revenue side may not always be appropriate. But yes, there is also a buildup in terms of revenue that happens over a period of time, but it’s a constant process.
So although we have stepped up some of these additions, there has always been addition happening every year at certain level and that’s a rolling benefit. So it is unlikely to show you a serious step jump going forward. But yeah, it will all contribute because finally the whole network Durben spoke model of the collection network and the lab and the test menu in that lab is what will help us grow the revenues in the future.
Prakash Kapadia
And this chunk of you said would happen over a period of time so that, that would take more time in you know, the tier three, four markets where you know, we, we are focusing since the last few years because where I think penetration habits awareness would, would take time. So what would be that inflection point, you know, which we have to monitor to see. We’ve, we’ve, you know, got there in terms of you know, the faster revenue growth which you know, seems to be missing as of now. Obviously it’s better than what you know, others or industry players are doing.
But how does that step up happen? So is it habit change? Is it awareness? It is per capita.
Shankha Banerjee
So you know, infrastructure is definitely one big contributory factor in terms of step up of revenue growth. But that is not the only factor which will determine there are other things that need to be executed. Like I said, you know, in terms of our test menu expansion, in terms of you know, speed to market, in terms of, you know, other, you know, the brand salience getting developed. So there are a lot of other factors to play. But yeah, infrastructure is the, is a, is a large contributory factor. So again, directly linking to Say that you know, in terms of numbers, 40% infrastructure means a 40% increase in revenue may not be the right correlation to build.
Prakash Kapadia
Sure, understood. One question for Veda, the amortization for suburban would would continue at 60 crore run rate and this should be over in the next four years, right? Is that understanding correct?
Ved Prakash Goel
So total is 50 crore Prakash for the year 12 and a half crore per quarter which will continue for some time.
Prakash Kapadia
Yeah, yeah. Thank you.
Shankha Banerjee
Thank you.
operator
Thank you. The next question is from the line of Surya P from Philip Capital. Please go ahead.
Surya Patra
Yes, thank you for this opportunity sir and congratulations for the great set of numbers. My first question is on the number of tests per person. If I see there is a kind of a very secular study secular rise that we are witnessing and possibly that is helping you deliver growth without taking even any price hike for the industry has been following. So although there is a kind of a consistent rise that we are seeing in the number of sample per patient or the test per patient. So is there any benchmark that one can think sidon number could be? Let’s say it is or based on your any matured sub segment or sub market the number of test population could go as high as 4, 5 or what number that one can kind of target and achieve and over what time period? If you can give some sense on that.
Shankha Banerjee
I think that’s a very interesting question. And you know at the outset let me say we don’t have a target that we are following on a test per patient basis. So but one thing that we definitely see is that there are a lot of factors which are contributing to this test per patient increase and some of those factors definitely in the near term would continue. So first and foremost is this whole swast fit, you know, acceptability and growth that we see, you know, with the and I think mentioned that sometime before as well we see traction in terms of, you know, more people wanting to use it not only in urban areas but we are also seeing, you know, some of our smaller town, the acceptability is rising.
We are also seeing some traction coming from the prescription channel. So that is one driver for you know, test per patient. And obviously there is another driver which is in terms of you know, prescribing habits of clinicians where there could be, you know, more test being prescribed on a single prescription now than previous. So yes, there are certain factors are contributing. We are not running after a target on this one. But you are right, this is definitely contributing to our growth and obviously helping us to maintain our price stance the way we have Taken.
Surya Patra
Sure, sure. My second point was, let’s say what is the growth over last year that. We have seen in terms of the. Number of test panels and whether it is fair to believe that with the rising trend of the test panels that we offer that will lead to a kind of a faster growth in either the source fit growth or the overall growth for us.
Shankha Banerjee
So if you look at, I assume by panels you are implying Swast freight. So swast fit portfolio Q1 this year has grown about 20, 22% over same quarter last year.
Surya Patra
Right.
Shankha Banerjee
And obviously that is ahead of our overall revenue growth and therefore contributes positively to our overall revenue growth as well as to our profitability mix.
Surya Patra
But it is not the number of panels that also contribute to the growth of SwastFix portfolio.
Shankha Banerjee
So I am not too sure what you mean by number of panels. We’ve got a, we’ve got some set, pre. Predefined source fit bundles. There are one or two new that we add bundles, but these are all predefined bundles.
Surya Patra
Okay. So currently what, 385 test panels that we are having. So that number would not be very frequently changing. Is that understanding right, sir?
Shankha Banerjee
Yeah, that understanding is right. Yes.
Surya Patra
Okay. Okay then my last point was a. So do you believe. The likely a significant boom in the usage of the GLP1 medication is likely to have a kind of a big potential boost to the overall test volume numbers for us because of our pan India presence that we are having?
Shankha Banerjee
No, no, I think that’s a very interesting question. We haven’t really maybe figured out the connection between GLP1 usage and diagnostic testing, a direct connection to that. But let us, you know, as a team, maybe we will look into this slightly more deeply and try and see if there is a direct connection that could be there between this and what impact it could possibly be.
Surya Patra
Sure, sir. Yeah. Thank you. Wish you all the best.
Shankha Banerjee
Thank you.
operator
Thank you. A reminder to the participants, if you wish to ask a question, you may press star and 1. The next question is from the line of Karan Vora from Goldman Sachs. Please go ahead.
Karan Vora
Yeah, thank you for taking my question. My first question is with respect to suburban. So while, you know, we have been one of the best run diagnostic companies, you know, for a long time now for suburban. We have not able to, you know, work it out like probably the way would have wanted when we had acquired the asset. So any, any, you know, color, if you could provide on, you know, what, what are the things where we have struggled or what, what went wrong and what were the learnings from IT would help. And also a subpart to that is this IT restack which we are doing on Suburban.
Any particular reason we are doing it right now versus say do it when we acquired or immediately after we acquired it. So that’s my first question.
Shankha Banerjee
So I think this Suburban question has been asked quite a few times in the past. And you know, there have been, I think on the investor call we’ve tried to answer that quite a few times. But if you reflect back and see, you know, what are the challenges. I think we said that there was one big change that we had wanted to make with the collection network which was there, you know, when the COVID tests went down, lot of our existing collection network within Suburban actually started becoming unviable and closing the franchise part. And then, you know, we also wanted to change the whole structure from our own collection network to a franchise collection network model.
So that changeover I think took longer specifically because of the slowdown of the existing franchise network which happened post the COVID reduction. So I think that was obviously one core reason. I think the other thing is that starting itself we said that there are quite a few parts of the business that we felt were non strategic and non core which we started deemphasizing and that obviously went on a slow decline. And those kind of non core geographies as well as non core business lines kind of, you know, were also therefore, you know, on the top line side, one would not see the benefit.
Although internally there would be segments that we wanted to grow. Were starting to see those results. Coming back to the point on the IT stack changeover. So you know, we had done quite a lot of work, you know, we have to prepare the teams there were. So the operations part had to be aligned to a certain level before the IT stack changeover could be done. I think the acceptability within the system, the team as well as the preparation that would have gone into it and there was time, we felt that now is the right time for us to really start looking at more backend synergies.
And that’s why the timing was chosen to do the IT stack changeover to align fully to the Lal Path Lab IT stack, which we did in February this year.
Karan Vora
Got it. And so is this the last step, you know, post which all the, all the measures like conversion of franchisee, a conversion of own centers to franchisee centers and all the other things are done and we should start seeing recovery. Would that be a fair understanding? Like maybe after a quarter or two?
Shankha Banerjee
So I wouldn’t say all is done because there are still certain geographies where we are actually now even transitioned the business to Lal Path Labs system. So there will still be some transition which will continue because we don’t want to do everything in one shot. It really doesn’t work in an ongoing business. We have to obviously handle it carefully.
Karan Vora
Got it. And my second question is with respect to the inorganic opportunities and the cash allocation which we have in the balance sheet. So while we have always mentioned that we want to explore for assets in the south and in untapped geographies or for inorganic acquisition, but just to get a sense on what are the challenges when you go and approach the labs. So first of all are there enough labs for you to you know, be target like potential targets and then if they are, then what are the valuations, sorry, what are the issues you are facing other than the valuation part which might always probably be expensive in India.
So any color on that would be helpful.
Ved Prakash Goel
So yeah Karan, this is Ved. I think you know we already stated that inorganics is a idea and especially in south right now there is nothing which is we can you know share right now but the exercise own and in terms of you know, what, what should be the value, what is the strategy and all I think the foremost thing we want a platform where we can ride and you know, make that platform big. So we don’t want to just acquire for the sake of adding turnover but wherever we feel there is a strategic fit into our whole long term strategy, I think that is where we require.
But yes, there are opportunities at the right time, maybe it will come.
Karan Vora
Got it. Thank you.
Shankha Banerjee
Thank you.
operator
Thank you. The next question is from the line of Pranaya Jain from Banyan Tree Advisors. Please go ahead.
Pranaya Jain
Hi, thank you for taking my question. Am I audible?
operator
Yes.
Pranaya Jain
Yeah. So actually I wanted to understand our gross margin, our gross margins outlook. So when we look at our gross margins over the last few years we’ve been constantly expanding as we scale up further. Shouldn’t gross margins go up even beyond say 80 to 83% over a 34 year horizon?
Shankha Banerjee
So I think you know, your observation is right. And the gross margin is increasing. You know, obviously a couple of things contributing. One is I alluded on my opening remarks because of you know, contribution of Swat street where the test mix is very different. Second is scale obviously and you know, third geography Miss also. So I don’t think, you know, I can’t comment on where it can go but our, our you know, efforts is always to create efficiency where we can, you know, still get some benefit whether it is volume, whether it is test mix and all.
But right now it is hovering around 79, 80% and I would say in near term I don’t think it will go substantially from here. So that is where you should consider that it should be around at the current levels.
Pranaya Jain
Got it. And my second question is in our non core geographies, what are some of the strategic initiatives that we have taken to fasten organic growth?
Shankha Banerjee
So non core geographies, obviously there is a slightly slower turnaround in terms of building the organic business and it will follow quite a simple mechanism. Obviously building the testing infrastructure, collection network and then put feet on the ground who can then meet up with the prescriber community and be able to promote our services and how we can give good quality services compared to maybe a lot of other local labs and maybe some of the smaller regional labs that may be operating in that geography.
Pranaya Jain
Thank you. That’s it from my side.
Shankha Banerjee
Thank you.
operator
Thank you. The next question is from the line of Yogesh insert. Please go ahead.
Yogesh Soni
Yeah, thanks for the opportunity. My first question is on the Delhi India region we have seen, we are doing consistently double digit growth for last couple of quarters. I wanted to understand, I mean what has changed in the city region, the market competitiveness has changed or whether we have made certain efforts that are resulting in double digit growth.
Shankha Banerjee
So yeah, I think firstly there is a slightly benign market competitiveness in terms of the online players and pricing that is a contributing factor. But over and above that there are quite a lot of service enhancement initiatives that we have taken in the market. Whether it’s on logistics that you know, test menu people on ground, so you know, a lot of those and even looking at our channel partners and you know, kind of motivating the channel partners performance etc. So a lot of those initiatives have gone into play which is resulting in what we are seeing as you know, the consistent double digit growth in ncr.
Yogesh Soni
Okay, that helps to understand. Another question is on the genomics. I just wanted to discuss about the genomics market. What kind of market size is it now and the kind of growth rate that we are seeing in the market also. I mean if you could let us know what is the overall contribution of genomics in our revenues and how we can see genomics becoming an affordable option in the coming time.
Shankha Banerjee
So do you like our overall industry similarly? I, I think you know having a subsector market sizing is something which is not available at an industry level. So I may not be able to comment on the market size currently. But one thing which is sure is that genomics as a segment is definitely, you know, getting more acceptability among the clinicians and is also seen as a way to kind of, you know, pursue or go ahead of the whole personalized care and personalized medicine which is evolving, you know, globally and also in India also. I think the whole cancer or the onco area that is, you know, getting more focus in our country also uses genomic testing.
So we believe that in the future the requirement for genomic testing is going to grow from wherever it is today. And we definitely would like to get a sizable share of that growth going forward. And we are therefore investing in that basis. As of now, I don’t think I’m in a position to share sectoral breakup of what percentage of our business is genomics.
Yogesh Soni
Okay, that helps. Just to get a further clarity if you will be able to provide on the affordability part. I mean, how will that be achieved?
Shankha Banerjee
I think affordability of genomic testing is improving day by day. You know, it is a combination of volume and as well as the type of testing equipment that one is going to use and you know, technology improvement that we are seeing from time to time. So affordability and the testing costs are getting competitive. So I think if that trend continues the way it is, the acceptability, user accessibility will grow even further.
Yogesh Soni
Okay, that’s helpful. Thank you for your answers.
Shankha Banerjee
Thank you.
operator
Thank you. A gentle reminder before we take the next question participants, to ask a question, please press star and 1. The next question is from the line of Ashita Jain from Nuvama. Please go ahead.
Aashita Jain
Good day everyone. So my first question is on your West India strategy. I understand you are in the last leg of integration, but with the dual branch that we have now with Suburban and Octalan, how should we see your West India region performing going forward? Could you give us more color around your organic expansion? Maybe focus cities or how are you dividing the local areas and also the white spaces that you’re seeing in the West India region? That’s my first question.
Shankha Banerjee
Right. So West India for us is, you know, Maharashtra, MPC and Gujarat and Goa. Right. That’s what West India is. And amongst this whole wide geographic array, the dual brand strategy is operational in Mumbai, Pune and Goa primarily. So the rest of the parts of West India is still fully Lal Path Lab organic and a few inorganic acquisitions that we had done in the past. So in terms of our strategy, you know, the, the core medical hubs are Mumbai and Pune and that is the area that we really want to build a strong base in, I mean the other parts of West India.
In mpcg, MP and Chhattisgarh, there is quite a lot of organic Lal Pas lab presence and quite a lot of those markets we are the number one brand and we continue to expand our footprint as well as our business there. Whereas in markets like Maharashtra and Gujarat, we are not the leaders and could be quite far behind some of the incumbent brands there. So those are the geographies that we are trying to build for the long term and working on that to see how we can now grow these two brands organically in Mumbai and Pune.
Aashita Jain
Is it fair to assume that the majority of the expansion would be franchisee collection centers going forward rather than the lab additions in these markets? Or how should we see it from here? Say three years or five years down the line?
Shankha Banerjee
In a three to five year scenario, definitely we’ll have lab additions as well. So it is not that lab additions are not going to happen. But you know, since we are first focusing on a very compact geography of Mumbai Pune, I think the lab infrastructure for Mumbai Pune is already established. So in these markets it could translate into more of collection network expansion. But when you look at west as a whole, which includes other parts of Maharashtra, Gujarat and even Maharashtra and Gujarat, there is also a possibility of adding lab infrastructure which we continue to do on a steady basis.
Aashita Jain
Understood, that’s helpful. My second question is on the radiology side. I think the last earnings call you made a remark that radiology is also on the table. So how should we think radiology is a growth lever for you? And also one of your competitors have also started ECG at home and they’re doing a couple of other basic radiology as well as advanced. So how should we see it for Dr. Lal going forward?
Shankha Banerjee
So radiology has a, you know, a gamut of tests. So you know, there is something called basic radiology which would be X ray, ECG, ultrasound, TMT test, etc. And then there is high end radiology which would be ct, mri, maybe even let’s say a PET CT scan, scanners and things like that. So basic radiology, you know, we do, in some of our urban markets we do basic radiology, although it’s still very low contributor. So but we had, we were running some pilots which we continue to do on high end radiology and we are still working on a plan as to how we will expand into high end radiology, which is CT mri.
That business plan is still not fully frozen, but yeah, that’s an Opportunity that we are aware and at the appropriate time we will look at maybe that business model as well as a part of our growth strategy.
Aashita Jain
Sure, that’s helpful. And last couple of quick bookkeeping questions. What was the growth in the suburban this quarter as well as the margin for this quarter.
Ved Prakash Goel
So Ashita, as we have merged now this, you know, so separately it is not suburban but west as a whole, which we have already answered. Shankar has given that due to this IT stack change. Now maybe going forward it will, it will come back what we used to do two, two quarters earlier. But right now this quarter also is impacted because of this changeover. And obviously margins also is now whole as a company. It’s not separately but this this quarter and the last quarter was impacted due to this IT stake change.
Aashita Jain
Okay. And this quarter your tax rate is 26%. So is there been any change or 26% is something we should building for the full year and the coming years as well.
Ved Prakash Goel
Yeah, so 25, 26% is a normal tax rate if you are comparing with the last year. If you see there was some deferred tax reversal because of, you know, suburban, you know, and so that was the one time impact we have explained last time. But going forward I think this is the standard rate. 25, 26% is the standard standard rate.
Aashita Jain
Understood. And I think last year the guidance you said you are expecting better than the earlier guidance of 27% EBITDA margin. But is there, are you also revising up your growth guidance, revenue of 11 to 12%.
Shankha Banerjee
No, on the revenue side we, we will stay with our 11 to 12% revenue growth projection.
Aashita Jain
Okay. Okay, that’s helpful. Thank you so much. That’s all from my side.
Shankha Banerjee
Thank you.
operator
Thank you. The next question is from the line of Herschel Patil from Mirai Asset Capital Market. Please go ahead.
Harshal Patil
Thank you sir. And thanks for the opportunity. So most of the questions are answered. Just need one understanding from you. So while you’ve alluded to quite a lot of reasons for a very good volume growth that we’ve achieved, sir, I just also wanted to kind of have your qualitative views on. We’re seeing a good volume growth. Also the competitive intensity, as you kind of rightly said, is benign. So sir, in this whole thing, how do you see the MIC from unorganized to organized moving around across markets? Maybe would that have that picked up or probably, you know, how should we see that going ahead just in the light of the volume growth that we’ve got.
Shankha Banerjee
So you know, the caveat always is that we don’t have a very clear industry level number. So all that we are seeing is obviously some extrapolations from what we observe from the other listed players and what kind of results they are declaring and some of the maybe quasi listed players and what kind of results they are declaring. I think at an overall level, I think one can see that the listed quasi listed space definitely seeing a slightly better revenue volume growth. And to that extent one can imagine that maybe the shift towards organized is getting slightly more accelerated.
But these are all directional statements. I think the actual percentages or rate of change, you know, contributions, etc. Are very difficult to pinpoint.
Harshal Patil
Okay, that’s helpful, sir. Thank you. Thank you. And all the best.
Shankha Banerjee
Thank you.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments.
Shankha Banerjee
Thank you everyone for joining us today. We truly appreciate your continued trust and support. We hope we have been able to address all your questions. Please don’t hesitate to reach out to. Us if you have any further queries. Thank you once again and my best wishes to all of you.
Shankha Banerjee
Thank you.
Ved Prakash Goel
Thank you.
operator
Thank you on behalf of that. This concludes this conference. Thank you for joining us. And now you may disconnect your lines.