Dr Lal PathLabs Ltd (NSE: LALPATHLAB) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Unidentified Speaker
Arvind Lal — Honorary Brigadier
Shankha Banerjee — Chief Executive Officer
Ved Goel — Chief Financial Officer
Analysts:
Unidentified Participant
Nishit Solanki — Analyst
Prakash Kapadia — Analyst
Vivek Agrawal — Analyst
Anshul Agrawal — Analyst
Raman KV — Analyst
Bino Pathiparampil — Analyst
Saion Mukherjee — Analyst
Shyam Srinivasan — Analyst
Surya Narayan Patra — Analyst
Vamsi Hota — Analyst
Presentation:
operator
Sa. Foreign. Ladies and gentlemen, good day and welcome to the Dr. Lal Patlabs Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchtone phone. I now hand the conference over to Mr. Nishit Solanki from CDR India. Thank you and over to you sir.
Nishit Solanki — Analyst
Thank you. Good afternoon everyone and welcome to Dr. Lal Pat Labs Q3FY26 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. Ve Prakash Kuroi 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 Scopexion’s website.
I would now like to invite Dr. Lal to share his perspectives. Thank you and over to you sir.
Arvind Lal — Honorary Brigadier
Thank you Nitesh and good afternoon everyone and thank you for joining us for the third quarter and nine month earning call for fiscal 2026. Healthcare in India is undergoing a profound transformation. We are witnessing a steady rise in lifestyle related and chronic diseases, an aging population with evolving care needs and a growing awareness among consumers about the importance of early detection and preventive health. These shifts are redefining diagnostics from being episodic and illness driven to becoming an essential continuous part of long term health management. At the same time, access to high quality diagnostics remains uneven across the country.
Reinforcing the relevance of organized technology enabled players who can deliver reliable and standardized service at scale. This is where our purpose at Dr. Lal Path Labs remains deeply aligned. We are committed to building an accessible, dependable and clinically rigorous diagnostics ecosystem for every Indian. This quarter we made meaningful progress on several strategic priorities. First one was launch of Sovaka, our personalized preventive healthcare platform. A major milestone in this direction was the launch of Suvaka. Operating under the philosophy of science behind wellness, Suvaka represents a strategic pivot from traditional disease detection towards science led disease prevention.
By integrating high end diagnostics and AI supported imaging with curated programs, we are directly addressing the rising demand for personalized preventive care in India. Next is the expansion of specialized and advanced testing capabilities. We continued strengthening our offering in high end diagnostics including oncology, genomics, advanced infectious disease testing and investments in our reference labs and collaborations with global technology partners remain key enablers of this strategy. Next is deepening our presence in under penetrated markets. Our scalable franchisee led model continues to help Us expand into Tier 3 and Tier 4 markets. Improving diagnostic access in semi urban and rural India remains a core long term priority.
Together these initiatives reflect our integrated approach that is combining a robust physical network, deep clinical capability and digital innovation to serve India’s evolving healthcare needs while driving disciplined and sustainable growth. With that, I would now like to invite our Chief Executive Officer Mr. Shanko Banerjee to share the key performance highlights for the quarter. Thank you and over to you shanko.
Shankha Banerjee — Chief Executive Officer
Thank you Dr. Lal and good afternoon to you all. I am glad to connect with everyone today to walk through our Q3FY26 performance. Our Q3FY26 results reflect sustained growth and operational excellence. We delivered strong financial performance this quarter with revenue rising 10.6% year on year resulting in 10.8% growth for the nine month period. Patient volume growth was lower than our current trend at 2.7% in Q3 due to unexpected decline in our seasonal fever portfolio. The YTD patient Volume growth is 4.4%. Our YTD sample growth remains robust at 9.6% in Q3. We continued the journey of significant clinical advancement with introduction of more than 15 new tests including more than five which are first in India.
These additions were across multiple portfolios further strengthening our high end complex testing capabilities. Our technical team had five international journal publications with one award winning paper in the area of using ML for rapid acute leukemia diagnosis. We have upgraded our enterprise IT infrastructure to next generation technology which has an AI enabled environment at compute and network layer. We have rolled out a new agentic bot for patients at multiple touch points and a clinician facing digital tool in pilot mode. We have enhanced our patient experience at walk in labs and home collection with faster reporting standards in Delhi ncr.
All these initiatives and more in the pipeline are aimed to enhance the patient and clinician experience with the brand. Our recent launch of Sovaka Preventive Wellness Program model also reimagines the patient experience with diagnostics. Together these developments solidify our position not just as a laboratory service provider but as a comprehensive high tech partner in our patients long term health journey. During the quarter Swast Fit contributed 26% to total revenue and continues to play a primary role in our B2C market growth. We are scaling this affordable preventive health model to tier 2 and below towns to capture an untapped preventive testing market.
The transition from unorganized to organized diagnostics in India is sustained as patient priorities shift toward clinical reliability. Our competitive edge lies in stringent quality protocols and superior service architecture. Beyond the test itself, our differentiation is defined by the end to end patient experience, from seamless sample collection to digital report delivery. Ultimately, these superior service levels are the primary drivers of patient acquisition and brand loyalty. We are scaling through expansion in newer markets, innovative offerings and digital enablement. This approach cements our diagnostic leadership and enables long term profitable growth. With that, I will now hand over the call to our group CFO and CEO International Business Ved over to you.
Shankha Banerjee — Chief Executive Officer
Thank you Shanko Good evening everyone and a warm welcome. Thank you for joining us today. I will take you through the key operational and financial highlights for quarter three and nine months of FY26 followed by our year to date performance. Let me begin with some key operating metrics. Revenue per patient for Q3FY26 stood at Rupees 927 representing a 7.7 year on year increase over Rupees 861 in Q3FY25. This improvement was driven primarily by favorable test mix and geographic mix rather than pricing. Test per patient increased to 3.11 in Q3 FY26 compared to 2.97 in the corresponding quarter last year, reflecting our continued focus on menu expansion and and preventive health care offerings.
As part of our commitment to strong governance and customer centric practices, the company has gladly passed on the benefits arising from reduction in GST on reagents and chemicals from 12% to 5% through price reduction for patients. While this had a modest impact on realization, we believe it strengthens our long term trust and demand sustainability. Overall. Our growth continues to be volume with realization improvement coming largely from mix enrichment which we believe are structurally sustainable drivers. Revenue for Q3FY26 came in at rupees 660 crore compared to rupees 597 crore in the same quarter last year reflecting a year on year growth of 10.6%.
Shankha Banerjee — Chief Executive Officer
For the nine months ended December 2025, revenue stood at 2060 crore versus rupees 1859 crore in YTD FY25 registering a growth of 10.8% driven by steady volumes and operating leverage. During Q3 FY26 we incurred a one time cost of rupees 30 crore related to implementation of new labor code which has been reported as an exceptional item. This is a non recurring adjustment and does not impact the underlying operating performance or steady state cost structure of the business. EBITDA before exceptional item for Q3FY26 stood at rupees 179 crore compared to Rs. 154 crore crowed in Q3FY25 reflecting a growth of 16.3% and EBITDA margin of 27.2%.
For the nine months ended December 2025, EBITDA before exceptional item came in at rupees 596 crore compared to rupees 527 crore in the same period last year resisting a growth of 13.1% with EBITDA margin of 28.9%. Profit before tax for Q3FY26 after taking the hit of labor code was rupees 124 crore compared to rupees 138 crore in Q3FY25 with a PAT PVT margin of 18.8% for the nine months ended December 2025 PVT stood at rupees 509 crore versus 471 crore in YTD.FY25 with a margin of 24.7%. Profit after tax for Q3FY26 after Taking the hit of labor code stood at rupees 91 crore compared to 98 crore last year resulting in pad margin of 13.9%.
For the nine months period pad was rupees 378 crore compared to 337 crore in YTD FY25 with a margin of 18.3%. Earning per share for Q3FY26 was 5.4 rupees compared to rupees 5.8 in Q3FY25 for the nine months ended December 2025, EPS stood at rupees 22.4 compared to 20 rupees in the previous year. Our balance sheet remains robust with net cash and cash equivalent of Rupees14.11 crore as on December 31, 2025 providing us significant flexibility to support organic growth, calibrated inorganic opportunities and shareholder returns. I am pleased to share that the Board of Directors has approved an interim dividend of 35% amounting to rupees 3.5 per share on enhanced equity share capital.
Post one. One bonus issue. Our capital allocation priorities remain unchanged, investing in growth, pursuing M and A opportunities and returning surplus capital to shareholders while maintaining financial prudence. Overall, we remain focused on delivering sustainable growth and healthy profitability while continuing to invest in Quality compliance and customer experience. With this, I conclude my opening remarks and I 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 questions may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from Prakash Kaparia from Kapadia Financial Services. Please go ahead.
Prakash Kapadia
Yeah, thanks for the opportunity. A couple of questions from my end, Shankar. At a time when industry revenues have been growing in the 7 to 8% range, our growth, if I look at last 11, 12 quarters, has been 10 and a half percent on an average. So, you know, what am I missing? We have brand, we have technology, we have franchisee network, we have reach, we have Dr. Impaces, salesforce, low cost of test on time delivery. So what is the missing factor which is leading to this kind of a growth? Because, you know, if I look at some of the other listed players, they’ve been reporting higher growth.
So that’s the first question on revenue and secondly on Swastfit, you know, it has been growing almost 2x of our company revenue. So, you know, how is the journey been? Is it now a two tier two, tier three phenomenon also? Is that also contributing there? What’s the journey in tier 2, 3 cities? Is it, you know, movement from basic diabetes and thyroid to some of these packages? And is there any possibility that Swastfit is cannibalizing some repeat usage or revenues at the company level? Those are my two questions. Thanks.
Shankha Banerjee
Right. Thanks, Prakash. So I think on the first one in terms of revenue, I think we’ve been consistent in trying to say that right now we are focusing only on organic revenue growth. If you remember about two years back, we had slipped to about a 7% organic revenue. And so we were quite clear that we want to build the organic momentum back across the organization. And that is what the team has been working on simultaneously. You know, the building blocks of how to take the next jump forward are being put in place. So revenue growth, you know, in the future, we are obviously working towards making this better than whatever we have now.
But the stability that you see is kind of designed to at least bring the organic growth trajectory at a level that we are comfortable. I think we’ve been saying 11 to 12% organic growth for this year. And even as of now, we are confident that we should be able to deliver between 11 to 12% for the year. And once the whole base kind of comes to that level, I think other initiatives which are already being laid out should help us step up going forward. On the second question on Swastvit, Yes. I think even in some of the previous calls I had mentioned that Swasfit now, you know, with our expanding reach, we ourselves are able to now put Sasfet into more geographies, including the smaller towns.
And we are definitely seeing offtake or acceptability of this in the smaller towns also, you know, even in the urban centers, our penetration or availability of this is getting, you know, the, we are seeing not only direct consumer or patient pickup, but like I mentioned, in some cases we are even seeing, you know, doctor recommendations coming for the portfolio so that those, those levers are still in play. And that’s what is helping us maintain the growth momentum on Swastvit.
Prakash Kapadia
Okay, okay. And you know, in some of these initiatives which, you know, you’ve been culling out over the last few quarters, be it distribution, be it new product development, be it, you know, enhancing the menu, I think, increasing the sales force. So where will that trajectory come in? Is it, you know, now is FY27 going to get us there? Because I think last call, your Suburban has stabilized. The IT shoes are done. Bombay Reference Lab has stabilized. So no will west and south contribute more meaningfully to that? Then we’ll see that delta or incremental revenue coming through us.
What’s the tipping point or what? As you know, analysts and fund managers, we should focus on this is what it is and we are there.
Shankha Banerjee
So I think, you know, for a size of organization and the scale that we are running, I don’t think one single city geography will really help in kind of taking the overall number higher. So what has to work for us is slightly different strokes in different geographies, but all geographies will contribute towards the higher growth momentum. So I would say starting Delhi, ncr, North, east, west, even South. I think all of the geography international as well, all of the geographies put together will contribute to the higher growth trajectory that we are aiming for. It is unlikely that one geography will help the overall number of the organization to go to the level that we wanted to move towards.
Prakash Kapadia
Okay, okay, understood. And from next year we should see some better growth. Is that the path we should expect?
Shankha Banerjee
Yeah, that’s, that’s the trajectory that all of us expect, including me.
Prakash Kapadia
Sure, sure.
Prakash Kapadia
That’s helpful.
Prakash Kapadia
Thank you. All the best.
Shankha Banerjee
Thank you.
operator
Thank you. Next question is from Vivek Agarwal from Citigroup. Please go ahead.
Vivek Agrawal
Yeah, thanks. Thanks for the opportunity. In the opening remarks you talked about that the quarter has been also impacted by other volumes have been impacted by your adverse season. So is it possible for you to break it down how the seasonal volumes or the fever related volumes have grown in this quarter or how the specialty or semest specialty test related volumes have grown in the quarter? Thank you.
Shankha Banerjee
Yeah, so I don’t think we’ll get into, you know, that micro detail, but you know, it has been quarter three is usually not a thing where we discuss season or fever or things like that. But it has been an unexpected quarter in the sense that we have seen an impact due to our seasonal fever. Portfolio has got negatively impacted. We have declined on that portfolio. And yes, that has resulted in lower patient volume numbers and even to a certain extent the lower sample volume numbers.
Vivek Agrawal
So basically it has declined. Right. And approximately what is the share of this portfolio in the overall patient volume? Approximately? Actually any ballpark number.
Shankha Banerjee
You see, the share is different by quarter. So I’m not too sure. And that’s not something which we focus upon. So. So I’m not too sure that’s the data we would want even any of you to be focusing upon.
Vivek Agrawal
Yeah, no problem at all. So another question is if you look at the patient volume growth, right. So although this quarter has been impacted, but even if you look at the nine months, it’s around 4, 5% kind of growth. And this is despite that you are pushing significant growth as far as in the tier 2, tier 3 down, expanding the network and all. So is it the right way to look at that your core markets, like for example, daily NCR or in the tier one markets, is there any kind of structural slowdown as far as the growth is concerned or how to put it.
Thank you.
Vivek Agrawal
So I think the patient volume numbers are seeing a steady, I think quarter to quarter fluctuations are there, but if you at least see in the last two, three year movement, you know, from, you know, an annual low of almost 2.7 or 2, 2.7% that we saw two years back, we are going upwards, I think, expecting a jump which will suddenly, you know, you know, at the scale of patient volumes that we do, expecting, you know, this number to Suddenly go up by 3,4% in one calendar year or one financial year may not be the right expectation.
But yes, there is a slow and steady improvement that we are Trying to build on the patient volume number. Yeah. And that you will see, you know, in the, in the YTD number this year also we have obviously this impact right now in this quarter, but we are seeing some increase in the patient volume numbers this financial year as well.
Vivek Agrawal
Yeah. Thank you.
Unidentified Speaker
Sango. This from my side. Thank you very much.
operator
Thank you. The next question is from Anshul Agarwal from mk. Please go ahead.
Anshul Agrawal
Hi. Thank you for the opportunity. Hope I’m audible.
Shankha Banerjee
Yes.
Anshul Agrawal
Great. So my first question is on margins. I think generally we see a dip in margins in the current quarter and we had previously indicated that, you know, H2 margins would also be lower than H1 owing to network investments and other expansion projects. Are the current margins, I’m talking about nine month ended margins sustainable at around 29% going forward.
Ved Goel
So Anshul, wait, this side, I think if you see H1 margin was higher this quarter. If we take out the impact of labor code it is 27.2% and you know, later part of the year we said it will be lower than, you know, first half of the year. So overall earlier we said, you know, similar number, you know, around 28% kind of margin. And that is we are confident that we can achieve in this financial year between you know, 27, 28% even after this impact of labor cone.
Anshul Agrawal
Got it. Going forward, the margin trajectory would remain firmly around this 28% is what I’m trying to understand. Despite us passing on those GST related benefits, etc. And all that stuff.
Ved Goel
Yeah, I think we are, we are, we are hopeful that we can maintain the trajectory between 27, 28%.
Anshul Agrawal
Got it. Second question I had was can you, can you provide us an update with the advanced radiology pilot project that we had undertaken in Delhi? Is there any update that you can share with us with regards to traction or any plans to sort of expand on that?
Shankha Banerjee
So the traction on the advanced radiology is that we were running a one center pilot in Delhi NCR and we are, you know, looking at it and it is, it is kind of going as per the planned trajectory that we have. So we have now started or just started another center in Delhi NCR on advanced Radiology because we want to now see how replicable is our first, first pilot, you know, in another location which is geographically apart. So, so that’s the status as of now.
Anshul Agrawal
But this would be an advanced center only, sir. Right. It will include include MRI and CT scan machines.
Vivek Agrawal
Yeah, this is another center with the MRI and CT scan.
Anshul Agrawal
Just one last booking Question from Ayan. Can you help us? The capex number for the current quarter, any full year guidance incorporating these high investments in radiology and even Suvaka preventive wellness program.
Shankha Banerjee
So Anshul, this year you know we have made two investments which is one, we bought one, you know, property which is for our precision diagnostic center. And of course the Swaka which we have just started. So we are you know roughly will be spending about 150 to 160 crore kind of capex in this year. Normally we spend about 50, 60, 70 crore on an operating kind of capex. But these radiology center which, you know, let’s suppose if we take one center it takes away about 15, 16 crore kind of investment. And if we you know take, let’s suppose going forward one or two more then accordingly someone can factor in these two more investments.
Anshul Agrawal
Right? So sustainably CapEx could settle at around, say around 60, 70 crores of operational capex. Plus us to send the capex on this radiology. So about 100 odd crores could be. Right.
Ved Goel
Plus some. Yeah, plus some new initiative or new investment. So near to time maybe you can you know see between 100 to 150 crore kind of capex. Someone should assume
Anshul Agrawal
that’s it from my end. Thank you and all the very best. Thank you.
Shankha Banerjee
Thank you.
operator
Thank you. The next question is from Bino Pathirampil from Ilara Capital. Please go ahead. Mr. Bino, you may go ahead with your question. There seems to be no response from the line of Mr. Bino Pathiramparal. We move to the next question. The next question is from Raman KV from Sequent Investments. Please go ahead.
Raman KV
Hello sir, can you hear me?
Shankha Banerjee
Yes.
Anshul Agrawal
So I have two questions. One is sir, can I get the total test volume for the quarter?
Shankha Banerjee
Total test volume?
Raman KV
Yeah, number of tests conducted, not the sample collected.
Ved Goel
So we have done 22.2 million samples in this quarter.
Raman KV
Yeah, that is the sample collected. Right. I just want to understand the number of tests performed on those samples.
Ved Goel
So you, you know Raman, we generally give sample number. So what you are talking about the parameter where. Let’s suppose if we do one test which is tft. Lft. Let’s suppose and within that there are so many parameters which directly. So these are not reported. So we generally give sample numbers.
Raman KV
Okay, Understood sir. And so my second question is with respect to first bit, I just want to understand the margin difference between the rest of the portfolio. This is where I’m coming from. I just want to understand if once your contribution of fast rate improves Further, will it aid margins or will it be a pressure on margins or. Or the margins will remain flat.
Ved Goel
So, you know, realization is of course higher in, you know, SWAT fit because of bundle and packages. But same time we provide discount because these packages are at discounted rate. Obviously we get operating leverage and overall, I mean net net, it is not like very different. But yes, realization is higher and operating leverage is always coming, be it consumption, be it other operating overheads. But somebody should not factor in that, you know, higher contribution from Swiss fit will, you know, give very high margins, you know, that one should not, you know, factoring.
Raman KV
Understood, sir.
Prakash Kapadia
It is not margin dilutive.
Raman KV
Okay. Understood, sir. So my third question is with respect to the newly launched swirl car. Can you just soak. Sorry, can you just elaborate what the task with the company will be performing under this?
Shankha Banerjee
So Suvaka is a. Is a very new conceptual setup. It’s focused on preventive wellness testing only. And you know, it is. If you want more details you can go on to sovaka.com, which is the website dedicated to Sovaka. You can type S O V a k a sovaka.com and you will get details. But it is all preventive health checkup. These are packages which, which are kind of, you know, there’s a pre consultation with the doctor and depending upon individual conditions, family history, etc. Packages are suggested and finalized and then the testing happens and report consultation and diet consultation.
Post that. So it’s a. It’s a wellness and preventive focused testing only.
Raman KV
Understood, sir. And sir, B2C share during the quarter, is it still 75 or has it increased?
Shankha Banerjee
B2C share is still around 75%.
Raman KV
Okay, thank you sir.
operator
Thank you. Next question is from Binopathy Parampil from Ilara Capital. Please go ahead.
Bino Pathiparampil
Hi, good afternoon. Can you hear me?
Shankha Banerjee
Yes.
Bino Pathiparampil
Okay. Okay, great. Sorry about last time. So a couple of questions from my side. On one side we have seen a sharp depreciation in inr. And at the same time we have seen this European Union trade deal which cuts tariffs. Does either of this favorably or unfavorably affect our cost base and can it impact margins?
Ved Goel
Yeah. Thanks Bino. So yes, I think dollar is moving up. We all know. And most of our reagents and chemicals are, you know, imported. So indirectly we are also impacted. But we are able to absorb that inflationary cost because of our volume. Right now we don’t have any, you know, which is, you know, linked to. Directly link to dollar because we buy from Indian companies on the other side. This EU trade deal is very early to comment on. Definitely there may be some opportunity in future which can come, but right now it is too early to comment on that.
Ved Goel
Okay. And in case these reagent prices actually go up, do you think you can pass them on without impacting volume growth?
Shankha Banerjee
So you know, we have long term contracts with most of our large suppliers, so right now we are, we are not having that. But yes, of course, if dollar trajectory is upwards like this, then definitely we have to review and review our pricing again.
Raman KV
And one question on the radiology plan. So you mentioned that going as per plan. So in the normal course, if it goes as per your plans, when can we see a significant ramp up on that strategy? Would it be in couple of years or would it be in 5 years?
Shankha Banerjee
So radiology of contribution to our business less than 5% and you know, even a significant ramp up may or may not immediately, you know, impact the overall fortunes of the company. But having said that, you know, we are definitely understanding the business model around high end radiology in brand strong urban markets. And then we will also maybe try and understand in some other markets and then figure out our, you know, long term strategy. So having said that, you know, in terms of time horizon, like you said, it is unlikely to be a significant contributor to top line growth, at least not in the next two, three year scenario.
Vivek Agrawal
Thank you,
Anshul Agrawal
thank you.
operator
Thank you. Next question is from Sayan Mukherjee from Namura. Please go ahead.
Saion Mukherjee
Yeah, good evening and thanks for taking my question. Sir, you mentioned about the patient volume growth, you know, at 4 to 5%, which you think can increase going forward. It may not be a step up, but it will, it can go up. If you can share your thoughts as to what we should look at, what would drive that and also acquisition, small, big ask. Is that a possibility you see in the current environment and can that emerge as a driver for you?
Shankha Banerjee
Right. So for the organic patient volume growth, there are one or two obviously quite clear levers that I think we’ve spoken about earlier. And the most important one is the spread and the access that we are increasing for patients. You see the number of new testing labs and the collection network expansion that we have stepped up over the last two years is aimed at getting more wider geographic spread and therefore ability to access larger population and give more access to a population to come and you know, use our, our brand for their diagnostic needs. So I think that’s number one.
And, and then primarily over and above that, even through our existing network, you know, there are patient acquisition activities that we keep doing from time to time. And our tier 3, tier 4 and rural push that we have been undergoing for over, I would say maybe four to five year journey that we have had on that is also you know, going to help us get the organic volume on the inorganic side. You know, definitely there is appetite on for us to be looking at inorganic opportunities and we are on the lookout for suitable inorganic opportunities which can fit into our portfolio and our strategic growth areas.
Saion Mukherjee
And sir, I mean are you looking at, I mean how should I say like you know, is it like mid sized chain, big chains or individual labs, what kind of acquisition are most likely?
Shankha Banerjee
So I think the, it’s not that we, we look at, you know, all kinds of options because it is geography specific. I think the south market is something where we would definitely like to have something which is reasonably large, at least maybe a top three top five player in a given city with a slightly larger platform play which we can then adopt and grow. Whereas in some of our other north, east, maybe even some parts of west we are open to doing standalone lab acquisitions which gives us, you know, maybe access to some micro market or some other benefit which we are maybe not able to get through our normal organic business.
Saion Mukherjee
Understood sir. On the pricing front I understand like it’s been like three years, you know there has not been any price increase. In fact you mentioned there has been a, you know the GST cut on inputs were passed on. So what are, what is the view on pricing? When do you plan to take know some price increase? Can we expect this year or next year? Any thoughts around that?
Shankha Banerjee
So you know like Ved mentioned, we have, we have just taken a decision to do a price cut to pass on, you know, the GST benefit. So that cycle has to run for some time before we consider a price increase. So therefore I definitely don’t see a price increase on the horizon at least or not for the next two to three quarters.
Saion Mukherjee
Okay. Okay sir, I have more questions. I’ll just join back. Thank you.
Saion Mukherjee
Thank you.
Shankha Banerjee
Thank you.
operator
The next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan
Yeah, good evening. Thank you for taking my question Just one on, on the realization part again I’m just calculating revenue per patient from your revenue numbers and the patient numbers. So that’s come up by seven and a half percent you mentioned. I think the GST cuts have not come in Q3, so I’m assuming it’s in Q4. So you know what would be some of the enablers of this? Would it be higher swath can you just explain that or has the environment from a competitive standpoint been a lot more easier, you think.
Shankha Banerjee
So? The GST price cut was taken in Q3 but it was maybe towards the end of Q3. So obviously the full impact has still not is not reflecting in the RPP of Q3 to that extent. You are right. It is a combination of test and geography mix that we are seeing in terms of rpp. As we said, you know, Delhi NCR continues to grow double digits and we all understand that Delhi NCR is a higher RPP market for us compared to the rest of the country. And we also have some test mix benefits that are there.
So those are the major contributory factors for the geography and the test mix for the RPP increase that we see.
Shyam Srinivasan
That’s helpful. Sir, just the second question is on, you know, you alluded to higher growth over time. You know, are we talking about not the 11 to 12% but are we talking about higher than that? We think, you know and you know, at some point of time, if it’s three, four, five quarters later, we are looking at price increases. Could we then go beyond the 12% on a medium term basis? I’m not holding you to a specific year but just want to understand, you know, are we, is the trajectory looking up at any point of time?
Shankha Banerjee
Yeah, I think the thought process that you are saying is reasonable. We are looking at, you know, 11 to 12% is what we’ve been saying for this financial year. So going forward, if that becomes our baseline, we obviously would like to be slightly better than that. And maybe three, four quarters down the line, you know, the price increase window may open up again.
Shyam Srinivasan
Yeah, just. And what would be a trigger for a price increase? I’m just curious. We have not done it for many. Anything that you think will then say this prompts us to take prices. Is there something that we monitor closely? Is it inflation? I’m just curious what would trigger a price increase?
Shankha Banerjee
I think there are two triggers we look at. One is obviously interesting. Internal cost is one thing which we continue to look at how much we can absorb or what is it that can’t get absorbed, etc. And second would also be the external pricing table because you know, we don’t want to get into a situation where we are not or we seem to be falling off the pricing premium table because there are quality connotations associated with price in our country.
Shyam Srinivasan
Still got it, Got it. Thank you. And all the best.
Shankha Banerjee
Thank you.
operator
Thank you. Next question is from Surya Narayan Patra from Philip Capital, please go ahead.
Surya Narayan Patra
Yeah, thanks for the opportunity. Sir, my first question is on the SAA init. So I just wanted to understand sir how is this different from the first fit and whether this will be complementing first fit growth. And another point here is that can this Suvaka initiative be scalable and scalable beyond the ncr?
Shankha Banerjee
So Suvaka and SWASFIT are very different in their idea and execution. So SWASFIT is a pathology only and widely distributed and accessible, you know testing portfolio which we said not only do we do in urban centers, it also goes into tier two, tier three, tier four towns, you know across the country. Sovaka is a personalized customized wellness preventive wellness setup which integrates pathology and imaging, including high end imaging and is a specific center driven touch and feel experience for people who are looking at really in depth understanding of their individual health status. So this is kind of center driven as of now is the first center that we have launched.
Again you know this will be on a mode where we will see how we are scaling this, the patient footfall, the walk ins etc and the buildup of this center. I think only basis that will we decide how do we scale it. But you know there are, there will be, there could be possibly multiple modes or models of scaling. But yeah, the scalability is way beyond le NCR once we get the model right.
Surya Narayan Patra
Okay, so is it fair to believe this way says first fit is a kind of annual testing mechanism while Suvaka would be a once in lifetime or once in 10 year kind of thing.
Shankha Banerjee
So both are, both are annual. It’s just that the type of testing is different and the offering is very different. Both are, both are annual in from a preventive side.
Ved Goel
Just on this first fate it is not only you know preventive wellness but it is in our case most of the time it is upselling maybe you know, patient who are coming for individual test. They are you know trying to take this package because it makes sense and avoid multiple, you know visits where they can get a lot more tests in single visit. So it is not always preventive wellness while Savaka is purely preventive, preventive and wellness kind of thing. But SWAS fit is always, you know where we have patient who comes in need also.
Surya Narayan Patra
Okay, yeah, thank you for that. This is helpful. Just one more on the whether we do get any benefit out of this Ayushman Bharat or digital mission success what we have seen.
Shankha Banerjee
So as of now, you know we are, we are enabled to incorporate ABA IDs into our system. So Whosoever is, is giving us, you know, their ABA IDs, we, we put it into their records, the ABA IDs. But you know, primarily ABDM is still focused on, you know, the hospital care diagnostics. As of now, we haven’t yet seen any reasonable thing to believe that this can become a key driver of growth for us right now.
Surya Narayan Patra
Yeah. Thank you. Thanks a lot. Thank you.
operator
Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. The next question is from Vamsi Hota from Ask Investment Managers. Please go ahead.
Vamsi Hota
Hi. Thanks for the opportunity. So my first question is on the extent of utilization of both the Mumbai and Bangalore reference labs. So given that we continue to open about 600 to 800 collection centers annually with greater focus on the high growth north market sector of Delhi, how do you plan to ramp up the utilization of these two specific reference labs?
Shankha Banerjee
So the reference lab capacity, you know, by design is very high. Okay. Because it depends on, you know, what type of machine modularity that is currently deployed and there is obviously ability for us to keep deploying more. So a lab is designed with a life which says we are looking at maybe a 10, 15, 20 year outlook on a reference lab kind of setup. So I don’t think that kind of correlates with the structure of network collection that is going in other parts of the country. So the reference lab actually helps in building the tier wise hub and spoke model that we work on.
So we’ve got reference lab, then hub lab, then you know, cluster labs and satellite labs and then front end we have the collection network. It’s about putting a certain test menu in the market and then our ability to really build that test menu with the local prescribing community in the catchment area and our ability to deliver that, you know, timely reports and the quality report from the reference lab that we have for that geography. So that is an independent task and does not necessarily correlate with saying that, you know, more collection network will certainly mean more capacity utilization at a, at a reference level.
Vamsi Hota
That is helpful. Sir, I’ll just ask one more question. So given that we follow a revenue sharing arrangement with our franchise network and that in marketplace of Delhi we end up sharing more than 25% of our revenue with the network, don’t you foresee incremental margin dilution given franchisee LED growth? If not, how much more bandwidth do we have on expanding our EBITDA margins via process efficiencies and leverage? Given that all of our growth has been Volume and price debt at least over the last two years.
Shankha Banerjee
Okay. I think Ved will add to whatever I say. I think one must understand that when a franchisee is given a margin there are certain tasks of the whole process which also get outsourced and there is a certain, you know, benefit that we also get because of you know, accumulation of samples and you know, and on top of that we get an independent entrepreneur who’s also kind of really running after generating business for us. So there are multiple reasons why the franchisee footprint works for us and we’ve been able to really develop a very strong mechanism of franchisee management.
If you see besides Delhi NCR the model of you know, franchisee revenue share is different in certain other geographies depending upon how the competition, layout, competition etc is. So we’ve been able to manage it quite well till today in terms of our overall portfolio margin and we don’t see any reason why that can’t be managed going forward as well. So you know, Ved, you want to add anything to that?
Vamsi Hota
No. So I don’t think margin it is, you know where it is dilutive because first of all this model of having franchisee is because of scalability because you know, and not putting fix overhead on our head because there is an entrepreneur who always drive and you know it’s a variable model where you share out of your revenue share instead of, you know, incurring on, on your own infra cost. So in spite of, you see our contribution has increased so much. We are, we are not done diluting our margins. In fact we are, you know, getting operating leverage because we already have testing outlets, we have already you know, capacity which is available and we can leverage on that.
So I don’t think this will dilute our margin.
Vamsi Hota
Sure sir. So incrementally how much more scope or you know rather another way to ask this is what is the you know, dream state EBITDA margin assets that you kind of look at.
Shankha Banerjee
So you know I think we are very near the dream state if you ask me because we would rather see if we are, we feel that we are in a position to generate more margin. I would rather see how can it be deployed back to generate growth, sustainable growth over the long term. I think the margin profile that we run, 27 to 28% EBITDA is a, is a very, we are maybe in the quote unquote what you say dream state.
Vamsi Hota
Sure sir, very helpful. Thank you and all the best.
Shankha Banerjee
Thank you.
operator
Thank you. Next question is from Reet Jain from Niveshe Please go ahead.
Unidentified Participant
Hello. Hello. Yeah, yeah. Basically my question was are the molecular diagnostic layer like 3B black bio or my lab mobile, they are coming into the industry like Mole, find that file, their IPO trsp. So basically are there competition or are they a supplier to us for kids? And how is that molecular diagnostic industry doing? Can you give a color on that?
Shankha Banerjee
So, so Mall Bio is a, is a, is a vendor, is a supplier. They aren’t really into front end retail pathology as far as I’m aware. And so, so that is one question. And you know molecular testing obviously is seeing increase, you know, over time and PCR testing, etc. So yeah, I think that part of the portfolio should increase. I think maybe more traction will come on that portfolio also because of the oncology testing, etc. Happening. I think that portfolio will see. And I think the second thing which Dr. Lal is also mentioning is that we see genetics again.
Another area where, you know, quite a bit of traction we foresee will come in the market.
Unidentified Participant
Basically. Can you give the reasons why that side of portfolio is going wide and such extensive tests are taking markets from this simple testing.
Shankha Banerjee
I don’t think it replaces simple testing. Please understand what is happening is when you get into genetic testing or molecular testing, these are more personalized, customized and you know, more deeper testing. But that doesn’t take the need away of routine or regular testing. Actually on the contrary, as people get diagnosed, diagnosed with more, you know, difficult or complex conditions for therapy and the patient management, the routine testing is required and that need may actually go up. So I don’t see it to be a replacement rather, you know, it, it is more about building and helping build your clinical, you know, superiority as well as the trust with the, with the clinicians of our ability to really solve the complex diagnostic problems.
I think that is where these portfolios also play a role in our business.
Arvind Lal
And this is Dr. Lal. And we are also acutely aware of the increase in testing for all these Non Communicable Diseases, NCDs, so which are basically basic diseases in our jargon. But at the same time the numbers are humongous led by diabetes, high blood pressure and you know, lipid profiles and of course cancer is catching up. Liver, kidney. So all these are a very large set of diseases which we Club under NCDs. So this is a remarkable improvement or performing because 65% of the Indians are dying from these diseases every day. Non communicable diseases, lifestyle diseases, of course infectious diseases have not left us, they are about 35%.
But right now NCDS are catching up.
operator
Thank you. Next question is from Lokesh Manik from Vallum Capital. Please go ahead.
Unidentified Participant
Yes. Hi, good evening to the team. So just one clarification. I needed the new initiative of Kovaca. Would you say this is more like a DP3 for a direct to customer foray versus our established model where you know, the doctor and the lab setup may not exactly be in the same premises versus a Sovaka which would be in the similar premises with obviously more advanced testing and advanced services product portfolio. Would that be a correct assessment?
Shankha Banerjee
So Suvaka, like I was mentioning earlier, is a preventive testing and on a wellness testing driven platform. So to that extent you know, it, it can see more self generated tests but it does not mean that there is not going to be clinician referred testing here as well. So I think, you know, even annual health checks which people do, they may end up showing it to a clinician after that. So. So therefore you know it is not an either or. But yeah, compared to the standard diagnostic lab testing where primarily much more prescription driven testing is happening, in this situation we might see more slightly more self driven testing as well.
Unidentified Participant
Right. So this would be company owned. Right? This would not be franchisee or channel partner.
Shankha Banerjee
Yeah, yeah, yeah. This is company owned. Fully company owned. Yeah.
Unidentified Participant
And even when you plan to scale, it will be company driven model, it will not be outsourced.
Shankha Banerjee
So the scaling, so the scaling model, scaling model we will enumerate later because you know, once we have the experience of running the center, obviously many more details will be with us for us to then decide. But the flagship store is company owned.
Unidentified Participant
That’s it from my side. Thank you so much. Thank you.
operator
Thank you very much. We’ll take that as the last question. I would now like to hand the conference back to the management team for closing comments.
Arvind Lal
Thank you all for joining the call today and for your continued trust and support. We hope we have been able to address your questions satisfactorily. Should you have any further queries, please feel free to reach out to us. Thank you once again and have a good evening.
operator
Thank you very much on behalf of Dr. Lal Path Labs Ltd. That concludes the conference. Thank you for joining us ladies and gentlemen. You may now disconnect your lines.