Dr Lal PathLabs Ltd (NSE: LALPATHLAB) Q4 2025 Earnings Call dated Apr. 25, 2025
Corporate Participants:
Arvind Lal — Chairman and Managing Director
Shankha Banerjee — Chief Executive Officer
Ved Goel — Chief Financial Officer
Analysts:
Siddharth Rangnekar — Investor Relations
Prakash Kapadia — Analyst
Karthik Chellappa — Analyst
Anshul Agrawal — Analyst
Shyam Srinivasan — Analyst
Bharat Celly — Analyst
Raman KV — Analyst
Divyansh Gupta — Analyst
Amey Chalke — Analyst
Deven Kulkarni — Analyst
Sumit Gupta — Analyst
Harshal Patil — Analyst
Kunal Lakhani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Dr Lad Labs Q4 and FY ’25 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 conference call, please signal an operator by pressing start and zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Siddharg Rangnikar from CDR India. Thank you, and over to you, sir.
Siddharth Rangnekar — Investor Relations
Thank you. Good afternoon, everyone, and welcome to Dr Lal Pat Lab’s Quarter Four FY ’25 Earnings Conference Call call. Today, we are joined by senior members of the management team, including honorary, Dr Arvind Lal, Executive Chairman; Mr Shankur Banerjee, CEO; Mr Vit Prakash Goyal, Group CFO and CEO, International Business. I would like to share our standard disclaimer that some of the statements made on today’s call could be forward-looking and actual results could vary from these statements. A detailed note is available in the results presentation on this and the presentation has been circulated to you and is also available on the stock exchange website. I would now like to invite Honorary Big, Dr Arvind Lal, to share his perspectives. Thank you, and over to you, sir.
Arvind Lal — Chairman and Managing Director
Thank you,. Good evening, everyone, and thank you for joining us today on our annual earnings call. I will share perspectives on the diagnostics as an industry and the opportunities that it presents for Dr Lal. As we reflect on the strides made in India’s healthcare sector during FY ’25, it is evident that both government and private entities have intensified their commitment to enhancing health infrastructure and services. The union budget for 2025 and ’26 has increased healthcare allocation by nearly 11% to nearly INR1 lakh crores. Flagship schemes like Ayushwan Bharat, PMJ received increased funding. Concurrently, private-equity investments in healthcare have reached $5 billion to $6 billion in 2024, nearly doubling pre-pandemic levels and expected to maintain at these levels concurrently. Both 10 point towards the breadth and depth of opportunity in this space. Demographically, India stands at a pivotal juncture. The working-age population that is 15 to 59 years of age is projected to constitute 65.2% of the total population in 2031, offering a substantial demographic dividend. The population of seniors in the same-period is expected to stand at 13.1%. Some estimates predict that India shall have 34 crore seniors by 2050, accounting for approximately 17% of world’s elderly population. This dual demographic trend underscores the pressing need for a healthcare system adept at addressing both preventive and geriatric care. In this evolving landscape, the diagnostics industry plays a crucial role. The diagnostics sector growing in double-digits annually is witnessing steady expansion. However, it’s noteworthy that the organized segment accounts for only a fraction of this, highlighting significant opportunities for consolidation and standardization. I would like to share few important trends with you at this moment. Given how the growth is — is — in testing is shaping up, Tier-2 and Tier-3 towns and beyond are expected to account for a larger share of the diagnostic demand in the coming years. Secondly, the burden of non-communicable diseases or HCDs or lifestyle diseases has significantly increased with cardiovascular conditions, diabetes and cancer estimated to impact about 23 crore people by 2030. Ahead of path ramps, we are committed to serving this requirement for higher testing by leveraging technology, expanding our reach and ensuring that quality diagnostics are accessible across the country. Our brand has introduced new tests and overseen the establishment of new laboratories with a view to enhancing accessibility. Investments have continued in digital technologies in order to streamline operations and improve patient experiences. This includes implementation of advanced laboratory information system and usage of AI to AI to enhance diagnostic accuracy. As we navigate these transformative times, our focus remains steadfast on innovation and excellence. Together, we can shape a healthcare ecosystem that not only meets the current demand but is resilient and responsive to future challenges. Thank you for your continued trust and partnership. I now hand over to Shanko. Over to you, Shanko.
Shankha Banerjee — Chief Executive Officer
Thank you,. A warm welcome to everybody on our Q4 and FY ’25 earnings call. On the operational front, we sustained a strong growth trajectory in Q4, driven by volume growth and mix improvement without taking any price hikes. Sample volumes grew by 9.5% to $20.9 million, while patient volumes increased by 3.8% to 6.8 million. Our bundled test program, Swasfit also delivered robust growth of 22%, contributing meaningfully to the overall performance. During the year, we added 18 new labs, expanding our presence in Tier-3 and Tier-4 market while strengthening our network in metro and Tier-1 cities. On the system side, we have successfully implemented Microsoft D365, and the full IT stack in Suburban, creating a unified digital infrastructure across both brands. I also want to take this opportunity to share my perspective on the overall direction for Dr Lal Path Labs. India remains vastly unorganized in terms of diagnostic testing, thus it is our primary objective to develop the market, expand our reach and enhance our impact across healthcare landscape of India. We are strengthening our network in metro and Tier-1 cities, ensuring we remain the trusted partner for diagnostics in places where we are already well-regarded. We also continue to develop our presence across Tier-3 and Tier-4 cities, primarily in North and East. We have built a strong brand preference in the North and East, but we continue to work on building brand reach and strength in West and South. Our vision also includes a relentless focus on expanding our test portfolio. We are strategically growing our capabilities in specialized verticals such as genomics, reproductive diagnostics, autoimmune disorders and other advanced tests. In-line with this, we recently launched advanced amyloid typing test. We are proud to be the first diagnostic chain in South Asia to offer this highly-specialized test under the guidance of National Amyloidysis Center London, UK. Our bundled test program, is a potent instrument to gain scale while providing value to patients. We are extending the bundled test philosophy into the illness segment, ensuring we provide comprehensive and cost-effective diagnostic solutions across the healthcare spectrum. As we progress strongly into the hinter line, year two, we are strengthening. Integral to our future success is digital transformation. We are leveraging technology across our value chain from enhancing the patient experience through user-friendly digital platforms to streamlining our operational efficiencies through sophisticated logistics and data management systems. This digital backbone is a strategic tool for scalability, security and for delivering innovative services. We believe that this clear strategic roadmap, coupled with focused execution will lay a strong foundation for sustainable and scalable growth in the years to come. We are cognizant about the opportunities and challenges ahead and remain dedicated to our mission of providing high-quality accessible diagnostics to all. With that, I now hand over the call to.
Ved Goel — Chief Financial Officer
Thank you, Shanko. Good evening, everyone, and a warm welcome. I will now proceed to share the financial performance for the quarter and the full-year 2025. Revenue for Q4 FY ’25 came in at INR603 crores compared to INR545 crores in the same quarter last year, reflecting a growth of 10.5%. Revenue for the full-year stand at INR2,461 crores against INR2,227 crores in FY ’24, a growth of 10.5%. Revenue per patient for Q4 FY ’25 is INR887, up by 6.4% compared to INR833 in Q4 FY ’24. This is mainly due to improvement in tax and geography mix. Tax per patient for Q4 FY ’25 stood at 3.07 compared to 2.91 in Q4 last year and 2.97 for the full-year FY ’25 against 2.83 in FY ’24. EBITDA for Q4 FY ’25 came in at INR169 crores compared to INR145 crore in Q4 FY ’24, registering a growth of 16.9% with an EBITDA margin of 28.1%. For the full-year, EBITDA stand at INR696 crores compared to INR609 crores in FY ’24, registering a growth of 14.2% with a margin of 28.3%. PBT for Q4 FY ’25 came in at INR154 crores compared to INR120 crore in the same-period last year, resisting a growth of 28.1% with a margin of 25.5%. Full-year PBT stand at INR625 crores against INR505 crores in FY ’24, registering a growth of 23.6% with a margin of 25.4%. PAT for Q4 FY ’25 came in at INR156 crores compared to INR86 crores in Q4 FY ’24, suggesting a growth of 81.4% with a PAT margin of 25.8%. So please note that in Q4 FY ’25, we have a one-time deferred tax benefit of INR40.8 crores on account of voluntary liquidation of Suburban diagnostic. For the full-year, PAT stand at INR492 crores against INR362 crores in FY ’24, registering a growth of 35.9% with a margin of 20%. EPS for Q4 FY ’25 is INR18.6 compared to INR10.1 in Q4 FY ’24. For the full-year, EPS stand at INR58.5 compared to INR43 last year, a registering a growth of 35.9% this EPS has a one-time deferred tax benefit as explained earlier. Excluding this one-time benefit, normalized EPS for Q4 FY ’25 is INR13.6 and for the full-year normalized EPS stand at INR53.5 net cash and equivalents as on 31st March 2025 is INR1,229 crores. Further, I’m pleased to share that the Board of Directors of the company have approved a final dividend of 60%, that is INR6 per share, taking the total dividend for the year to 240%, that is INR24 per share. And I would also like to update that pursuant to the approval of approved scheme of liquidation of Suburban, the entire business undertaking of Suburban has been transferred to Dr Labs Limited on a going concern basis in Q4 FY ’25. 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 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press R 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 assembled the first question is from the line of Prakash Kupadia from Stark PMS. Please go-ahead.
Prakash Kapadia
Yeah. Thanks. Couple of questions from my end. So at a time when most of the estimates were diagnostic
Operator
I’m sorry to corrupt you, Mr Prakash, but one second.
Prakash Kapadia
Now am I audible?
Shankha Banerjee
Yeah. Yeah.
Prakash Kapadia
So at a time when most estimates for the diagnostic industry are showing 8% to 9% growth, our growth has been 10%. So just wanted to understand what will it take at our end to grow at faster than the current rate. So because we’ve been, you know, expanding in — derisking from North, we’ve expanded to East, West is now almost 14% 15% of contribution. I guess with scale, the low-cost and the quality assurance and branding should ensure slightly better growth than this? This is obviously better than industry, but what will it take for us to grow still higher than the current growth rate? So is it going to be specialized tests? Is it going to be some specific region contribution where we are very low or weaker. So some thoughts on that will help.
Shankha Banerjee
So right. Thanks, Prakash for the question. This is Shanko here. So yeah. So you know, industry growth rate is obviously an estimate. And as of now, you’re right, it could be anything between 8% to 10%. Yeah. I think this year or the year that has gone by, we had started the year saying that we would like to do slightly better than the previous year without having to take a price increase and I think we’ve been able to do that. Effectively, it’s a 3% better performance than last year because there is no price increase in FY ’25 versus there was a price increase in FY ’24. So directionally, I think we are moving in the right direction. And you know the — some of the initiatives, it’s unlikely to be any specific geography because you know, as you’ve said, there are at least now three geographies which are reasonable sized, which is Delhi, NCR, North, East as well as West. So it’s unlikely to be any specific geography driven. But I think our investments in terms of new infrastructure, you know the whole expansion of our collection network that we have done a bit of aggression on that in the last 12 to 18 months, we should start seeing benefits of access that we get to newer markets. And also we will — we are looking at, you know, increasing our focus on the rather the portfolio, like we said is something which we are moving into the Tier-3 and Tier four towns as well. So there are — there is still a juice left in that strategy and that’s something which we will continue to push for. And even in our North and East markets, the Tier-3, Tier-4 growth is still continuing. So I think a mix of all of these is what we are aiming towards to see how we can maybe grow faster than what we did in FY ’25.
Prakash Kapadia
Okay. Okay. And anything you would want to call-out on the contribution of specialized test, is that a focus area given our legacy and experience in the industry? Can that be a big contribution going-forward?
Shankha Banerjee
So you know, again, I think we had mentioned in one of our previous calls, the specialized portfolio is something which each company would be defining differently. But the way we define our specialized portfolio, it is about one-fifth of our portfolio comes from the specialized tests. But again, like I said, you know, specialized tests is something, yes, we will focus on. But what we realize is that any given geography, when we go, we have to look at the whole range right from routine, specialized, super specialized bundled test, all of that put together is how the ecosystem moves forward and the growth trajectory builds up. So it may not be right on my part to call-out just one element. But yes, there is focus on the specialized part of the portfolio as well.
Prakash Kapadia
Okay. Okay. Understood. And one question for, given that suburban is now part of your Dr Lan on an ongoing basis. So how does it impact the amortization and the balance sheet because we were writing part of the acquisition cost through amortizing it through P&L. So what is left, how does it change the P&L and balance sheet impact?
Ved Goel
Yeah. So Prakash, there is — on consol basis, I don’t think there is any change because earlier also in consolidated financials, we were, you know, impairing intangibles and the same will continue. It is just that it is coming in standalone now instead of consol.
Prakash Kapadia
Okay. And would you have the figure of amortization for this year and what would be pending?
Ved Goel
So as I mentioned earlier, also about INR50 crore kind of you know a depreciation which is coming every year-on account of intangibles
Operator
Sorry to interrupt him, Mr Kapadia, may we request you to please rejoin the queue. We have other participants waiting in for the turn. Ladies and gentlemen, we request you to please limit your questions to two per participant in order to give the other managed — other speakers the opportunity to ask a question. The next question is from the line of Karthik from Capital Advisors. Please go-ahead.
Karthik Chellappa
Yeah. Thank you very much for the opportunity, sir. Congrats on the quarter. Am I audible?
Shankha Banerjee
Yes.
Karthik Chellappa
Okay, great. Two questions from my side. First, if we were to look at the sample volume growth, could you give us some color on how did NCR North and let’s say, the West and East did individually
Ved Goel
Karthik, hi, this is Vide. I think we are not splitting simple patient volume geographically. Right now, we have given the split in terms of revenue so maybe volume geographically we have not mentioned here.
Karthik Chellappa
Okay. Or let me ask this question qualitatively. I think your endeavor was to improve your volume growth in NCR, which is like your biggest market and that was probably growing lower than your overall volume growth. So are you starting to see traction there? And in FY ’26, can we expect to see NCR volume growth at least better, at least in qualitative terms, would you be able to comment on that?.
Shankha Banerjee
I think you know what we were saying in maybe 1/4 back that we were mostly talking about NCR revenue growth. And since we are not taking any price increase, obviously, it is driven by sample volume and mix. And we would like to — we’ve done about a double-digit revenue growth this year for Delhi and CR. And going-forward, we would like to maintain that trajectory.
Karthik Chellappa
Okay, great. My second question, sir, if I were to look at our patient service centers, this year, we have probably added more than what we added in the last two years, around 845-ish or so, which is also a healthy 14% 15% growth year-on-year. So is this like a prelude that we can see to a better volume print given that you have actually ramped-up your infrastructure and I know there is a need and lag for sure, but just given the investments that you have made in the PSE account, is this a sign that we should start to see better volume growth? Thank you.
Shankha Banerjee
So the whole reason for ramping-up the infrastructure numbers is to ensure that we get access to newer micro markets and even newer geographies. And in some of those geographies and depending upon the geography that the access we are getting, the kind of time horizon on which the infrastructure, the collection network really matures will be different. It could be anything between 18 to 36 months that it would take for the collection network or a new collection center and a lab network to really start maturing and contributing significantly to the — to the volume and the revenue numbers. But directionally, yes, ramping-up of infrastructure should show better volume — patient volume and revenue in the future.
Karthik Chellappa
Excellent. Just one minor point, sir, and then I’ll get back into the queue. This quarter, you have disclosed that West is 14% of revenue. If I remember right, last quarter, it was like-kind of 15-ish percent. [Technical Issues]
Operator
Can you hear me? Hello?
Shankha Banerjee
Yeah, we can hear you now.
Operator
Yes. We’ll move to the next question, which is from the line of Anshul Agrawal from Emkay. Please go ahead.
Anshul Agrawal
Hi, thank you for the opportunity. Am I audible?
Shankha Banerjee
Yes. Great. So, sir, my question is on-network expansion. Are we looking to aggressively add labs in the next one or two years or do we think that the current lab network should suffice our growth plans in this period?. So we’ve — we’ve added 18 new testing labs last financial year. And you know, for this financial year and maybe one more, we definitely would like to keep up the tempo at this pace. We’ve been adding actually close to about, 14 15 labs pre-COVID. And post-COVID, there was a period when the lab addition was slightly slower so we need to maybe catch-up in these few years and after that, we’ll come back to a normal lab addition trajectory. There is still a lot of, you know, a geography space which is available for testing infrastructure. So therefore, that lab addition will continue. And not only that, even existing infrastructure of labs, there are improvements and upgradation of instrumentation, etc that we keep doing and that is also a part of the normal annual operating cycle.
Anshul Agrawal
So just a follow-up on this, sir. Would we see an increase in our PSCs as well commensurate to what we have seen in the current year? The reason why I ask is this our lab utilizations surely seem to be going up and would that continue any of you?
Shankha Banerjee
So yeah, collection center — so lab and collection centers or PSCs as we call them go hand-in-hand. It’s a — is the whole hub-and-spoke and the whole network approach that we have in every geography. So it’s not either or it will happen simultaneously. And I was — as I was mentioning to a previous question that it is that ecosystem of lab and collection center network which once added takes a bit of time to really mature and build-up. So yes, you will see addition of your collection center PSP network as well.
Anshul Agrawal
Okay. Sure. My second question is on the West region. Assessing by the split that you have given geography-wise, our West region portfolio seems to have just grown about 5% in FY ’25. Could you give us an update on how suburban has panned out in the last quarter?
Shankha Banerjee
So we did the whole IT stack changeover in Suburban in Q4 and also the voluntary liquidation process was also carried out in Q4. So because of that, there has been a bit of an impact in terms of the revenue for Suburban in-quarter four. And we’ve already started recovering and we believe that we should be able to recover quickly in the next one or two quarters.
Anshul Agrawal
Okay. So it’s been mid-single digits. Would that be right deduction?
Shankha Banerjee
Yeah, it will be mid-single digits.
Anshul Agrawal
Great. I’ll fall-back in queue and I have more questions. Thank you.
Shankha Banerjee
Thank you.
Operator
Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go-ahead.
Shyam Srinivasan
Thank you. I got dropped off last-time I was trying to ask the call. So apologies for that. Just the first question on the fiscal ’26, what are we sharing in terms of our revenue guidance? So maybe I can start there.
Shankha Banerjee
Thank you. Yeah. So Shyam, so this year we’ve — we’ve ended at 10.5% in terms of revenue growth. So next year, I think we should be better than that maybe 11% — between 11% to 12%..
Shyam Srinivasan
Okay. And is there — just another point here is you mentioned not taken price increase couple of times in the — for fiscal ’25 points. So is there a contemplation of that in the near-term or in the in the medium-term?
Shankha Banerjee
Yeah. So price increase is something which for us will be a very strategic decision. I think I think in some previous call also, we had discussed that if there is you know if we see the need, whether it is in terms of costs or whether it is in terms of the whole pricing table in the industry moving in a certain direction where we are left behind. If any of those things happen, then we may consider, but it is not something which we will do for any tactical reason right now because maintaining the price table also has its advantages in terms of overall growth that we are trying to achieve?
Shyam Srinivasan
Okay. Got it. And could this 10.5% going to 11%, let’s assume. Are we expecting improvement in volume growth or what — or is it still the swasted contribution that keeps going up 26% 28% 30%? I’m just making it up, but what is driving higher-growth?
Shankha Banerjee
Yeah. So I think it will be both. You see the RPP growth that we did this year was about 6%, right, and patient volume and then sample volume at 9.5%. So the uptick, we definitely are trying to do the increase — incremental growth over last year, driven primarily through volume and try and maintain the RPP growth.
Shyam Srinivasan
Got it. Last question, just again guidance on margins. We have reached 28.3%, so very healthy numbers. But just want to understand how we should look at margin for fiscal ’26. Thank you.
Ved Goel
So, Shyam, margins, I think you know we have closed 28% — 28.3%. But going-forward, I think since we have to make a lot of investment in newer geography, newer talent and some digital initiatives and so on and so forth, so around 27% kind of margins we are looking or we are confident to maintain —
Shyam Srinivasan
Sorry, 100 bps lower you are saying?
Ved Goel
Yeah.
Shyam Srinivasan
Okay. And the INR12 crore INR29 crores of cash, any thought process on how that will be likely allocated to it? Thank you.
Ved Goel
Thank you. So again, as stated strategy, we are keeping this cash with us for any opportunity which will emerge. And as earlier mentioned, I mean, obviously, we are growing organically and we have started our own efforts in South, particularly South and West, but if there is any opportunity there, definitely we will be keen to do that opportunity. And that’s why we are keeping this cash. And in addition, obviously, we are paying dividend as well.
Shyam Srinivasan
Thank you. Thank you,. Thank you, Shankur. Thank you. All the best.
Shankha Banerjee
Thank you.
Operator
Thank you. The next question is from the line of Bharat from Equirus Securities. Please go-ahead
Bharat Celly
Sir. Thanks for the opportunity. Sir, we have been actually seeing volume growth of around Mid-single-digit since last almost like seven to eight quarters. So — and despite the fact that we are moving to the interlands of India. So exactly can we see these numbers inching up to the high-single-digit?
Shankha Banerjee
Yeah. So like I was answering in one of the previous conversations, the infrastructure expansion push that we’ve taken in the last 12 to 18 months over the new labs and collection networks and incremental areas around that, you know, those will obviously start maturing. It takes anything between 18 to 36 months for — for those these networks to mature. And we believe that they will help us improve our patient volume number. For overall, you know, like we’ve been saying earlier, for volume, look at sample volume and patient volume both as indicators of volume of not only the patient.
Bharat Celly
And then we will start seeing this hit the land started picking-up probably Tier-2, Tier, three towns. Will it be a case where our volume growth — patient volume growth will look higher, but the realizations will start taking a hit considering the prices there will be relatively lower.
Shankha Banerjee
So our pricing approach in Tier-3, Tier-4 is not really different compared to whatever are the contiguous Tier-2 or Tier-1 markets. So our pricing is similar. So it’s not essentially lower pricing on an MRP basis. But the revenue per patient and those angles, we obviously will look at that how it develops and emerges. As of now, we are not seeing any significant difference between the Tier-3, Tier-4 realizations versus what we are seeing in maybe a Tier-2 or Tier-1 town.
Bharat Celly
And according to you, how the pricing for the competitors will be in these markets?
Shankha Banerjee
So the competition in these markets are primarily unorganized local labs. I mean that’s the main competition in the Tier-3 and Tier four markets. And pricing there is not a very different. I mean, it could be slightly lower, but it isn’t as if it’s very different from the kind of pricing we are able to work on in these markets.
Bharat Celly
Okay. I will get back-in the queue. Thank you.
Shankha Banerjee
Thank you.
Operator
Thank you. The next question is from the line of Raman Sevi from Sequent Investments. Please go-ahead.,
Raman KV
Sir. Can you hear me?
Shankha Banerjee
Yes, please go ahead.
Raman KV
So I just have two questions. One is, I want to understand the competition in the industry because from what I heard — what I’m hearing and what I have seen that there is a competition from pharma players also, like pharma players entering the diagnostic industry. For example, recently-announced its foray into diagnostic sector. So is there a competition — is the competition going to intensify in coming quarters or years?
Shankha Banerjee
So on the competition front, I think this industry has always been quite competitive. And you know there are — there have been phases when newer kind of players have entered the industry. And I think as long as more-and-more organized players come into the industry, it is good because the overall industry benefits from more organized players, it becomes more level-playing feed. So from that point-of-view, you know this competition with more organized players is not something which is very new and is likely to maybe benefit the industry at an overall level as well
Raman KV
Okay, sir. And
Ved Goel
Also big — this market has space for everyone. I mean, it’s not that we are the only player who’ll be remaining here.
Raman KV
Okay, sir. Sir, and my second question is with respect to the capex. So how much capex are we planning for FY ’26 and
Ved Goel
So normally, our maintenance capex is about INR60 crore INR70 crore year and I believe in-going next year, FY ’26, I think similar kind of capex will be there.
Raman KV
You’re saying the capex will be around INR70 crores. And you — as of now, there is no plan of adding additional acquisition. Yeah.
Ved Goel
So that is something different. That’s why I’m saying maintenance capex, which includes normal expansions where we are opening 15 20 labs every year and some maintenance capex on account of, let’s suppose investment in ITs or software and all — and that. But if there is any opportunity, obviously, that will be different.
Raman KV
So our business like follow-up questions with respect to itself. Sir, how much usually is the cap if I have to set-up a lab or pathology lab or a of J lab, how much usually is the initial investment to set-up a new lab or pathology.
Ved Goel
So it depend. I mean we have different kinds of setup reference lab, then we have hub labs and then we have set labs. So small as class where generally INR80 to INR1 crore — INR80 lakhs to INR1 crore kind of capex is required. And if you go smaller lab, which is like Tier-3, Tier-4, even lesser amount is required. So that’s how the capex is required in these labs. Obviously, we are not planning any reference lab further in this FY ’26. So that is not bad.
Raman KV
Okay, and sir, one last question. So what is the — in FY ’26, what is the revenue from pathology and what is the revenue from radiology?
Shankha Banerjee
Our revenue from radiology is actually miniscule, it is very low-single digits. I mean it is it’s all kind of pathology revenue only.
Raman KV
4% to 5% more.
Shankha Banerjee
Less than 5%.
Ved Goel
Yeah, less than 5% to 10% 5%.
Raman KV
Okay. Thank you, sir.
Shankha Banerjee
Thank you.
Operator
Thank you. The next question is from the line of Gupta from Advisors. Please go-ahead.
Divyansh Gupta
Hi, am I audible?
Shankha Banerjee
Yes, you are.
Divyansh Gupta
Hi. A couple of questions. So first is on, let’s say, weaponization of chemicals by China. So they stopped selling of gondolinium, which is MRI agent and today they stopped the shipping — exporting of rare earth magnets, right? And I understand that a lot of our chemicals comes from China for the reagent purposes. So two questions in this, how much of it is coming from China as of today? And is there Indian capacity which can service in case China takes some similar steps in this domain. How are we thinking about that?
Arvind Lal
Yeah, this is Dr Lal here. So the answer to your question is that we hardly get anything from China. Is would be even less than 1%. So this actually does not involve us and we are — since we are not in some radiology, we would be able to ask to answer that question, what you were asking that there is some rare earth committee goes into a die which is injected into the patient. So we were
Divyansh Gupta
Sorry, I wasn’t asking about radiology everything just purely for the pathology diagnostics our reagents.
Arvind Lal
Sology diagnostics, no reagent in our case comes from China. None.
Divyansh Gupta
Got it. Got it. That’s good to hear. The second one was earlier presentation, you used to share this Tier-3 revenue footfall numbers, but in the current presentation, I’m not able to find, would it be possible to share these numbers?
Shankha Banerjee
Yeah. So we’ve had a good growth in our Tier-3 revenues even in this year. So we had a healthy, you know mid-teens kind of growth. So it is definitely in the similar trajectory as what we would have seen earlier. That trend continues.
Divyansh Gupta
Got it. And just last question on a per customer — per patient basis in Tier-3 versus on Tier-1, what is the difference in realization purely made because of mix of pricing difference or at an overall level?
Shankha Banerjee
So as I was answering a previous question, we don’t have a differential pricing in a Tier-3, Tier-4 town versus the — we have a geography approach in terms of pricing. So you know, markets in that vicinity all have similar pricing. So there is no differential in terms of pricing. If at all, it would be maybe a bit of number of tests on per prescription or you know on that basis if there is or a mix differential, that would be the only difference. It is not anything to do with pricing.
Divyansh Gupta
And so what would be that end result because of the mix change, like 5% on a per footfall basis, we end-up making 5% lower, 10% lower and purely because of mix change.
Ved Goel
So I think realization is lower than, let’s say, Tier-1 in Tier-3, Tier-4, but you know that split obviously is varied because of many reasons, as mentioned. So I don’t think we have exit split of that got it.
Divyansh Gupta
Got it, got it. Yeah, those are my questions. Thank you.
Ved Goel
Thank you
Shankha Banerjee
Thank you.
Operator
Thank you. The next question is from the line of Chalke from JM Financial. Please go-ahead.
Amey Chalke
Yeah, thank you for taking my question. Although both of the questions have been answered. I have one question on the expansion. So this year, we have seen something like 18 years and close to 1,000 PSEs. Is it possible to tell the management how much would be in the core areas of like North and how much would be in other core areas
Ved Goel
So we can look at that number and come back to you but in terms of you are asking only labs sure.
Amey Chalke
And second question I have is on the changing diagnostic paradigm, like going ahead, do you think that the importance of diagnostics will remain or we think that AI-powered diagnostic test, etc., digitization or diagnostic imaging, etc., can change a lot of these tests the way they are taken.
Arvind Lal
Could you please repeat the question? I didn’t get your first part, please repeat it.
Amey Chalke
I’m saying that the diagnostic paradigm, the weight is done largely because in the dependence of it. So going ahead, you see the importance of diagnostic to go down in case of, let’s say AI power image techniques, etc., if a lot of these ventures are using them. So we expect the in-vitro diagnostic testing as an importance to go down going ahead.
Arvind Lal
No, we don’t think so. I think in-vitro diagnostics will continue the way they are continuing.
Shankha Banerjee
So our view is there is — if you look at imaging and pathology, firstly, there is a lot of AI deployment that is happening on the imaging side. In pathology, there is still AI work happening. And either which ways a lot of it is going to assist the current evaluation and reporting and maybe help enhance that rather than maybe replace it.
Amey Chalke
Sure, sure. Thank you so much, sir. I will join in.
Shankha Banerjee
Right. Thank you.
Operator
Thank you. The next question is from the line of Devan from Barcellus Investment Managers. Please go-ahead.
Deven Kulkarni
I go hive it. So this quarter, I see that our to collection centers has grown by just three-odd percent Y-o-Y, which is like far lower than our revenue growth. So can you help me understand what’s happened here? Have we cut channel margins or is it some mix change?
Shankha Banerjee
Sorry, what to ratio?
Deven Kulkarni
I mean, fees that — fees to collection centers,
Shankha Banerjee
Fees. Okay.
Ved Goel
Yeah. So it’s a — there is no change in the margins, Devin, it’s purely on the mix.
Deven Kulkarni
Okay. So then how to interpret that, that sales from connection centers has grown by just three-odd percent Y-o-Y in Q4. Okay. And the rest of it has come from our own labs or you know, direct channel, right?
Shankha Banerjee
No, no, that would not be the right way to read it. The sales from collection center has also grown in double-digits. It’s also, you know, like you said, there is a test in a geography mix. You know that is what will be impacting, but there is no change in terms of the — the revenue-share that we are giving to the channel partners.
Deven Kulkarni
Okay, understood. And secondly with what was the EBITDA margin in suburban in this quarter?
Ved Goel
So as I mentioned, this has been, you been merged in the parent company in this quarter. So now we are looking overall margins. So maybe it is the company margin. But as earlier mentioned, I mean couple of quarters back, this was having 15% 16% kind of EBITDA margins. But really now after matching with this, it’s only one which is coming and not separately.
Deven Kulkarni
Okay, fine. Thank you.
Operator
Thank you. The next question is from the line of Sumit Gupta from Centrum Broking. Please go-ahead.
Sumit Gupta
Hi, thank you for the opportunity. So it’s a follow-up to the previous participant session. So sir, just to understand on the competitive scenario in the Mumbai market for suburban and what are the other competitors, like how — how do you see this competition or overall market, how is it shaping up? Thank you.
Shankha Banerjee
So if you see Mumbai market, you know, we are not the leader. So there is existing players who are the market-leader — market-leader there and number two strong player. So for us, obviously, you know since we are a challenger brand in that market, for us that competition has always been there and it remains similar
Sumit Gupta
Okay. So how do you see suburban well over like over the next three to four years? What is your plan for suburban?
Shankha Banerjee
So the plan for suburban is focused on these three geographic places, Mumbai, Pune and Goa and we continue to work on those markets. These are large, as Mumbai as well as Puna have become large diagnostic hubs in their own right. And we believe both these markets have a huge you know, headroom available for us to play both the brands and therefore, we will continue with our two-brand — dual-brand strategy in these markets. And that’s how we want to really move to becoming one of the top two brands in both of the geographies.
Sumit Gupta
Okay, okay. Thank you.
Shankha Banerjee
Thank you.
Operator
Thank you. The next question is from the line of Padil from Asset Capital. Please go-ahead.
Harshal Patil
Good evening, sir, and thank you for the opportunity. Sir, just have two questions from an understanding perspective. So sir, we did say that for FY ’26, we are kind of expecting some 100 bps lower of an operating margins. And so I just wanted to also understand from the perspective that we have some — we’ve kind of expanded our network and lab network and collection networks over the past two to three years. So sir, the benefits of leverage would definitely also accrue going ahead as these centers ramp-up. And simultaneously, we are also expecting 100% lower — 100 bps lower margins. So sir, is it that the initial start-up cost for the recently commissioned labs is higher or are we kind of talking of higher marketing spends?
Shankha Banerjee
Okay. So the — that’s a very good question. I think the — the initial aggression in terms of opening of labs collection network is about 12 to 18 months old and they are still in the maturing phase. And even in this financial year, we are saying we want to open 15 to 20 new labs. And I also mentioned there will be upgradation in existing labs. So it’s not only about the newer labs, but upgradation in existing lab infrastructure that we will do. And also there is a more frontline sales teams to work on, you know, in the newer geographies that we are going and intensifying our approach in the — in a market that we are already there and also advertising costs. So therefore, marketing spend. So it’s a mix of all of that. Basically, you know the — as that previous thing matures over 18 to 36 month cycle, you know we should start maybe seeing those benefits, but then we may have newer areas to invest at that time.
Harshal Patil
Got that. Got that, got that. Got that, sir. Thank you, sir. That answers my question. Thank you.
Shankha Banerjee
Thank you.
Operator
Yeah. Thank you. The next question is from the line of Kunal Lakhani from CLSA. Please go-ahead.
Kunal Lakhani
Hi, good evening. Just a follow-up on an earlier remark. You said that regularly revenue mix is less than 5%. Is that a conscious strategy to keep it — keep the concentration lower or it could — it could be a revenue driver for future. What’s the thought process is?
Shankha Banerjee
So you see in Fora, for currently, we have what we call as basic radiology in some of our core markets, which is X-ray, ultrasound, maybe TMT and things like that. High-end radiology, which is CT, MRI is something which we haven’t really gone into on a big — in a big way. So as of now, there is a lot of market opportunity in the pathology area itself and therefore, being our core strength, we want to focus a more energies in that direction where we — where we have an advantage. But having said that, radiology as an option is always-on the table and we continue to evaluate it. And as and when we find that to be something viable fitting into our growth strategy, we will we will get into it.
Kunal Lakhani
Sure. I mean the reason why I was asking that was because we do have plans to expand in South and some of our Southern peers have a very strong periology mix, which kind of in a way helps them in terms of branding and sort of brand recall. So you think that would not be an issue for us when it comes to expanding South India?
Shankha Banerjee
Yeah. So in South India, currently, our footprint is relatively quite weak and so we have — we are looking at both organic as well as inorganic opportunity in South. There could be a possibility that if there are inorganic assets which are coming with the radiology business attached to it, then that becomes a part and parcel of our business also going-forward. But organically trying to do radiology in South is really not on the agenda right now.
Kunal Lakhani
Understood. Understood. Thank you so much. My second question was on the margin outlook again. This year you’ve guided for like 100 bps lower-margin. But would it be more transient or you think this 27% margin is something that would go on for like say, mid to-long-term?,
Shankha Banerjee
So I think, Kunal, this is you know where we are investing and that is where that doesn’t mean that operating leverage or efficiency is not coming. Whatever improvement or whatever you know increase in the margin, we are investing back into the business. And this is definitely for the FY ’26 we have. Maybe for a longer-term how we’ll go maybe it is difficult to tell at this point of time, but definitely for the next year, we have plans to invest in the business.
Kunal Lakhani
Sure, sure. And lastly, on the pricing bit, right, I mean, we have seen a very prolonged period of sort of no price hikes. And you know it’s not for any industry, right? Price growth is a — is like a litmus test or metrics to measure the health of the industry per se, right? Where do you think we are or how far away you think we are in terms of like the pricing power coming back to the industry, I’m not just talking about Dr Lal or any other operator, but for the industry per se, pricing power coming back when you think that can happen?
Shankha Banerjee
Yeah. So I don’t think this question of taking a price hike or not is something to do with the pricing power. It is more about a conscious choice and a strategic choice of not taking a price increase, given some of the strategies that we have deployed for growth you know moving into Tier-3, Tier-4 towns and some of the other ways that we want to look at sample volume growth also being one of the major drivers looking at how can we improve maybe even patient volume in the future. So it’s more of a conscious reason and since we are able to kind of drive efficiency through operating leverage, a lot of technology that we deploy, we are able to eat a lot of the inflation that is otherwise going to be in the system. So in that scenario, it’s a conscious choice of not taking a price increase. But like I mentioned to a question in the past, you know, we obviously will keep evaluating if there is a cost pressure or if there is any other reason or if you see the pricing table in the industry is moving in a certain direction and we are kind of — there is always a linkage in our industry of price and quality. So we don’t want to be caught on the wrong end of that. If those opportunities then present to us, we may consider a price increase.
Kunal Lakhani
Sure, sure. Thank you so much and all the best.
Shankha Banerjee
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Shankha Banerjee
Thank you everyone for being with us on this call today. We express our gratitude for your continuous trust and support. I hope we are able to answer all your questions. Please feel free-to reach-out to us in case you have any further queries. Thank you once again.
Operator
Thank you. On behalf of Dr Lal, that concludes this conference. Thank you for joining us and you may now disconnect your lines.