Dr Lal PathLabs Ltd Q3 FY23 Earnings Conference Call Insights

Key highlights from Dr Lal PathLabs Ltd (LALPATHLAB) Q3 FY23 Earnings Concall

Q&A Highlights:

• [00:12:28] Dheeresh Pathak from WhiteOak asked about the revenue and EBITDA for Suburban for 3Q23. C. A. Ved Prakash CFO said Suburban had revenue of INR37 crores, with INR35 crores from non-COVID and the rest from COVID and allied. EBITDA was 7%, lower due to expenses related to a new reference lab.

• [00:24:06] Rahul Agarwal from InCred asked about Suburban integration status and next 12 month plan. Om Prakash Manchanda MD replied that the main setback for Suburban was that last year about 50% of the turnover was from COVID and when the pandemic hit, that number dropped significantly. In terms of transition, the team is now stable.

• [00:26:48] Prakash Kapadia from Anived Portfolio enquired if non-Delhi NCR market and suburban a key metric to evaluate growth drivers for FY24. C. A. Ved Prakash CFO replied that the company will grow back in Delhi NCR strongly for FY24.

• [00:36:50] Prakash Agarwal from Axis Capital queried if pricing can play a role in widening footprint. Om Prakash Manchanda MD answered that at current level of growth in the industry, LALPATHLAB has to pass it on to the market. The company is foreseeing a rebalancing of pricing and is open to considering the increase in prices.

• [00:38:23] Prakash Agarwal from Axis Capital asked if there’s a one-off in other expenses going down QonQ and YonY. C. A. Ved Prakash CFO clarified that there was a one-off transaction cost in 3Q22.

• [00:40:48] Cyndrella Carvalho of JM Financial queried if there is any one-off expenses in P&L related to Vidya Vihar Lab. C. A. Ved Prakash CFO answered that there is no one-off and also it’s not material. However, since it’s a big reference lab, some expenses will come for some time.

• [00:57:57] Sameer Baisiwala at Morgan Stanley enquired if the company has tested the pricing power in B2C channels. Om Prakash Manchanda MD answered that LALPATHLAB has also been little cautious, given the competitive intensity but added that it will need to test it out going forward.

• [00:59:08] Aashita Jain from Nuvama asked about the company’s present infrastructure in south India market and expansion plans. Om Prakash MD said that in South India, there has been significant progress in terms of infrastructure and the number of labs, collection centers, and hospitals. However, there is still a long way to go in order to catch up with other parts of the country.

• [01:02:30] Aashita Jain with Nuvama asked about LALPATH’s plans in Swasthfit to fight competition that are aggressively priced. Om Prakash MD answered that pricing is only one of the considerations when purchasing health packages. Swasthfit has a plan to grow the portfolio and it has seen a 19% contribution to it in 3Q23.