Nomura has maintained its 'Buy' rating on Dr Lal PathLabs and raised its target price to Rs 2,280 from Rs 2,150, implying an upside of 12.4%. The revision follows a strong September-quarter performance, driven by broad-based volume growth and higher realisations, with EBITDA margins reaching a multi-quarter high.
Dr Lal PathLabs reported revenue of Rs 8.7 billion in Q2FY27, up 19.6% year-on-year and 9.6% sequentially. Sample volumes grew 13.4% year-on-year, while realisation per test increased 5.5%, supported by price hikes under the CGHS and ECHS schemes, a favourable test mix with higher specialised testing and a favourable geographic mix.
Core EBITDA increased 25% year-on-year and 13.2% sequentially. EBITDA margin expanded 139 basis points year-on-year and 104 basis points quarter-on-quarter to 32.1%. Net profit grew 27.5% year-on-year and 13.8% sequentially.
Swasthfit contributed 26% of revenue, remaining broadly flat year-on-year, while growing around 20%. Revenue growth excluding Swasthfit was also strong at 19.6%.
Management reiterated its focus on sustainable mid-teens organic revenue growth and maintained FY27 guidance in the high teens. First-half FY27 performance is tracking slightly ahead of plan.