Dr. Lal Pathlabs - Status Quo On Volumes Implies No Change In Stance: Yes Securities

Yes Securities Report

We interacted with Dr. Lal Pathlabs Ltd. CFO to better understand the drivers of Q2 and residual FY25 and assess any need to change our assumptions/estimates.

Company indicated that recent heavy rainfall in Northern India is leading to a situation where post monsoon disease pattern is yet to emerge; impact of which is being felt in most of Northern part of the country.

Dr Lal did indicate about likelihood of sickness undergoing a shift (with some impact on volumes) and not necessarily being lost which could lead to a seasonally better Q3.

Focus on Swasthfit remains intact with contribution of 24% to revenues. Suburban remains on path of improvement with renewed B2B push in core markets.

Dr Lal continues to expect growth similar to that in previous year with lack of price hike (2.5% benefit in FY24) being compensated by that much better volumes.

Suburban and specialized tests are reiterated to be key medium-term levers even as the conversation reinforces our volume/mix change assumption; stick to our negative stance in lieu of no incremental change noticed in expected volume growth.

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