Dr Lal PathLabs hits record high in a weak market; surges 19% in 5 days

The company would continue to reap benefits from increased Covid-related and allied testing in its widespread network of diagnostic centers and labs, analysts believe

Shares of Dr Lal PathLabs hit a record high of Rs 2,924.85, ralling 7 per cent on the BSE in the intra-day trade on Monday, on expectation of healthy earning growth in the near-term, as the company would continue to reap benefits from increased Covid-related and allied testing in its widespread network of diagnostic centers and labs.

At 11:03 am, the S&P BSE Sensex was down 2.6 per cent at 48,744 points while the stock was quoting higher for the fifth straight trading day. The stock has rallied 19 per cent, as against a 0.72 per cent gain in the benchmark index during the period.

In October-December quarter (Q3FY21), Dr Lal Pathlab recorded an all-time-high quarterly revenue of Rs 452.4 crore in Q3FY21 backed by growth in non-Covid business. The contribution from Cvodi-19 & allied business in Q3FY21 was 21.6 per cent. The company said it had conducted 5.27 lakh Covid RTPCR tests in Q3FY21 and 1.03 million year to date till December 2020. RT-PCR test being conducted in 11 labs, it said.

Dr. Lal PathLabs provides diagnostic and related healthcare tests and services in India and internationally. The company has 216 clinical laboratories, including national reference lab at Delhi and regional reference lab at Kolkata; and 3,095 patient service centers and 6,995 pickup points.

Geojit Financial Services noted that the company’s core markets of North and East India regions have seen consistency in growth over the past few quarters. "The company is expected to continue improvement in its performance across all the operating regions. This growth is largely driven by increased testing partly owing to Covid but also owing to business expansion via expansion," it said.

"The company has made five acquisitions in the nine months of FY21. It is also looking to open more collection centers, and labs in strategic locations, especially in the West and South regions as it vies for a larger pie in these markets," the brokerage firm said in Q3FY21 results update.