Q1 results: Dr Lal PathLabs' health improves

Better margins and focus on cost rationalisation to drive earnings

Dr Lal PathLabs’ improved performance for the June quarter (Q1) comes as a respite, especially after a weak second half in FY17, which was impacted by demonetisation, increased competition and higher expansion-led costs. Thus, a 12 per cent increase in revenue in Q1, fuelled by about a nine per cent growth in volumes and margins, was impressive. 

But, will the trend continue? Analysts are optimistic but with some caution.With its focus on expanding the business and competition remaining high, the company is working on optimising costs and increasing productivity from the current in-house network. This is crucial, given the headwinds in