On a consolidated basis, Dr Lal Path Labs net profit jumped 10.56% to Rs 96.30 crore on a 15.39% surge in revenue from operations to Rs 498.40 crore in Q2 September 2021 over Q2 September 2020.
The COVID-19 and allied contributed 10.1% to revenue in Q2 FY22 with 4.7 lakh RT-PCR tests.
On a consolidated basis, normalised EBITDA grew 13.1% to Rs 152.20 crore in Q2 FY22 as against Rs 134.70 crore in Q2 FY21. Normalised EBITDA margins stood at 30.5% in Q2 September 2021 over 31.2% in Q2 September 2020. Profit margins was at 19.3% in Q2 FY22 from 20.2% in Q2 FY21.
Separately, Dr Lal PathLabs (LPL) announced the 100% equity acquisition of Suburban Diagnostics (India) in an all cash deal for an enterprise value of 18.5x of FY22 audited EBITDA subject to a floor of Rs 925 crore and a cap of Rs 1,150 crore. The acquisition shall be funded through the existing cash reserves of LPL. Dr Sanjay Arora, the founder of Suburban Diagnostics, shall join LPL as Group Medical Director.
Western India Region is a strategic priority for LPL. Suburban Diagnostics is a platform acquisition for LPL - A platform to leverage Suburban's strong consumer and medical brand recognition, wide network and professional management team to further accelerate its growth trajectory as well as have access to 44 laboratories and Diagnostics centres (one of which is CAP accredited and five are NABL accredited) and 150+ collection centres.
The revenues of Suburban Diagnostics stood at Rs 294 crore in FY 21 with EBITDA of Rs 57.50 crore. The acquisition is expected to be closed within one month. Dr Lal PathLabs revenue contribution from West region is said to go up from 10% to 24%, post-acquisition basis FY21. Greater Mumbai cluster shall be the second highest revenue contributor at 14% after Delhi-NCR.
Dr Sanjay Arora, the founder of Suburban Diagnostics (India), said, "One of my missions has been to unburden healthcare and add value to medical outcomes. By coming together with DLPL, I will get the right platform to make this impact at a national level. The core of any healthcare organization is to add medical value while continuing to drive good governance and positive commercial success. As a medical professional, I will be able to concentrate on adding value to medical outcomes. This association with DLPL allows us to play to our strengths while continuing to add value to society."
(Hony) Brig. Dr Arvind Lal, the executive chairman of Dr Lal PathLabs, stated, "Our joining hands with Suburban Diagnostics is a significant step in LPL's endeavor to expand our footprint in Western India. I am confident that our combined strengths and a similar DNA of both the companies- led by doctor promoters, will lead to new heights in serving our customers across Western India."
Meanwhile, (Hony) Brig. Dr. Arvind Lal has been reappointed as the executive chairman and whole-time director for a period of five years, commencing from 1 April 2022.
Shares of Dr Lal Path Labs rose 0.85% to Rs 3,584.10 on BSE. Dr Lal PathLabs provides diagnostic healthcare services in India.
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