Dr Lal Pathlabs
Dr Lal Pathlabs
Healthcare ServicesKey Fundamentals
SmallcapHealthcare Service ProviderHealthcare ServicesTapetide Score
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Key Insights
Strengths
2- Company is almost debt free.
- Company has been maintaining a healthy dividend payout of 36.4%
Weaknesses
2- Stock is trading at 13.4 times its book value
- The company has delivered a poor sales growth of 11.8% over past five years.
Growth Rate
AI Analysis — Bull vs Bear
Dr Lal PathLabs is a diagnostics chain with a market cap of about Rs 32,404 crore. It has been almost debt free and has earned a return on equity of about 22% steadily over 3, 5 and 10 years. The stock trades at 60.3x earnings and 13.13x book value, while sales grew at a compounded 11.8% over five years (14% TTM) and the stock returned only 1% CAGR over five years, compared with 22% over the past year.
- Return on equity has held steady at 21-22% across 1, 3, 5 and 10 year periods (22% last year, 21% over 5 years, 22% over 10 years), which points to durable capital efficiency.
- The company is almost debt free, so its balance sheet has room to fund expansion and acquisitions without leverage risk.
- Compounded profit growth over 3 years is 30%, well ahead of 3-year sales growth of 11%, which suggests operating leverage and margin recovery after the post-COVID normalisation.
- TTM sales growth of 14% is faster than the 3-year (11%) and 5-year (12%) sales CAGR, pointing to a recent pickup in revenue momentum.
- The dividend payout ratio has been healthy at 36.4%, reflecting strong free cash generation and a shareholder-friendly capital allocation policy.
- Over 10 years the company has compounded sales at 13% and profit at 15%, a record of consistent long-term growth.
- The stock has delivered a 22% return over the past year and a 17% CAGR over 3 years, showing that market sentiment has improved.
- At 60.3x earnings, the valuation is well above the TTM profit growth of 10%. That leaves little margin of safety if growth disappoints.
- Price-to-book of 13.13x is steep even allowing for ROE of about 22%, so the market is already pricing in sustained high returns.
- Five-year sales growth has been modest at 11.8%, which is relatively slow for a stock valued as a high-growth franchise.
- TTM profit growth of 10% trails TTM sales growth of 14%. This suggests margin pressure, possibly from competition, pricing or expansion costs.
- Five-year stock CAGR is only 1%, so shareholders who bought near the 2021 peak have seen almost no return. Valuation de-rating risk is real.
- Dividend yield is just 0.25% despite a 36.4% payout, which gives income-focused investors little cushion at the current valuation.
- Five-year profit CAGR of 12% is well below the 3-year figure of 30%. That flatters the recent trend because the base was depressed, and underlying long-run earnings growth is in the low teens.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Q4 net profit falls 15.2% Sep 24
Net profit fell 15.2% YoY to ₹131.3 crore in the March quarter, even though revenue grew 16.6% to ₹702.7 crore. Margins are under pressure.
- Soft FY26 volume growth Sep 24
FY26 volume growth was only 5.2%. Most of the ~12.2% revenue growth came from product and geographic mix, not test volumes.
- SN Genelab too small to move numbers Sep 24
Nomura says SN Genelab's FY26 revenue of ₹58 crore is only about 2% of Dr Lal's revenue, so the deal won't lift earnings right away.
- Ghana Sunshine Healthcare deal completed Sep 26
DLPL FZCO Dubai finished buying 80% of Accra-based Sunshine Healthcare for up to GHS 45.6 million (~₹38 crore), adding to its West Africa footprint. The target's revenue was ₹24.4 crore in FY26, up from ₹21.7 crore in FY24.
- SN Genelab deal fairly valued Sep 24
Brokerages call the price of about 16x FY26 EV/EBITDA reasonable. SN Genelab grew revenue 24% and EBITDA 31% a year over FY21-26 and runs at a 26-30% EBITDA margin.
- Western India and specialty tests boost Sep 24
The deal strengthens Dr Lal in western India, which brings in 14% of revenue. It also adds specialty testing in oncology, reproductive cytogenetics and rare genetic conditions.
- Target raised to ₹2,100 Sep 24
The Hindu BusinessLine report says the September 2027 target was raised 5% to ₹2,100 with a Buy rating (DCF, 48x FY28E P/E). It sees revenue/EBITDA CAGR of 15%/16% over FY26-29.
- Emkay sees FY27 margin expansion Sep 24
Emkay projects FY27 revenue of ₹3,165.5 crore, up about 15% YoY, with EBITDA margin improving to 28.8% from 28.3% in FY26.
- SN Genelab 70% stake terms Sep 24
Dr Lal will buy 70% of Gujarat-based SN Genelab for up to ₹168 crore upfront, plus an earn-out of up to ₹31.5 crore tied to performance milestones.
- Stock trading near ₹1,952 Sep 24
Shares were at ₹1,951.85 on NSE after the deal announcements, about 7.6% below the ₹2,100 target.
TL;DR: Dr Lal PathLabs is growing through small, reasonably priced acquisitions: SN Genelab adds specialty tests and western India reach, and Sunshine Healthcare expands its Africa business. Brokerages remain positive, with roughly 15% revenue growth expected and a ₹2,100 target. The main risks are the 15.2% YoY fall in Q4 profit and weak 5.2% volume growth, which show growth depends heavily on mix. The outlook depends on whether FY27 margins reach around 28.8% and the acquisitions start adding meaningfully to growth.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 541 | 601 | 539 | 545 | 602 | 660 | 597 | 603 | 670 | 731 | 660 | 703 | 798 |
| Expenses | 395 | 424 | 398 | 401 | 432 | 458 | 443 | 434 | 478 | 506 | 480 | 516 | 550 |
| Operating Profit | 146 | 178 | 141 | 145 | 170 | 202 | 154 | 169 | 192 | 224 | 179 | 187 | 248 |
| OPM % | 27% | 30% | 26% | 27% | 28% | 31% | 26% | 28% | 29% | 31% | 27% | 27% | 31% |
| Other Income | 14 | 18 | 18 | 18 | 21 | 22 | 25 | 26 | 28 | 25 | -6 | 24 | 32 |
| Interest | 8 | 8 | 7 | 7 | 6 | 6 | 5 | 5 | 5 | 5 | 7 | 6 | 6 |
| Depreciation | 35 | 36 | 36 | 37 | 35 | 35 | 36 | 36 | 35 | 40 | 42 | 45 | 44 |
| PBT | 118 | 152 | 116 | 120 | 150 | 183 | 138 | 153 | 181 | 204 | 124 | 160 | 229 |
| Tax % | 29% | 27% | 29% | 28% | 28% | 29% | 29% | -1% | 26% | 25% | 26% | 17% | 25% |
| Net Profit | 84 | 111 | 82 | 86 | 108 | 131 | 98 | 156 | 134 | 152 | 91 | 132 | 170 |
| EPS in Rs | 4.95 | 6.55 | 4.87 | 5.06 | 6.37 | 7.73 | 5.78 | 9.26 | 7.9 | 8.99 | 5.4 | 7.84 | 10.11 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 660 | 791 | 912 | 1,057 | 1,203 | 1,330 | 1,581 | 2,087 | 2,017 | 2,227 | 2,461 | 2,763 | 2,891 |
| Expenses | 504 | 582 | 675 | 793 | 910 | 987 | 1,145 | 1,526 | 1,527 | 1,617 | 1,764 | 1,979 | 2,053 |
| Operating Profit | 156 | 210 | 238 | 264 | 294 | 344 | 436 | 561 | 490 | 609 | 698 | 783 | 838 |
| OPM % | 24% | 26% | 26% | 25% | 24% | 26% | 28% | 27% | 24% | 27% | 28% | 28% | 29% |
| Other Income | 12 | 20 | 27 | 31 | 46 | 55 | 51 | 52 | 42 | 69 | 91 | 70 | 75 |
| Interest | 0 | 0 | 1 | 1 | 1 | 15 | 16 | 30 | 38 | 29 | 22 | 23 | 24 |
| Depreciation | 28 | 28 | 28 | 33 | 38 | 73 | 77 | 108 | 150 | 144 | 142 | 162 | 172 |
| PBT | 140 | 201 | 237 | 261 | 301 | 310 | 394 | 475 | 344 | 505 | 625 | 669 | 717 |
| Tax % | 31% | 34% | 34% | 34% | 33% | 27% | 25% | 26% | 30% | 28% | 21% | 24% | — |
| Net Profit | 96 | 133 | 156 | 172 | 200 | 228 | 296 | 350 | 241 | 362 | 492 | 510 | 546 |
| EPS in Rs | 8.75 | 7.99 | 9.31 | 10.24 | 11.95 | 13.55 | 17.49 | 20.69 | 14.33 | 21.42 | 29.14 | 30.13 | 32.34 |
| Div. Payout % | 9% | 15% | 16% | 22% | 25% | 44% | 57% | 29% | 42% | 0% | 41% | 68% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 55 | 83 | 83 | 83 | 83 | 83 | 83 | 83 | 83 | 83 | 84 | 168 |
| Reserves | 260 | 425 | 512 | 705 | 862 | 949 | 1,162 | 1,418 | 1,583 | 1,766 | 2,089 | 2,341 |
| Borrowings | 27 | 0 | 0 | 0 | 0 | 0 | 150 | 533 | 420 | 247 | 157 | 199 |
| Other Liabilities | 134 | 118 | 95 | 128 | 145 | 341 | 265 | 309 | 297 | 357 | 383 | 433 |
| Total Liabilities | 475 | 625 | 690 | 916 | 1,091 | 1,374 | 1,661 | 2,343 | 2,383 | 2,454 | 2,713 | 3,140 |
| Fixed Assets | 150 | 166 | 152 | 208 | 209 | 413 | 447 | 1,369 | 1,305 | 1,228 | 1,168 | 1,256 |
| CWIP | 1 | 4 | 18 | 10 | 3 | 11 | 10 | 15 | 5 | 6 | 3 | 7 |
| Investments | 38 | 64 | 106 | 145 | 185 | 164 | 59 | 65 | 150 | 114 | 327 | 423 |
| Other Assets | 286 | 391 | 414 | 554 | 694 | 786 | 1,144 | 893 | 923 | 1,107 | 1,215 | 1,454 |
| Total Assets | 475 | 625 | 690 | 916 | 1,091 | 1,374 | 1,661 | 2,343 | 2,383 | 2,454 | 2,713 | 3,140 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 122 | 159 | 171 | 197 | 219 | 284 | 398 | 447 | 456 | 535 | 569 | 636 |
| Investing | -113 | -163 | -137 | -172 | -100 | -26 | -212 | -449 | -287 | -24 | -303 | -422 |
| Financing | -1 | 0 | -32 | 13 | -55 | -190 | -139 | 136 | -283 | -414 | -334 | -264 |
| Net Cash Flow | 8 | -5 | 2 | 37 | 64 | 67 | 48 | 134 | -114 | 97 | -68 | -50 |
| Free Cash Flow | 87 | 115 | 120 | 125 | 177 | 205 | 339 | -28 | 412 | 479 | 516 | 463 |
| CFO/OP | 112 | 108 | 102 | 110 | 110 | 110 | 115 | 103 | 115 | 110 | 105 | 104 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 17 | 17 | 17 | 14 | 16 | 14 | 15 | 15 | 13 | 13 | 13 | 15 |
| Inventory Days | 37 | 31 | 33 | 44 | 40 | 70 | 39 | 38 | 28 | 30 | 27 | 30 |
| Days Payable | 90 | 89 | 97 | 106 | 111 | 144 | 132 | 107 | 127 | 151 | 127 | 123 |
| Cash Conversion Cycle | -35 | -42 | -47 | -47 | -55 | -60 | -78 | -54 | -87 | -108 | -86 | -79 |
| Working Capital Days | -9 | 27 | 19 | 17 | 0 | -19 | -26 | -54 | -56 | -46 | -30 | -29 |
| ROCE % | 48% | 47% | 43% | 38% | 35% | 32% | 33% | 29% | 18% | 25% | 29% | 28% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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63 extracted metrics + investor summaries across FY14–FY27.
Documents
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Company Information
Dr. Lal PathLabs Limited is one of India’s leading consumer healthcare brand in diagnostic services. It has an integrated nationwide network, where patients and healthcare providers are offered a broad range of diagnostic and related healthcare tests and services for use in: core testing, patient diagnosis and the prevention, monitoring and treatment of disease and other health conditions. The services of DLPL are aimed at individual patients, hospitals and other healthcare providers and corporates. [1]
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