Dr Lal Path Lab
-Diagnostic lab sector has huge opportunity size to grow.

-Dr Lal Path lab is the largest player, it enjoys 35% market share in organised market.

-Generate most of their revenue from B2C segment, where they have more pricing power as compare to b2b.

-Today they have total 216 labs.
-Looking at the number of labs they can add lot more + Health awareness of ppl can lead them to increase the volume growth.

-During q1 they have tested 3.5M patients and 7.9M samples

Good strategy for future growth. Using technology for superior experience for patients. Seems interesting.

Business was affected badly due to lockdown.

-During q1 revenue down 21%
Ebitda down 49% Pat down 52% (yoy)

-But we can expect descent set of nos in next quarter and double digit growth over next few years.

Interesting commentry in q1 concall from Dr Arvind Lal, Chairman.

They have taken steps to digitize entire patients journey, this will help them to do well than competitor.

Mcap-15kcr
-Solid roce + roe
-Debt free
-Last 5y sales growth 15%
-Last 5y profit growth 18%
-Superb cash flows,
-Paying good dividend
-Op margins r stable around 24%
-Cash rich, it has 759cr of cash +fd+mf
-Pro holds 56%, FII 20%, MF 9%
-All these r signs of a quality business

Challenges-
-Large market is unorgonized, Local players + hospitals have biggest market share + no strict rules. Big challenge.

Market share
-Standalone centres 48%
-Hospital based 37% n remaining
-15 goes to such diagnostic chains
-In this 15% space dr lal enjoy 35%market share

Market knows the business potential thats why the stock is trading at very expensive valuations. Look at the PE, ev/ebitda, ev/cfo etc.

I was reading about the company and found some interesting points, so sharing it only for info purpose.

Disc- No holding, No reco.

Thanks!