DLPL posted a robust quarter, with revenue growing 11% YoY on the back of sample volume increasing 9% YoY and Swasthfit contributing 24% to the topline. DLPL’s focus and execution prowess on expanding its presence in Tier 3+ cities (bulk of expansion) is likely to support its high single-digit revenue growth in core markets (Delhi NCR). With pricing pressures abating, DLPL remains well positioned to capture the structural tailwinds enjoyed by the Indian healthcare industry, in line with our thesis (link). Suburban’s improving margin trajectory (Q4: 17%) is likely to offset network & brand investments, keeping margin flat over FY24-26E. Strong balance sheet (net cash of Rs8.7bn), and improving return ratios provide comfort on valuations.
OutlookWe retain BUY with Mar-25E TP of Rs2,800/share (basis DCF), implying FY26E PER of 48x.
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