Accumulate Dr. Lal PathLabs; target of Rs 1009: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dr. Lal PathLabs

DLPL's revenue, adj. EBITDA and PAT grew 14%, 11% and 13% YoY respectively in Q2FY19 and in line with our estimates in margin and earnings. With strong cash flow and growth in new customers and packaged offer, the company expects to maintain current growth in FY19E. The expansion of bundle-test offer and gradual ramp up of central lab in Kolkata (KRL) to improve further volume addition in FY19E and FY20E. Management expects competitive intensity to remain strong with price war, regulatory interference and expected price ceiling of government. DLPL remain confident of its brand power, service quality, high-end test capability, network of collection centers and KRL to drive volume growth and profitability in FY18-20E.

Outlook

We maintain "Accumulate" and retain TP at Rs1009