Dr Lal Pathlabs To Open 20 Hubs In Tier 3 Cities | NDTV Profit - video Dailymotion

NDTV Profit

Watch Dr Lal Pathlabs To Open 20 Hubs In Tier 3 Cities | NDTV Profit - NDTV Profit on Dailymotion

Transcript

00:00 Ved Goel is joining us, the group CFO of Dr. Lal Path Labs.

00:03 Mr. Goel, thank you so much for speaking with us.

00:05 Let me come straight to what has excited the street perhaps as far as your numbers are

00:10 concerned which is your margins at 26.53%, better than estimates and your net profits

00:16 up about 51%.

00:19 Tell us where the sort of tailwinds are coming from.

00:23 Good morning.

00:25 Yes, we are happy to announce that the margins has, you know, decent margins this quarter.

00:33 There were two, three things which has, you know, one is of course our expansion overall

00:39 which is deeper in tier three and below has responded well.

00:44 Again, the growth for this quarter is 11%, 11.1%.

00:54 Then product mix has also gone up.

00:57 Our SWAS fit in this quarter is highest, 24% contribution from SWAS fit which is highest

01:03 ever.

01:04 So these two things has contributed and plus, you know, overall volume growth also if you

01:11 see is inching up compared to last quarter.

01:15 So we are confident that we are able to sustain these kind of numbers.

01:21 A good quarter in terms of higher testing.

01:26 You've also talked about how your EBITDA margins have been boosted, Mr. Goel, because of, you

01:32 know, sort of reduction in other expenses, your bundle testing is costing you less.

01:38 I just want to understand if these two things are sustainable.

01:41 First of all, the volume growth you've seen this quarter, is that a seasonally sort of

01:44 good quarter for you?

01:45 And will you be able to keep your expenses at the same levels?

01:48 Oh, yes.

01:50 I think we are confident to sustain these kind of growth and margin as well.

01:57 So we are saying, you know, there are two things.

02:01 One is obviously, overall efficiency, productivity and overall use of technology has given us

02:10 to increase and sustain our margins.

02:13 Second, this time we had some advantage because we took price increase last year, though in

02:20 this quarter only one month advantage.

02:22 But I think in spite of that, we are able to maintain those margins and we are continuing

02:30 those initiatives, which has further enhanced our productivity or overall efficiency in

02:36 the system.

02:37 Well, a couple of things I want to ask you about.

02:41 Your industry, of course, has low entry barriers and very favourable margins, which are very

02:45 obvious for all of us to see.

02:47 What does that mean in terms of market share and intensified competition?

02:51 I think that is a challenge that even market leaders like yourself could potentially be

02:55 facing.

02:56 And also from what I understand, your volume growth in your key markets has actually come

03:02 below historical averages.

03:04 So going into F525, can we expect any sort of price hikes?

03:10 If there are any, would you have the ability to do that?

03:13 And what sort of growth are we working with?

03:15 Because there is that competition that we cannot ignore at this stage.

03:21 So let me take this price.

03:23 We don't want to take further price hike.

03:26 In fact, our whole emphasis is growing by volume and that's the intent.

03:31 And we are in fact, if you see longer term, last 10 years, our growth in terms of price

03:38 is less than 2% even.

03:41 So we don't think we take another price hike.

03:45 Second, on these margins, we are very confident to sustain these kind of 27, 26 between these.

03:55 I think that is the margin we can sustain.

04:00 So the reason for this growth, which is our whole expansion, one is into our core geography

04:08 and to your point, our dependency on our Delhi NCR has reduced.

04:13 Make sure that you own your key markets.

04:15 Yeah.

04:16 So that is where Delhi NCR, where we are roughly 34%, 32% business is coming from Delhi NCR.

04:25 Now, which used to be very high.

04:28 And if you see in rest of North, which is growing faster and that's where the keys,

04:33 states like UP is, you know, giving good response and city like Kanpur, Allahabad, Varanasi,

04:40 we are going deeper.

04:41 And those are the market.

04:43 Similarly in East like Patna, you know, Rajshahi.

04:48 So overall East, including West Bengal is firing up.

04:51 So those are the areas we are going deeper.

04:55 And of course, in South and West selectively, we are expanding where we don't have much

05:00 in terms of B2C.

05:02 So white spaces where we are expanding selectively, but going deeper.

05:07 That is how we are, you know, going in terms of expansion geographically.

05:11 Adding any more cities, you've talked about the tier three and tier four.

05:15 What I also want to understand from you, any new geographies that will be coming up and

05:20 this new business, how much will that contribute to top line A, B lab expansions?

05:24 I know there's a long gestation period of that, but anything that you want to update

05:28 us on anything that's coming up on stream in the near term or an FY 25 first half?

05:35 So we are aggressively looking at expansion in terms of network, which is our collection

05:41 center.

05:42 So roughly we are adding around, you know, 400, 450 collection center in average for

05:48 last two or three years.

05:50 In BC specifically, we are very aggressive and we are targeting around nearly thousand

05:55 collection center.

05:57 And most of these collection center will be coming in our core geography and down the

06:01 pop data, which is like, you know, in tier three and plus areas.

06:08 Plus in South and West, obviously West is with suburban.

06:12 We are expanding footprints further, but not as thin as in North.

06:18 So there are cities like Bengaluru, city like Hyderabad, Mumbai, Pune, Goa.

06:25 These are focus cities where we are expanding our network in terms of, mostly in terms of

06:32 collection center.

06:33 Obviously we are opening 20, 25 labs every year.

06:36 Those are, will continue as it is.

06:39 Mr. Goyal, tell me about Swasth Fit.

06:44 That has been sort of a, you know, I would say a successful product for you, which is

06:49 your comprehensive fitness test and fitness, you know, product.

06:56 Tell us what the growth is over there and how you expect it to bring in better volumes.

07:03 I think this product has, you know, fantastically, you know, growth is more than the company

07:09 average growth.

07:11 And if you see, as I mentioned, 24% contribution in this quarter, which is highest on a yearly

07:17 basis, we are having 22% contribution from this product.

07:21 And I think as the practices, be it from the doctor's side, be it from the patient's side

07:28 are changing, people are opting more and more bundle test packages.

07:34 And I do see that in future, this contribution may go further.

07:39 And the growth is also, you know, better than our overall company average.

07:45 [Music]

Dr Lal Pathlabs To Open 20 Hubs In Tier 3 Cities | NDTV Profit

Category

Transcript

Recommended