Dr Lal PathLabs reports decline in profit for quarter ending March

BENGALURU (Reuters) – India’s Dr. Lal Bathlabs on Thursday reported a sixth straight drop in its quarterly profit, as income from coronavirus-related testing continued to outpace growth in its core business.

The medical diagnostics company, India’s largest by revenue, reported a consolidated net profit of 567 million rupees ($6.93 million) in the three months to March 31, down from 613 million rupees a year earlier.

EBITDA margin contracted to 23.6% from 24.9% a year ago.

Dr. Lal Path Labs is the first among her peers to report the findings and will set the tone for an intensely competitive industry that saw windfall gains during the pandemic but has since declined sharply.

Shares of the company and its listed competitors Metropolis Healthcare, Thyrocare Technologies and Vijaya Diagnostic Center are down between 45% and 68% from their all-time highs in 2021, as of their last close.

Since then, analysts have set their sights on the companies’ ability to expand their testing and geographic reach, noting that Dr. Lal Pathlab is the best among its competitors for long-term growth.

For more than a year, the company, which has a strong presence in north and east India besides its base in New Delhi, has sought to expand into smaller cities and other regions of the country through acquisitions.

Revenue grew by just 1.1% to Rs 4.91 crore, with non-COVID contributing nearly 98% of the total.

Revenue from coronavirus and related sectors fell to just 110 million rupees, from 660 million rupees in the previous year.

Shares of Dr. Lal Pathlab fell 3.2% to Rs 1,888.10 after the results were announced.

($1 = 81.7800 Indian Rupees)

(Reporting by Nandan Mandayam in Bengaluru; Editing by Sonia Cheema)