Dr Lal Path Labs plans more price hikes to ease margin squeeze

Dr Lal PathLabs, a leading diagnostic and pathology laboratory, made headlines earlier this year when it announced its first-ever price hike in February 2023.

The decision was aimed at improving the company's revenue per patient. Surprisingly, the price increase encountered minimal resistance, signalling positive prospects for the company's financial growth.

The company's ability to adapt to changing market dynamics and introduce value-added services has positioned it favourably in the highly competitive healthcare industry.

With a focus on continuous innovation and delivering exceptional patient care, Dr Lal PathLabs is poised to maintain its upward trajectory in terms of revenue and market share.

In an interactive with CNBC-TV18, Om Manchanda, managing director of Dr Lal PathLabs said the price hike marked a significant milestone for the company.

He said, "For the first time, we took a price increase in February, which is also positive news as we did not see much resistance coming back from the market. So, I would say that our ability to take price increase is much better now than what we were seeing earlier.”

However, the company did not specify what the hike will be or when it will take place.

Talking further about the price increase, Manchanda said one of the key factors contributing to the company’s ability to implement the price hike successfully was the introduction of bundled packages and changes in the service mix.

"So, whether we would be taking another price increase, probably not yet. This has just begun in the month of February. We would wait and watch how it goes. But obviously, some bit of rebalancing is already happening in terms of routine tests and high-end tests over a period, and we will continue to look at these areas as we go along,” he added.

Therefore, the successful implementation of the price hike and the positive response from patients indicate a promising future for Dr Lal PathLabs.

The company also reported a consolidated net profit decline of 7.5 percent to Rs 56.7 crore in the fourth quarter that ended March 31, 2022 — much lower than CNBC-TV18's poll of Rs 65.7 crore. The company had reported a net profit of Rs 61 crore for the January-March period a year ago.

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