Buy, Sell or Hold: Global brokerage firm Citi has upgraded Dr Lal PathLabs to a “Buy” rating, signifying a positive outlook for the diagnostic major in the medium term. At the same time, Citi has upgraded the target price for the stock to Rs 1650 from Rs 1450.
Awareness of the importance of health is increasing in these cities. In addition to it, the standard of living is improving. Therefore, the company is experiencing strong tailwinds from the demand side.
Another significant factor highlighted by the brokerage firm was the increasing contribution from speciality tests and preventive healthcare packages, especially the popular Swasthfit packages. These categories tend to attract better realisations and margins.
On the profitability side, Citi expects EBITDA margins to remain healthy at 28 per cent to 29 per cent. This is underpinned by operating leverage, cost efficiencies, and a favourable test mix.
The asset-light model and centralised processing capabilities continue to underpin margin resilience as they build out operations in new geographies.
Another notable aspect remains the financial strength of the organisation. Dr Lal PathLabs has a healthy cash position of around Rs 14 billion along with a debt-free balance sheet.
This gives a significant amount of flexibility to pursue strategic acquisitions in inorganic growth opportunities, especially in a fragmented industry where consolidation potential remains high.
Citi believes this balance sheet strength not only de-risks the business but also positions the company to capitalise on emerging opportunities without compromising financial stability.
At the time of writing this report (11 AM), the shares of Dr Lal Pathlabs were down by 0.43 per cent to trade at Rs 1320.00. The previous closing scrip was Rs 1325.75.
Diagnostic major Dr Lal PathLabs Limited reported a sharp decline in its standalone PAT for the quarter ended 31 December 2025 (Q3FY26), as rising costs, lower volumes and operational pressures weighed on earnings.
While the company maintained stable revenue performance in a challenging healthcare environment. The company’s net profit fell 12 per cent year-on-year to Rs 91.4 crore in Q3 FY26.
The company has reported a net profit of Rs 105 crore in the corresponding quarter in the previous fiscal.
The company’s revenue increased 11 per cent year-on-year to Rs 660 crore, compared with Rs 595.7 crore in the corresponding quarter last year.
Operating performance also strengthened, with EBITDA rising 17.3 per cent to Rs 179 crore, up from Rs 152 crore in the year-ago period.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
