Nomura reiterated its “Buy” rating on the stock and increased its price target to ₹2,085 from ₹2,000, implying an upside of nearly 12% from Friday’s closing price of ₹1,867.10.
The brokerage said Dr Lal PathLabs made a “strong start to FY27”, with the first-quarter earnings beat driven by higher realisations. It also raised its earnings estimates following the quarterly performance.
Nomura expects the company to trade at the upper end of its pre-COVID valuation range of 40-45 times one-year forward earnings, citing improving growth prospects and sustained margin expansion.
The brokerage highlighted that, beyond expanding its diagnostic network, Dr Lal PathLabs is investing in high-end diagnostic tests, radiology and international markets, while also keeping inorganic growth opportunities on the table.
The optimism follows the company’s June-quarter results, where revenue rose 19% year-on-year to ₹797.7 crore, while net profit increased 27% to ₹170.5 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 29% to ₹247.5 crore, with margin expanding to 31% from 28.7% a year ago.
Management also upgraded its FY27 revenue growth guidance to the mid-teens from the early teens, supported by healthy patient volume growth, better test mix, CGHS and ECHS price revisions, and continued traction across tier-II and tier-III markets.
The company recently acquired an 80% stake in Sunshine Healthcare in Ghana for ₹37.7 crore to strengthen its presence in West Africa and plans to add 12-15 laboratories and 3-4 radiology centres during FY27.
According to Bloomberg analyst recommendations, 25 of the 31 analysts covering the stock have a “Buy” rating, while three each recommend “Hold” and ‘Sell’. The consensus price target stands at ₹1,907.14, implying a modest upside of about 2% from Friday’s closing price.
After having made an intraday high of ₹1,894.9, shares of Dr. Lal Pathlabs are now trading 5.6% higher at ₹1,858.5. The stock has now extended its year-to-date advance to 23%.
