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Buoyed by strong results, Dr Lal Pathlabs pitches for capital, PPP model

Dr Lal Pathlabs Executive Chairman Arvind Lal believes India’s healthcare policy needs incentives from the government akin to strategies employed in other sectors, especially on the semiconductor front.

Lal said: “They need to incentivise private people. Give them a special status, like they have to semiconductors. Why not recognise healthcare as a good industry, in which the government can help us in many ways.”

On the lessons learned from the pandemic, Lal said it compelled the firm to radically re-evaluate operational strategies and develop innovative approaches that made them a frontline player in Covid-19 testing.

“We were one of the first labs to be asked by the ICMR (Indian Council of Medical Research) to start testing. And in less than two years, we expanded that to 20 labs in India, where we were doing the RT-PCR, and in the year 1921, we did nearly 35 lakh RT-PCR tests.”

On constraints to the advancement of the healthcare sector, Lal underscored the need for capital and a comprehensive public-private-partnership (PPP) model where the private sector’s expertise and vast reach complement the government’s efforts.

“The government has never used the private arm, which is the biggest in private practice; nearly 70% of patients in India are seen by private people. We can share our experiences with the government.”

On expanding Dr Lal’s presence in southern markets, Dr Om Manchanda, Managing Director of the firm, emphasised a dual strategy of organic and inorganic routes.

While his first preference remains organic growth to build a robust presence and deeper foothold, Manchanda doesn’t discount the inorganic route for expansion.

When questioned about specific acquisition targets, he maintained that evaluations are ongoing. “We continue to evaluate all the time and right now there’s nothing I can share,” Manchanda said.

Dr Lal PathLabs reported a 53% year-on-year (YoY) rise in consolidated net profit at ₹81 crore in the third quarter that ended December 31, 2023, compared to ₹52.8 crore in the corresponding quarter of last year.

The healthcare company’s revenue jumped 10% to ₹5,389 crore in Q3FY24, compared to ₹4,894 crore in Q3FY23.

Shares of Dr Lal Pathlabs had settled at ₹2,535.65 a piece, down about half a percent in trade on Friday. CNBCTV18

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