Dr Lal PathLabs reported a 9.8% year-on-year revenue growth for Q2 FY25, which was lower than expected. However, the EBITDA margin improved to 30.7%, surpassing forecasts.

The growth was mainly driven by the Swasthfit bundled test package, which saw a 25% increase in revenue contribution and now accounts for 24% of total revenue. Suburban operations also performed well, with an 11.6% growth and a margin increase to 20%, up 650 basis points year-on-year.

The company aims to prioritize volume growth and avoid price hikes in the near future. They have a cash balance of INR 10 billion, which may be used for mergers and acquisitions to expand their presence in southern India and other rapidly growing urban areas. Analysts have adjusted their FY25 and FY26 EBITDA estimates downward by approximately 4% and 5% respectively, reflecting a more moderate revenue growth outlook. ICICI Securities maintains a HOLD rating on the stock with a revised target price of INR 3,100.