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00:00 Ved Goel is joining us, the group CFO of Dr. Lal Path Labs.
00:03 Mr. Goel, thank you so much for speaking with us.
00:05 Let me come straight to what has excited the street perhaps as far as your numbers are
00:10 concerned which is your margins at 26.53%, better than estimates and your net profits
00:16 up about 51%.
00:19 Tell us where the sort of tailwinds are coming from.
00:23 Good morning.
00:25 Yes, we are happy to announce that the margins has, you know, decent margins this quarter.
00:33 There were two, three things which has, you know, one is of course our expansion overall
00:39 which is deeper in tier three and below has responded well.
00:44 Again, the growth for this quarter is 11%, 11.1%.
00:54 Then product mix has also gone up.
00:57 Our SWAS fit in this quarter is highest, 24% contribution from SWAS fit which is highest
01:03 ever.
01:04 So these two things has contributed and plus, you know, overall volume growth also if you
01:11 see is inching up compared to last quarter.
01:15 So we are confident that we are able to sustain these kind of numbers.
01:21 A good quarter in terms of higher testing.
01:26 You've also talked about how your EBITDA margins have been boosted, Mr. Goel, because of, you
01:32 know, sort of reduction in other expenses, your bundle testing is costing you less.
01:38 I just want to understand if these two things are sustainable.
01:41 First of all, the volume growth you've seen this quarter, is that a seasonally sort of
01:44 good quarter for you?
01:45 And will you be able to keep your expenses at the same levels?
01:48 Oh, yes.
01:50 I think we are confident to sustain these kind of growth and margin as well.
01:57 So we are saying, you know, there are two things.
02:01 One is obviously, overall efficiency, productivity and overall use of technology has given us
02:10 to increase and sustain our margins.
02:13 Second, this time we had some advantage because we took price increase last year, though in
02:20 this quarter only one month advantage.
02:22 But I think in spite of that, we are able to maintain those margins and we are continuing
02:30 those initiatives, which has further enhanced our productivity or overall efficiency in
02:36 the system.
02:37 Well, a couple of things I want to ask you about.
02:41 Your industry, of course, has low entry barriers and very favourable margins, which are very
02:45 obvious for all of us to see.
02:47 What does that mean in terms of market share and intensified competition?
02:51 I think that is a challenge that even market leaders like yourself could potentially be
02:55 facing.
02:56 And also from what I understand, your volume growth in your key markets has actually come
03:02 below historical averages.
03:04 So going into F525, can we expect any sort of price hikes?
03:10 If there are any, would you have the ability to do that?
03:13 And what sort of growth are we working with?
03:15 Because there is that competition that we cannot ignore at this stage.
03:21 So let me take this price.
03:23 We don't want to take further price hike.
03:26 In fact, our whole emphasis is growing by volume and that's the intent.
03:31 And we are in fact, if you see longer term, last 10 years, our growth in terms of price
03:38 is less than 2% even.
03:41 So we don't think we take another price hike.
03:45 Second, on these margins, we are very confident to sustain these kind of 27, 26 between these.
03:55 I think that is the margin we can sustain.
04:00 So the reason for this growth, which is our whole expansion, one is into our core geography
04:08 and to your point, our dependency on our Delhi NCR has reduced.
04:13 Make sure that you own your key markets.
04:15 Yeah.
04:16 So that is where Delhi NCR, where we are roughly 34%, 32% business is coming from Delhi NCR.
04:25 Now, which used to be very high.
04:28 And if you see in rest of North, which is growing faster and that's where the keys,
04:33 states like UP is, you know, giving good response and city like Kanpur, Allahabad, Varanasi,
04:40 we are going deeper.
04:41 And those are the market.
04:43 Similarly in East like Patna, you know, Rajshahi.
04:48 So overall East, including West Bengal is firing up.
04:51 So those are the areas we are going deeper.
04:55 And of course, in South and West selectively, we are expanding where we don't have much
05:00 in terms of B2C.
05:02 So white spaces where we are expanding selectively, but going deeper.
05:07 That is how we are, you know, going in terms of expansion geographically.
05:11 Adding any more cities, you've talked about the tier three and tier four.
05:15 What I also want to understand from you, any new geographies that will be coming up and
05:20 this new business, how much will that contribute to top line A, B lab expansions?
05:24 I know there's a long gestation period of that, but anything that you want to update
05:28 us on anything that's coming up on stream in the near term or an FY 25 first half?
05:35 So we are aggressively looking at expansion in terms of network, which is our collection
05:41 center.
05:42 So roughly we are adding around, you know, 400, 450 collection center in average for
05:48 last two or three years.
05:50 In BC specifically, we are very aggressive and we are targeting around nearly thousand
05:55 collection center.
05:57 And most of these collection center will be coming in our core geography and down the
06:01 pop data, which is like, you know, in tier three and plus areas.
06:08 Plus in South and West, obviously West is with suburban.
06:12 We are expanding footprints further, but not as thin as in North.
06:18 So there are cities like Bengaluru, city like Hyderabad, Mumbai, Pune, Goa.
06:25 These are focus cities where we are expanding our network in terms of, mostly in terms of
06:32 collection center.
06:33 Obviously we are opening 20, 25 labs every year.
06:36 Those are, will continue as it is.
06:39 Mr. Goyal, tell me about Swasth Fit.
06:44 That has been sort of a, you know, I would say a successful product for you, which is
06:49 your comprehensive fitness test and fitness, you know, product.
06:56 Tell us what the growth is over there and how you expect it to bring in better volumes.
07:03 I think this product has, you know, fantastically, you know, growth is more than the company
07:09 average growth.
07:11 And if you see, as I mentioned, 24% contribution in this quarter, which is highest on a yearly
07:17 basis, we are having 22% contribution from this product.
07:21 And I think as the practices, be it from the doctor's side, be it from the patient's side
07:28 are changing, people are opting more and more bundle test packages.
07:34 And I do see that in future, this contribution may go further.
07:39 And the growth is also, you know, better than our overall company average.
07:45 [Music]