Dr. Lal Path Labs Ltd.

Arvind Lal

Executive Chairman

Om Prakash Manchanda

Managing Director

Bharath U

Chief Executive Officer

Ved Prakash Goel

Group Chief Financial Officer

Shankha Banerjee

CEO Suburban and other group companies

Rajat Kalra

Company Secretary and Head of Investor Relations

14%

e Indian diagnostic industry is undergoing a transformation and is estimated to grow at a CAGR of 14% over the next five years. With very few barriers of entry, it makes a great ground for new entrant

rs,

ars. With very few barriers of entry, it makes a great ground for new entrants that include investors, entrepreneurs, and innovators. To remind you all, when COVID-19 pandemic hit in 2020, we were amo

32 lakh

private labs to be approved by ICMR for COVID-19 RT-PCR testing. And last year, we performed over 32 lakhs COVID-19 RT-PCR tests. We have continued to serve our patients in the best possible manner even w

65%

ol the epidemic of non-communicable diseases or lifestyle diseases that are responsible for nearly 65% deaths in India. For this to take place, we shall further increase our organic network expansion,

Rs. 400 crore

s like home collections, walk-ins, hospital pickups, etc. Last year, COVID-19 contributed nearly Rs. 400 crore to the Company top-line. That was roughly about 19% of the Company turnover of which nearly 55% th

19%

st year, COVID-19 contributed nearly Rs. 400 crore to the Company top-line. That was roughly about 19% of the Company turnover of which nearly 55% that is Rs. 221 crore came from 1st Quarter of FY22. F

55%

crore to the Company top-line. That was roughly about 19% of the Company turnover of which nearly 55% that is Rs. 221 crore came from 1st Quarter of FY22. From the current quarter that is Q2 onwards,

Rs. 221 crore

Company top-line. That was roughly about 19% of the Company turnover of which nearly 55% that is Rs. 221 crore came from 1st Quarter of FY22. From the current quarter that is Q2 onwards, this overhang of large

6.9 million

this call today. I will now take you through all the business highlights. In Q1 FY23, we served 6.9 million patients generating revenue of Rs. 503 crore. As you are all aware that the COVID-19 wave has abet

Rs. 503 crore

ugh all the business highlights. In Q1 FY23, we served 6.9 million patients generating revenue of Rs. 503 crore. As you are all aware that the COVID-19 wave has abetted significantly and as a consequence, reve

Rs. 21 crore

D-19 wave has abetted significantly and as a consequence, revenue from COVID-19 and allied test is Rs. 21 crore for Q1 Classification: Restricted with a contribution of 4% to

4%

crore for Q1 Classification: Restricted with a contribution of 4% to overall revenue. This is in contrast to 36% contribution in last year, same quarter and also th

“Meanwhile, the Indian diagnostic industry is undergoing a transformation and is estimated to grow at a CAGR of 14% over the next five years.”

“Going forward, we will continue to build and drive growth through the following: 1) Organic expansion of labs and collection centers infrastructure 2) Through inorganic expansion route 3) Use of technology to enhance customer experience and also provide value- added services at one level and drive internal process efficiencies at another level to achieve productivity On organic front, the initiative of creation of Hub Labs has started yielding good results especially in northern part of India.”

“Similarly, I do see in super-specialty business, we plan to focus on segments like Oncology, Autoimmune Disorders, etc.”

“We expect CC network to service all types of customers like home collections, walk-ins, hospital pickups, etc.”

“And we hope to stay focused on more stable part of the business that is non-COVID business going forward from here.”

“Just wanted to know, if you hold on to this year’s guidance of mid-teen revenue growth, which was given last quarter.”

“Manchanda: We probably have not, in so many terms given the guidance, because one doesn't know the trajectory of COVID business.”

“Like this month, there has been a new pharma player who has announced their plan to join the business as we speak, there are now three pharma players along with many others.”

“And I think probably we didn't anticipate that within three months, this decline of 90% would happen.”

“This is a public hospital so obviously it was not very clean and all, not the kind of thing you would expect when you go to say Suburban, but the number of patients there is amazing.”

Dr. Om P. Manchanda

47

Ved Prakash Goel

12

Moderator

9

Bharath Uppiliappan

8

Prakash Agarwal

8

Sriram Rathi

6

Dheeresh Pathak

6

Shaleen Kumar

5

Sayantan Maji

5

Shyam Srinivasan

4

Siddharth Rangnekar

Good evening, everyone and welcome to Dr. Lal PathLabs’ Q1 FY23 Earnings Conference Call. Today we are joined by senior members of the Management team, including: o (Hony) Brig. Dr. Arvind Lal – Executive Chairman o Dr. Om Prakash Manchanda – Managing Director o Mr. Bharath U – CEO o Mr. Ved Prakash Goel – Group CFO o Mr. Shankha Banerjee – CEO Suburban and other group companies o Mr. Rajat Kalra – Company Secretary and Head of Investor Relations Standard Disclaimer: Some of the statements made on today’s call could be forward-looking in nature, and the actual results could vary from these forward- looking statements. A detailed update in this regard is available in the results presentation, which has been circulated to you and is also available on the stock exchange websites. I would now like to invite (Hony) Brig. Dr. Arvind Lal to share his perspectives. Thank you. (Hony) Brig. Dr. Arvind Lal: Thank you. A very good evening and a warm welcome to everyone present on the call. We are

Dr. Om P. Manchanda

Thank you. Welcome everyone to Dr. Lal PathLabs Q1 FY23 Earnings Call. I hope you and your loved ones are safe and healthy. I will talk to you about the current trends as well as strategic focus of Dr. Lal PathLabs. The Indian healthcare sector, particularly the diagnostic phase, holds significant growth potential as was evident by the response of the industry through the pandemic. And organized national brands like ours have met these challenges without raising prices. The industry has seen entry of many new Classification: Restricted players, I foresee growth of organized sector, both due to overall market growth as well as accelerated shift from unorganized to organized segment. Our customers appreciate the certainty of quality and effectiveness that Dr. Lal PathLabs provides, which the unorganized players will not be able to successfully deliver. Going forward, we will continue to build and drive growth through the following: 1) Organic expansion of labs and collection centers infr

Bharath Uppiliappan

Thank you. I warmly welcome you all to this call today. I will now take you through all the business highlights. In Q1 FY23, we served 6.9 million patients generating revenue of Rs. 503 crore. As you are all aware that the COVID-19 wave has abetted significantly and as a consequence, revenue from COVID-19 and allied test is Rs. 21 crore for Q1 Classification: Restricted with a contribution of 4% to overall revenue. This is in contrast to 36% contribution in last year, same quarter and also the lowest in last two years. Our non-COVID revenue of Rs. 482 crore registered a robust growth of 25% over Q1 last year. This growth in non-COVID revenue is led by patient volumes which registered a growth of 15%. The tests of patient for the quarter was 2.6, the highest ever for the Company. This quarter was marked by strong market activation program across our B2B and B2C channels. Our product and activation innovation has led to a robust growth on our SwasthFit bundled test program contributing t

Ved Prakash Goel

Hello everyone and thank you for joining this call. I trust each of you and your families are safe and healthy. Please note that Q1 FY23 includes Suburban results, hence not strictly comparable with previous year, same quarter. We clocked highest quarterly non-COVID revenue of Rs. 482 crore, a growth of 25%. Our dependence on COVID-19 revenue has significantly reduced due to COVID-19 revenue declining by 91% from Rs. 221 crore to Rs. 21 crore in this current quarter. Though our non-COVID revenue increased by 25%, reduction in COVID business by Rs. 200 crore as compared to last year resulted in overall decline of 17%. Total revenue came in at Rs. 503 crore versus Rs. 607 crore last year same quarter. As Dr. Om mentioned that out of total COVID-19 business of Rs. 396 crore in FY22, almost 55% business was in Q1 only. Revenue realization per patient for Q1 FY23 is Rs. 727 as against Rs. 860 last year same quarter. The lower realization is due to sharp reduction in COVID-19 and allied test

Pooja Bhatia

Dr. Om P. Manchanda: We probably have not, in so many terms given the guidance, because one doesn't know the trajectory of COVID business. Now it's becoming a little clearer so we are not focused on COVID at all, because we still don't know how it's going to pan out for the year. The focus for our teams has been on non-COVID part of the business. And as the current quarter indicates, we have done 15% ex-Suburban and including Suburban, we have done 25%. But one must keep in mind that last year, there are many months which are softer, many months which are very high, because of uneven trajectory of non-COVID. So, if I go by month-by-month, April, May of last year were a softer but then July, August was a little higher. After that, again, it goes down from I think November onward till at least February. Classification: Restricted So, our best estimate is we will still try to maintain that. It’s very difficult currently to put a number. But we are still very confident that we should fall

Pooja Bhatia

On the acquisition front M&A, what are the assets that would potentially interest you? Has there been any moderation in valuations that you are seeing? And is there anything in consideration at this moment?