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Dr Lal PathLabs to target strategic acquisitions, JVs and new market for growth

Dr Lal PathLabs, an established brand is provider of diagnostic and healthcare related tests and services in India. The company through its integrated, nationwide network offer a broad range of diagnostic and related healthcare tests and services to patients and healthcare providers for use in core testing, patient diagnosis and the prevention, monitoring and treatment of disease and other health conditions.

Dr Lal PathLabs has built a national, “hub and spoke” network which includes their National Reference Laboratory in New Delhi, Pan-India integrated coverage with 176 labs, 1592 PSCs, 7300+ PUPs, as at end of December 2015. “Hub and Spoke” model of the company state where specimens are collected across multiple locations within a region for delivery to a pre designated clinical laboratory for centralized diagnostic testing, provides greater economies of scale and offers a scalable platform for the continued growth of their business. Their network is present across India, including large cities such as New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata. The centralized information technology platform fully integrates their large network through a common logistics and payments and tracks its operations and internal performance metrics, thereby enabling to improve efficiencies of their business.

Talking about Dr Lal PathLabs expansion plans, the company is currently following a strategy to strengthen their presence in regions with a particular emphasis on core markets of North India as well as Central and Eastern India. In North India, Dr Lal PathLabs intends to further strengthen its position by opening new franchised patient service centres. In Central and Eastern India, the company intends to expand through the construction of regional reference laboratories, including a large regional reference laboratory in Kolkata, combined with the opening of additional smaller clinical laboratories and several new, complementary patient service centres. Dr Lal PathLabs also plans targeted expansion in Southern and Western India by opening additional clinical laboratories and patient service centres.

In addition to it, Dr Lal PathLabs will continue to explore expansion opportunities in overall India, including through strategic acquisitions of regional diagnostic healthcare service providers who possess brand recognition among an existing patient base and healthcare providers. Dr Lal PathLabs will also continue to seek strategic partnerships with key franchisees and hospitals to help sustainably support their future growth.

Coming to CSR initiatives taken by Dr Lal PathLabs, the company shall include the following activities: Vocational education programmes in the healthcare delivery for phlebotomists, technicians and other similar vocations; preventive health check up camps in underprivileged areas; promoting access to healthcare, including awareness programmes, building awareness for healthier and hygienic living, cancer detection and disease prevention in general; uplift of community through supporting projects for natural resource conservation; drive environmental sustainability through plantation drives, protection of flora and fauna, promoting bio diversity, animal welfare and veterinary services, promoting alternative sources of energy and similar projects; contribution of funds to technology incubators located within academic institutions which are approved by the Central government for the development of diagnostics tests.

The healthcare sector, particularly the diagnostic sector, still largely remains untapped and un touched area. Diagnostic sector in India is growing at the rate of 16 – 17% annually.

Some of key demand drivers for the Indian diagnostic industry are:

Increase in evidence-based treatments
Huge demand-supply gap
Changing disease profiles
Increase in health insurance coverage
Need for greater health coverage as population and life expectancy increase
Rising income levels make quality healthcare services more affordable

The size of the diagnostics industry was at around Rs 377 billion in 2014-2015. The diagnostics industry is to continue to grow by a CAGR of 16%-17% over the next three years to over Rs 600 billion by 2017-2018.

Inputs by Dr. Om Manchanda, CEO and Mr. Dilip Bidani, CFO, Dr Lal PathLabs
Aparna Agarwal
Account Executive – Capital Market Communications Practice

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