Dr Lal PathLabs readies a war chest for southern push as CFO Goel flags potential big‑ticket M&A, new bets in radiology and genomics

Dr. Lal PathLabs is lining up a decisive acquisition drive to consolidate India’s hyper‑local diagnostics market, with Group CFO and International CEO Ved Goel signalling that the company is now “a little bit aggressive” on targets—especially in the South—after four years of post‑Suburban integration. “There are assets where we don’t want to create our own; we can take something readily available,” he said, adding that pressure on several regional chains should nudge promoters to “join hands with someone like us.” The balance sheet gives him room to move. Lal PathLabs is sitting on about Rs 1,400 crore of net cash and no debt, and can blend cash with equity, if a compelling platform emerges, Goel said. Goel says that, unlike the Suburban acquisition, which came during the Covid pandemic, when diagnostic company valuations had hit the roof, valuations are now more or less realistic. Lal acquired Mumbai-based Suburban Diagnostics in October 2021, at an enterprise value of Rs 925 crore. Suburban's margins lag Dr Lal's core (27-28 percent) due to its pre-acquisition focus on lower-margin business-to-business (B2B) volumes in competitive Mumbai and Western markets, with higher fixed costs and less premium test mix. Goel says the strategic logic for deals is straightforward. Diagnostics remains fragmented, talent is scarce, and scale confers advantages in technology, turn‑around time and menu breadth. Analysts see that shift as a re‑rating trigger. UBS notes that Lal is actively exploring inorganic opportunities—small chains in the South and standalone labs in core micro‑markets—and calls M&A a “strong re‑rating catalyst” alongside improving operating metrics and the prospect of calibrated price hikes after a three‑year pause. The brokerage highlights steady volume‑led growth, with bundled packages (SwasthFit) lifting samples per patient and margins recovering toward the upper end of management’s 27–28 percent comfort band. Goel’s shopping list is broader than pure pathology. The company has quietly piloted high‑end radiology in Delhi and is now opening a third centre, having overcome the historical constraints of talent availability and unit economics. Expansion will remain calibrated—two to three new centre a year initially—but the early performance has given management “confidence and interest in radiology,” which also widens the aperture for deals in integrated pathology‑radiology platforms common in southern India. On genomics and precision medicine, Lal is investing Rs.100 crore in a strategically located precision lab in Delhi NCR—Rs.75 crore for the property and another Rs.20–25 crore to commission the facility—designed to anchor oncology‑focused, panel‑driven testing and liquid biopsies at national scale. “This is very, very strategic,” Goel said, underscoring the long‑cycle bet on personalised therapies and doctor‑led demand. The push complements the company’s Genevolve division and first‑in‑India esoteric additions showcased in its investor deck. Under the hood, Lal’s operating engine has re‑accelerated. The company reported Q3 FY26 revenue of Rs 660 crore, up 10.6 percent year‑on‑year, with EBITDA before exceptionals at Rs.179 crore (27.2 percent margin) and SwasthFit the company's tailor-made packaged testing offering contributing 26 percent of year-to-date revenue; nine‑month revenue grew 10.8 percent to Rs 2,060 crore. Management stresses the growth is largely volume‑led—11–12 percent without price increases as network expansion and channel incentives kick in—while Delhi NCR has returned to double‑digit growth after years of mid‑single digits. Looking ahead, UBS projects FY26 revenue at Rs 2766.3 crore with EBITDA (proxied by EBIT) of Rs 648.7 crore, rising to Rs 3107.7 crore and Rs 750 crore in FY27, as utilization, product mix and moderate pricing tailwinds accrue Goel frames it as a capital‑and‑capability match: financial firepower after deleveraged years, management bandwidth post‑integration, and a wider scope—radiology, genomics, and preventive health formats like the newly launched premium centres—to deepen share of patient journeys. “Now it’s high time for us,” he said, adding that normalized valuations should help Lal avoid the peak‑cycle multiples paid during the Suburban deal.