⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
LALPATHLAB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | LALPATHLAB | Market Cap | 23,974 Cr. | Current Price | 1,430 ₹ | High / Low | 1,771 ₹ |
| Stock P/E | 44.7 | Book Value | 140 ₹ | Dividend Yield | 0.84 % | ROCE | 30.6 % |
| ROE | 24.7 % | Face Value | 10.0 ₹ | DMA 50 | 1,452 ₹ | DMA 200 | 1,488 ₹ |
| Chg in FII Hold | -1.57 % | Chg in DII Hold | 0.98 % | PAT Qtr | 113 Cr. | PAT Prev Qtr | 146 Cr. |
| RSI | 51.1 | MACD | -14.2 | Volume | 1,39,146 | Avg Vol 1Wk | 2,46,829 |
| Low price | 1,147 ₹ | High price | 1,771 ₹ | PEG Ratio | 3.38 | Debt to equity | 0.06 |
| 52w Index | 45.3 % | Qtr Profit Var | 7.24 % | EPS | 30.8 ₹ | Industry PE | 36.0 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT declined from 146 Cr. to 113 Cr., showing short-term weakness, though YoY profit variation is positive at +7.24%.
- Profit Margins: ROE at 24.7% and ROCE at 30.6% reflect strong efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.06 highlights a near debt-free balance sheet.
- Cash Flows: Dividend yield at 0.84% provides moderate shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 44.7 vs Industry PE of 36.0, indicating premium valuation.
- P/B Ratio: Current Price 1,430 ₹ / Book Value 140 ₹ ≈ 10.2, showing expensive pricing relative to book value.
- PEG Ratio: 3.38, suggesting growth is priced expensively.
- Intrinsic Value: Estimated fair value around 1,300–1,350 ₹, making current price slightly overvalued.
🏢 Business Model & Competitive Advantage
- Dr. Lal PathLabs is a leading diagnostic and pathology services provider in India.
- Competitive advantage lies in brand recognition, extensive network of labs and collection centers, and trusted healthcare services.
- Strong focus on preventive healthcare and diagnostic expansion supports long-term demand.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 1,300–1,350 ₹, closer to intrinsic value.
- Long-Term Holding: Strong fundamentals, high ROE/ROCE, and debt-light balance sheet make it suitable for long-term investors, though valuation is stretched.
✅ Positive
- High ROE (24.7%) and ROCE (30.6%) reflect strong efficiency.
- Debt-light balance sheet ensures financial stability.
- DII holdings increased (+0.98%), showing domestic institutional support.
⚠️ Limitation
- P/E ratio above industry average, indicating premium valuation.
- P/B ratio of 10.2 shows expensive pricing relative to book value.
- Quarterly PAT decline highlights short-term earnings weakness.
📉 Company Negative News
- Decline in FII holding (-1.57%) indicates reduced foreign investor confidence.
- Technical indicators (MACD -14.2) show bearish sentiment.
📈 Company Positive News
- DII holdings increased (+0.98%), showing domestic support.
- Strong brand presence and trusted healthcare services.
🏭 Industry
- Diagnostics industry PE at 36.0, lower than Lal PathLabs’ 44.7, suggesting relative overvaluation.
- Industry growth supported by rising healthcare awareness, preventive diagnostics, and lifestyle-related health demand.
🔎 Conclusion
- Dr. Lal PathLabs is a fundamentally strong diagnostics company with high efficiency and low debt.
- Valuation is stretched compared to industry peers, making current levels less attractive for fresh entry.
- Best suited for long-term investors with cautious entry around 1,300–1,350 ₹; accumulation strategy recommended for exposure to India’s growing healthcare diagnostics sector.
I can also highlight preventive healthcare and lifestyle-driven diagnostic demand trends that could further strengthen Lal PathLabs’ long-term growth outlook.