Dr Om Manchanda, Managing Director, Dr Lal Pathlabs Ltd, talks about the Q1FY21 results, the contribution of COVID-19 tests in the numbers, impact of COVID on the business, frequency of tests and expansion plans among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

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There has been a sharp fall in results this time; we believe it’s because of COVID-19. But as you were doing COVID-19 test all throughout, so how it has contributed to the numbers this time?
The main drop came in the months of April and May; primarily it was a result of the lockdown. However, our non-COVID business recovered a lot in June. There was an increase in the COVID business and it had at least 20% contribution in this quarter. So, our result is a combination of COVID and non-COVID businesses. 

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By when do you expect a recovery in operations to the pre-COVID levels? How was the volume this time and by when you expect them to get back to normal?
Basically, two trajectories are available in our top line and they are (i) Non-COVID Business and (ii) COVID business. The COVID trajectory came just in the first quarter and it is very difficult to say anything about how it will sustain. But, we have a lot of focus on non-COVID business and sooner we bring it back, the better it will be for us because there is a retail infrastructure in our business where people come. It is a high-cost infrastructure and its recovery is the most important aspect for us. I hope that in the next 3-4 months, we will be able to bring our non-COVID business to the class-III, which will be very good for us. But, it is very difficult to say anything about the COVID business in terms of whether this trajectory will remain or not but the top line of COVID will settle somewhere but it is difficult to mention where it will settle. 

The cases of COVID are increasing and at an average, around 50,000 people are being added to the list per day in India. It is rising faster in non-metro cities. Is there any improvement in the test frequency and how many tests are conducted at Dr Lal Pathlabs per day? Do you think that the availability of the kits is proper at present?
As far as COVID testing is concerned, our main role is to support the district and state government authorities. If you have a look at the strength of the first quarter than 60% of our business came from the government. We have also seen a trend in the last 1-2 months that the government’s capacity is increasing in every state. Apart from this, the rapid indigenous test is not so good for a lab format. So, the increasing number of tests is a combination of RT-PCR and rapid Antigen tests and we have noticed that there is an enormous growth in the government’s capacity. If you have a look at our Q1 business then 60% of the business came from the government and remaining was the private business. As far as our company’s efforts are concerned then it depends on the number of labs to which we can expand it, which will be better for us. Right now, we have received approval for the test at Delhi, Kolkata and Indore labs and there are three-four more labs that we want to add to the list with time. So, we will try to increase the number of labs where we can conduct these RT-PCR tests as it will help us to support the government’s efforts more. 

Tell us the kind of expansions that you are lining-up and also update us about the changes that were made due to the COVID in terms of centres that will be opened all across the country?
Amid the COVID, we have seen a behavioural change among the patients in which they are hesitant in visiting the places with large crowds. The walk-in business is more at the working labs that we have, especially in Delhi-NCR but we have noticed that patients are hesitating and it is natural. It has led to a shift in which the home collection requests have gone up and we are increasing our capacity there. At the same time, we are also encouraging our franchise-network to opt for home collections. This is one change that we have seen. 

The second question is related to how we are expanding our COVID testing facilities then it has two types of tests (i) RT-PCR and antigen type tests and (ii) antibody tests. As far as the antibody test is concerned then our complete network can conduct such tests. We have 216 labs at present and I feel that all the labs have the capability to conduct the antibody tests. While the RT-PCR tests are highly specialized tests and can’t be conducted at every lab. So we are trying to add three-four more labs to the three labs, which were approved earlier to conduct the tests but can’t say anything about them until they are not approved by the ICMR.