Dr Lal Pathlabs gets mixed sentiment from brokerages post its Q4 earnings – Check target price here

Despite its strong quarter four results, the brokerage firms post a mixed sentiment for Dr Lal Pathlabs. The diagnostic company’s reported a jump of two and half times higher profit in the fourth quarter of the financial year 2020-2021 on Friday. 

Goldman Sachs maintained a Buy call on Dr Lal PathLabs, with a target at Rs 3,210 per share. The stock is currently down around two per cent to Rs 2777 apiece. 

According to Goldman Sachs, reference lab expansion on track of the company and lockdowns could delay some non-Covid testing demand. The brokerage firm likes Dr Lal’s ability to execute on pent-up diagnostic testing demand. 

Dr Lal reported a consolidated net profit of Rs 85.1 crore in the fourth quarter of FY21 as against Rs 32.6 crore in Q4 FY20, on account of a rise in the non-COVID-19 business. 

Whereas, another brokerage firm JP Morgan maintained an Underweight stance on Dr Lal PathLabs, reduces the target to Rs 2,200 per share. It stated, the Covid volumes continue to surprise on the upside and risk to core margin from the rest of India remains. 

JP Morgan also mentioned, the non-Covid growth is a good sign and provides confidence on volume trend and the valuations look stretched at current levels. 

Dr Lal PathLabs Executive Chairman Arvind Lal said, "Even though the concluding quarter of FY21 was marked by the second wave of COVID-19 pandemic in India, we have ensured that our non-COVID-19 business has shown growth." 

The COVID-19 business started increasing by the end of the quarter due to the growing caseload of coronavirus cases, he added. 

The stock on Monday has been trading near the day’s low level at Rs 2740 apiece, it had opened at a day’s high of Rs 2810 per share. The stock on Friday has closed positive at Rs 2834 per share