Capitaline

Analyst Meet / AGM 31-Mar-20

Conference Call

Dr. Lal PathLabs Ltd

Expects a speedy recovery after the lock-down end

Dr. Lal PathLabs held a conference call to discuss business updates and way forward. (Hony) Brig. Dr. Arvind Lal - Chairman and Managing Director, Dr. Om Prakash Manchanda - Whole-time Director and CEO, Mr. Ved Prakash Goel - CFO, Mr. Bharath U - CEO (India Business) and Mr. Rajat Kalra - Company Secretary & Head of Investor Relations of the company addressed the call.
Highlights of the Concall

The company does not see changes in the requirement for diagnostic services nationwide in the long term. But in the immediate term in the light of measures adopted to contain the spread of contagious covid19, company operations are staying significantly intact as it is in the essential services business.

The company is overseeing multiple task forces to mitigate impact on the day to day operations and streamline the processes. This includes working with the relevant authorities to ensure smooth movement of samples, materials and employees.

Dr Lal Pathlab was one of the early lab that received clearance from the government for testing of covid-19. These tests are handled by its National reference laboratory at Rohini in Delhi. The tests are offered at a price of Rs 4500 for the initial and confirmatory tests.

The company has a dedicated team at the backend which take request for the tests and its employees are visiting at the patients place to collect the sample.

The company has protocols in place to handle the test at the laboratory and dispose off the sample. The results are shared online and other means that does not involve any contact.

As mandated, the company has earmarked a specific isolated location within the laboratory away from rest of the operations to conduct the tests.

The person visiting for sample collection has been adequately trained for observing the correct safety measures.

Currently Dr Lal has a PCR test capacity of 1500 per day. A single kit can test 98 samples simultaneously. It generally takes a run of 6-7 hours to generate an outcome. The company targets to revert to a patient with the report within 24-48 hours

Three major constraints for COVID are – testing kits which have been ordered (domestic and international vendors) that are is shortage, protective wear for the healthcare staff (only imported) but has now started manufactured in India and expect supply soon to address the shortage; manpower and logistics to collect the sample and deliver it to the lab.

Regular business has been impacted post lock-down. 45-50% of the costs are fixed and the company is working on cost rationalization initiatives (such as rents) to mitigate this business impact.

The company expects a speedy recovery in volumes of the regular business after the lock-down end. If this lock-down sustains longer several smaller labs that are shut would run out of business leading to industry wide consolidation.

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