loading
loading
Dr Lal PathLabs is buying 70% of SN Genelab for ₹168 crore. There's also an additional ₹31.5 crore it will pay if SN Genelab hits certain performance targets. SN Genelab's fiscal year (FY26) revenue was ₹58 crore, which is just 2% of Dr Lal’s revenue last year. So, an immediate boost to Dr Lal can be ruled out. As per Nomura Research, SN Genelab's acquisition may be marginally earnings per share dilutive for Dr Lal in the near term. Testing capabilities However, SN Genelab’s testing capabilities could gain wider reach through Dr Lal's network over time, potentially boosting growth. Dr Lal has a huge network of hospitals, doctors, and patients across India (both B2B and B2C). The deal also helps strengthen Dr Lal’s reach in western India, which contributes 14% of the company’s revenues. Besides focusing on oncology, reproductive health, rare diseases, cytogenetics, and infectious disease testing, SN Genelab has an expertise in specialized genomics. Its revenue and Ebitda grew 24% and 31% annually over FY21-FY26. A combination of SN Genelab's special tests with Dr Lal's reach could improve volumes over the next 2-3 years. Many of India’s smaller, specialized testing companies in areas like cancer, genetics, and rare diseases, do not have the reach currently. “The larger, organized chains are cash-rich and find these smaller bolt-on acquisitions a swifter route to building capabilities in high-end testing,” said Nomura. Recall that in December 2024, Metropolis had acquired the Delhi-NCR-based Core Diagnostics, a genomics and advanced oncology testing specialist, for ₹247 crore. “Unlike SN Genelab, however, Core Diagnostics was operating only at Ebitda break-even levels at the time of the acquisition,” added Nomura. SN Genelab’s FY26 Ebitda margin stands at 26%. Dr Lal paid about 16 times SN Genelab's FY26 Ebitda, which seems fair for a fast-growing, high-margin company. To be sure, even a slower payoff would not strain Dr Lal’s finances. Dr Lal has around ₹1,700 crore in cash and enjoys healthy margins, which offer comfort. Emkay Global Financial Services expects Dr Lal to generate revenue of ₹3,165.5 crore by FY27, up around 15% year-on-year, with Ebitda margin of 28.8% versus 28.3% in FY26. The stock has gained 30% so far in 2026, and currently trades 5% below its 52-week high of ₹2,038.60 hit on 16 September.
document fetched 2026-09-29 03:00 · canonical https://livemint.com/market/mark-to-market/dr-lal-pathlabs-share-price-dr-lal-pathlabs-sn-genelab-deal-genomics-11790581986691.html