How Dr Lal Pathlabs Has Grown From A Single Lab To Having A Pan India Presence

Dr Lal Pathlabs wisely planned its expansion, optimising cost along the way, and doubled its revenue and profit over five years.

If you have lived in Delhi or the NCR, you can’t have missed Dr Lal PathLabs’ blue-and-yellow sign-boards. They are omnipresent. But, it wasn’t so three decades back. Dr Arvind Lal, chairman and son of the founder Dr S K Lal, likes to tell this story from the 1980s. “Every time an old client, Bhalla, would come to our lab at Hanuman Road near Connaught Place, his daughter-in-law had to take a day off from work. Bhalla asked me one day, ‘Bete why don’t you open a small centre near our place?’ That is when I thought of franchising Dr Lal PathLabs,” says Dr Lal. It would be the first time a diagnostics brand tried that in India.

Dr Lal PathLabs has expanded greatly since those early days. It has 193 clinical labs, 2,153 patient-service centres (lab-cum-store) and 5,624 pick-up points (see: Healthy growth). It has also expanded from its home city of Delhi to other parts of the country, with a larger presence in the northern market.

Business is booming. In the past five years, the diagnostics chain’s top line has nearly doubled — to 10.56 billion in FY18, from 5.57 billion in FY14, and bottom line to 1.7 billion in FY18, from 800 million in FY14. A total of 15.2 million patients gave 34.7 million samples to Dr Lal PathLabs in FY18; an improvement of two million patients over the previous year. Their labs across the country employ 147 pathology specialists, eight radiologists, 13 microbiologists, five biochemists and 11 specialists with doctorate degrees.

In India, the diagnostics or pathology space is highly fragmented but Dr Lal PathLabs counts itself as the largest player in the organised space. Its competi tors include SRL Diagnostics (9.95 billion in revenue), Metropolis (5.5 billion) and Thyrocare (with 3.55 billion). Dr Lal PathLabs’ clearly has a comfortable lead; its rapid growth has been thanks to its careful geographical expansion and cost optimisation.