Healthcare Stock Rises 7% After Q1 Profit Jumps 28% as Brokerage Raises Target to ₹2,085

A leading diagnostics company surprised the Street after reporting a better than expected June quarter, with net profit rising 28% and revenue growing 19% year on year. The earnings beat pushed the stock more than 7% higher, while global brokerage Nomura raised its target price and maintained its positive outlook.

The quarter was supported by higher test realisations, healthy growth in specialised diagnostics, pricing revisions under government healthcare schemes and steady patient volumes. Management has also raised its FY27 revenue outlook while continuing to invest in network expansion and high value diagnostic services.

Stock Rallies After Q1 Earnings

Shares of Dr Lal PathLabs climbed as much as 7.55% after the company announced its Q1 FY27 results. The stock was trading around ₹1,856.50, up 5.53% during morning trade.

Following the results, Nomura retained its Buy rating and raised its target price to ₹2,085 from ₹1,860, citing stronger than expected earnings driven by higher test realisations.

Share Price Snapshot

Metric	Value
Current Price	₹1,856.50
Intraday Gain	Up to 7.55%
Brokerage	Nomura
Rating	Buy
Target Price	₹2,085
Previous Target	₹1,860

Q1 FY27 Financial Performance

Dr Lal PathLabs reported net profit of ₹169.5 crore, up 28.02% from ₹132.4 crore in the corresponding quarter last year. Revenue from operations increased 19.10% to ₹797.7 crore, compared with ₹669.8 crore a year ago.

According to Nomura, the company outperformed estimates across key financial metrics, with revenue, EBITDA and profit after tax beating expectations by 4.5%, 12.9% and 13.3%, respectively, reflecting broad based operational strength.

Q1 FY27 Financial Snapshot

Particulars	Q1 FY27	Q1 FY26	Growth
Revenue	₹797.7 Cr	₹669.8 Cr	19.1%
Net Profit	₹169.5 Cr	₹132.4 Cr	28.0%
Revenue vs Nomura Estimate	Beat	-	+4.5%
EBITDA vs Estimate	Beat	-	+12.9%
PAT vs Estimate	Beat	-	+13.3%

Higher Test Realisations Boost Earnings

Nomura said the Q1 performance was mainly driven by higher than expected test realisations, supported by price revisions under the CGHS and ECHS healthcare schemes, a better mix of specialised diagnostic tests and stronger contributions from higher realisation markets. The brokerage expects these pricing benefits to continue over the next two to three quarters.

Operational Performance

Operational metrics remained healthy during the quarter, with sample volume increasing 10.7% and patient volume rising 8% year on year. Realisation per test grew 7.6%, the highest quarterly increase in the past five years, while realisation per patient improved 10%.

The company's preventive healthcare package Swasthfit contributed 27% of total revenue and recorded 20% year on year growth, reflecting sustained demand across its diagnostic services.

Operational Highlights

Metric	Growth
Sample Volume	10.7%
Patient Volume	8%
Realisation Per Test	7.6%
Realisation Per Patient	10%
Swasthfit Revenue Growth	20%
Swasthfit Contribution	27% of Revenue

Revenue Outlook Improved

Following the strong first quarter, management raised its FY27 revenue growth guidance to the mid teens from its earlier expectation of early teens growth. The company maintained its EBITDA margin guidance of 27% to 28%, while continuing to invest in laboratory expansion and capacity building.

Nomura now expects FY27 revenue growth of 16.6% with an EBITDA margin of 28.9%.

Expansion Strategy Continues

The company plans to add 12 to 15 laboratories during FY27 while increasing investments in high end diagnostics, radiology services and international markets. Management also indicated that strategic acquisitions remain part of its long term growth strategy.

Nomura Raises Earnings Estimates

Following the June quarter performance, Nomura increased its FY27 to FY29 earnings estimates by 6%. The brokerage believes improving revenue growth, a healthy balance sheet and continued investments in expansion support the company's long term outlook.

Nomura also expects Dr Lal PathLabs to trade at the upper end of its pre COVID valuation range of 40 to 45 times one year forward earnings, supported by improving fundamentals and acquisition opportunities.

Investor Takeaways

Dr Lal PathLabs delivered a better than expected quarter with 28% growth in net profit, 19% revenue growth and healthy operational performance. The company also raised its FY27 revenue guidance, while Nomura maintained its Buy rating and increased its target price to ₹2,085.

Going forward, investors will watch whether the company can sustain higher test realisations, execute its expansion plans and maintain margins while investing for long term growth.

Why did Dr Lal PathLabs shares rise today?

The stock gained more than 7% after reporting better than expected Q1 FY27 earnings. Nomura also retained its Buy rating and raised its target price to ₹2,085.

What was Dr Lal PathLabs' Q1 FY27 net profit?

The company reported net profit of ₹169.5 crore, up 28.02% from ₹132.4 crore in the corresponding quarter last year.

How much revenue did Dr Lal PathLabs report?

Revenue from operations increased 19.10% to ₹797.7 crore during Q1 FY27.

Why did Nomura raise its target price?

The brokerage cited higher test realisations, improving revenue growth and better than expected earnings, raising its target price to ₹2,085 while maintaining a Buy rating.

What is Dr Lal PathLabs' FY27 outlook?

Management has raised its FY27 revenue growth guidance to the mid teens while maintaining EBITDA margin guidance of 27% to 28% and continuing investments in expansion, specialised diagnostics and radiology services.