Dr Lal Path Labs shares soar 8% after Q1 earnings beat estimates. What Nomura, Nuvama, other brokerages are saying?

Shares of Dr Lal Path Labs jumped nearly 8% on Monday to hit a new 52-week high after the diagnostics firm reported better-than-expected earnings for the first quarter of FY27, with multiple brokerages raising target prices.Dr Lal Path Labs shares jumped to a fresh 52-week high of Rs 1,895 apiece on Monday, rising more than 12% in just two sessions.

The stock is on track to record its sharpest single-day surge since early May this year.The company on Friday reported a 28% year-on-year (YoY) increase in consolidated net profit to Rs 169.5 crore for the April-June quarter of FY27, from Rs 132.4 crore in the corresponding quarter of the previous financial year.

The firm’s revenue from operations, meanwhile, rose over 19% YoY to Rs 797.7 crore during the quarter under review.Along with the Q1 results, Dr Lal Path Labs announced an interim dividend of Rs 5 per equity share for the ongoing financial year 2027, with July 30 fixed as the record date to determine the eligibility of shareholders to receive the payout.Also read |Dr Lal PathLabs posts higher first-quarter profit on healthy demand for testsNomura on Dr Lal Path Labs share priceNomura maintained its ‘Buy’ call on the shares of Dr Lal Path Labs but increased its target price to Rs 2,085 apiece from Rs 1,860 apiece.

The latest target price implies an upside potential of 18.5% from the stock’s previous closing price of Rs 1,759.20 apiece.The international brokerage said that the company’s Q1 earnings came ahead of its estimates.

The beat was driven primarily by higher-than-expected realisations, aided by price hikes in the CGHS and ECHS schemes, it said, noting that management indicated that the benefit from the CGHS and ECHS price hikes should continue over the next 2–3 quarters.For FY27, the company’s management has raised its revenue guidance to mid-teens from early-teens, implying an acceleration in growth on the back of stronger realisation.

On margins, management has adopted a more conservative stance, maintaining EBITDA margin guidance at 27–28% as it intends to reinvest in capacity building while prioritising growth, Nomura said.

“We, however, model FY27 revenue growth of 16.6% and an EBITDA margin of 28.9%.

Beyond network expansion, a target of 12–15 lab additions in FY27, the company is investing in high-end tests, radiology and international market opportunities, with inorganic growth also on the table,” it further said.Nomura revised its FY27 estimates to reflect the strong Q1 results, factoring in higher revenue growth and lower EBITDA margins.

Consequently, it raised its FY27F–29 earnings estimates by nearly 6%.

“We believe Dr Lal Path Labs' valuation is underpinned by strong volume growth and a robust balance sheet that supports its acquisition ambitions.

We expect Dr Lal Path Labs to trade at least at the upper end of its pre-COVID range of 40–45x one-year-forward EPS.

A higher market valuation, versus pre-COVID, stronger earnings growth, 18% EPS CAGR over FY26–29F versus 14% over FY16–19, and a higher dividend payout justify this valuation, in our view,” the international brokerage said.Nuvama on Dr Lal Path Labs share priceNuvama also noted that Dr Lal Path Labs beat earnings estimates.

It said the company remains on a robust growth path owing to network expansion, 12–15 labs and 2–4 radiology centres in FY27, CGHS and ECHS price hike-led growth, sustained traction in the Delhi NCR market, double-digit growth, and a strong Suburban turnaround, along with a robust balance sheet which could unlock inorganic optionality.The brokerage raised its earnings estimates for FY27 and FY28.

It maintained its ‘Buy’ rating on the stock while increasing its target price to Rs 2,140 apiece.

This implies an upside potential of nearly 22%.JM Financial on Dr Lal Path Labs share priceJM Financial said Dr Lal delivered a strong Q1FY27, beating estimates by a substantial margin and delivering a second consecutive quarter of 15%+ growth.

“We remain positive on Dr Lal, supported by its market leadership, structurally superior B2C mix, healthy cash generation and revival of structural growth in the industry,” it said.The domestic brokerage maintained its ‘Buy’ call on Dr Lal Path Labs shares but increased its target price to Rs 2,195 apiece, implying nearly 25% upside.Also read |Why is market rising today?

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