Dr Lal PathLabs Limited Corporate Presentation Q4 & FY16 Table - PowerPoint PPT Presentation

Dr Lal PathLabs Limited Corporate Presentation Q4 & FY16

Table of Contents Our Evolution 1 Dr Lal PathLabs at a glance 2 Investment Highlights 3 Key Q4 & FY16 Highlights 4 Notes to Accounts 5 Q4 & FY16 Financial Performance 6 Q4 & FY16 Financial Trends 7 Annexures 8 DISCLAIMER: This presentation may contain ‘forward - looking’ statements at places. The Company’s business operations remain subject to undetermined contingencies and risks. Dr. Lal PathLabs Limited would not be liable for any action undertaken based on such ‘forward - looking’ statements and does not commit to revising/updating them publicly. 2

Our Evolution 1949 – 2005 2005 – 2010 2010 – 2016 Foundation Building capabilities for Strong position in North scale up India, building network in other geographies  1949: Founded by Dr. Major  2005 onwards: Investment  Investment by TA Associates S. K. Lal by WestBridge Capital  Clinical laboratories expansion in North region  1995: Company incorporated  2008: Acquisition of Paliwal as Dr. Lal PathLabs Private Medicare Private Limited and  Growing the business in Ltd. Paliwal Diagnostics Private East region Limited  Entry into the South and  2000: Three clinical labs West regions receive NABL 1 accreditation  2010: National Reference Lab set up in Delhi  Multiple acquisitions to scale network  2001: Received ISO 9001:2008 certification  Successful listing in 2016  2002: Received ’International Accreditation’ from CAP 2 1. NABL: National Accreditation Board for Calibration and Testing Laboratories. 3 2. CAP: College of American Pathologists. 4

Dr. Lal PathLabs at a glance Test Menu Established consumer healthcare brand in diagnostic services Specialized Routine testing testing Pan-India integrated coverage with 172 clinical labs  Bio-chemistry  Molecular (including National Reference Lab 1 at Delhi), 1,559 Patient Service Centers (PSCs) and 4,967 Pick-up Points (PUPs) 2 diagnostics  Hematology  Flowcytometry Catalogue of 1,110 test panels, 1,934 pathology tests  Clinical and 1,561 radiology and cardiology tests 2  Genetics / pathology Cytogenetics Collected and processed ~21.7mn samples from  Microbiology ~9.9mn patients in FY15 3 ; ~26.3mn samples from  Histopathology ~12.0mn patients in FY16 2 .  Basic radiology Customers include individual patients, corporates and Accreditations institutions, healthcare providers as well as hospital and clinical labs (lab management) ~4,000 employees including full time consultants, pathologists, phlebotomists and radiologists 2 ISO15189:2007 27 Labs IS9001:2008 FY16 2 : Revenue: INR 7,913mn ; EBITDA: INR 2,113mn 4 ISO27001:2013 (Margin: 26.7% ); PAT: INR 1,332mn (Margin: 16.8% ) 4 1. Total area of 7,253 square meters 2. As on March 31, 2016. 3. As on March 31, 2015. 4. EBITDA before ESOP compensation charge of INR 35mn in FY16.

Experienced Management Team (Hony.) Brig. Dr. Arvind Lal Dr. Om Manchanda Dr. Vandana Lal Whole-time Director and Chief Chairman and Managing Director Whole-time Director Executive Officer Dilip Bidani Manoj Garg Shankha Banerjee Chief Financial Officer Chief Human Resources Officer COO – Strategic Business Unit II Munender Soperna Dr. Neelum Tripathi Bhaskar Ghoshal Chief Information Officer Head of Lab Operations Commercial Controller Ved Prakash Goel Rajat Kalra Company Secretary and Compliance Financial Controller Officer 5

Investment Highlights Well-positioned in one of Scalable model integrated Established consumer the fastest-growing through centralized IT healthcare brand in segments of the Indian platform allows for diagnostic services healthcare industry network expansion Attractive operating Robust financial metrics and multiple performance and return levers in place to drive on invested capital next phase of growth 6

Indian Healthcare Services is a large growth opportunity 1.42 bn India’s expected population in 2026 India, highly underpenetrated market 7.6% GDP growth in FY16 1 Total Healthcare Expenditure as % of GDP (2013) INR 4.2 trillion 17.1% FY14 India healthcare expenditure ~68% Private expenditure on healthcare in 2013 9.7% 9.1% 12% CAGR 6.6% Expected healthcare delivery market 6.0% 5.6% growth over the next 5 years 4.6% 4.0% 4.0% 3.1% INR 175 bn Health insurance premium market 2 – growing rapidly given low insurance coverage US Brazil UK Russia Vietnam China Thailand India Malaysia Indonesia Source: CRISIL Report titled “Assessment of Diagnostics Industry in India”. 7 1. Financial Year ending March 31 st . 2. Source: Report of the Insurance Regulatory and Development Authority (“IRDA”)

INR 377 bn Diagnostic Services industry expected to grow to INR 600 bn by FY18 Diagnostic Services Industry Size INR 600 Growth Drivers bn CAGR: 16 – 17% INR 377 Increase in evidence-based 1 bn treatments Demand for lifestyle diseases- 2 related services to grow 2014 – 15E 2017 – 18P Focus on preventive diseases and 3 wellness Screening, early detection, and monitoring reduce downstream costs Source: CRISIL Report titled “Assessment of Diagnostics Industry in India”. 8

Diagnostic Services industry remains highly fragmented Highly Fragmented Industry Standalone Centres, 48% Large Pan- India Chains 35-40% Diagnostic Regional Chain, 15% Chains 60- 65% Hospital Based, 37% Largely fragmented and unorganized Source: CRISIL Report titled “Assessment of Diagnostics Industry in India”. 9

Established consumer healthcare brand in Diagnostic Services Pillars of a Strong Brand Accreditations Nationwide Network Fast Turnaround Time  Accreditations from CAP,  Coverage in metros, Tier 1  24x7 access including online NABL and ISO and Tier 2 cities access and home collection  Centrally administered  Wide reach through PSCs  Dedicated logistics team surveillance programs and PUPs Medico Marketing Doctor Online Call Query Handling Registration Centre Offline Online Lab Report Delivery Sample Collection Offline Home Retail Marketing Digital Marketing  Walk-in customers account for  Diverse and large customer  Single brand pulls patients highest share of revenues pool 10

Scalable Model integrated through centralized IT platform allows for network expansion Hub and Spoke Model Network Expansion PSC PSC No. of PSCs No. of PUPs No. of Clinical Reference Laboratories Lab Clinical Clinical 1,559 Lab Lab 172 1,340 5,668 164 4,967 PSC PSC PSC PSC 1,064 4,225 146 824 2,879 131 Centralized diagnostic testing • provides greater economies of scale PSCs and PUPs facilitate • FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 penetration within region and expand reach 1. Includes National Reference Laboratory. 11

Scalable Model integrated through centralized IT platform allows for network expansion (Cont’d) Integrated National …backed by Centralized IT platform Network… which fully integrated network Enterprise  Payables, receivables, inventory, ledgers etc. Resource Planning (ERP)  Scalability and connectivity – web-based System  Bi-directional interface; tracks specimen Laboratory collection, shipping and testing in real time Information Management System  Assigns unique ID / barcode for each sample National Reference Laboratory  Improve diagnostic services via data Clinical Laboratories Data analyses Collection Patient Service Centers and  Demand for tests are analyzed using past Analytics data 12

Attractive operating metrics No. of patients No. of samples Total Revenue (Mn) (Mn) (INR mn)  Higher revenue realization per  Consumer brand and network patient on account of:  Increase in samples with patient expansion driving patient  Growth in walk-in customers volumes growth  Higher no. of tests per patient volumes  Demand for “higher - end” tests 12.0 26.3 7,963 21.7 9.9 6,625 19.0 9.0 5,602 16.0 4,545 7.7 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 13

Multiple levers in place to drive next phase of growth Expand through Expand presence in Focus on hospital- strategic acquisitions existing markets based clinical labs and partnerships  Cluster and focused geography approach  M&A provides growth kicker  Increase existing tie-ups  Deepen presence in North India by developing  Leverage prior track record  Leverage scale and additional reference labs efficiency (such as in Lucknow)  Completed several acquisitions since 2008  Scale up in East India by  Provide lab management developing ecosystems via and specialized lab testing  Acquisition opportunities in Kolkata reference lab services to polyclinics select new geographies  Targeted expansion in South and West India Increase breadth of diagnostic Continuous focus on providing healthcare testing and services quality healthcare services platform 14