From 10 clinical labs in 2005, Dr. Lal PathLabs has become the largest diagnostic chain in North India with over 190 clinical labs, 2,100+ patient service centres and over 5,600 pick-up points across the country. Om Manchanda, CEO, Dr. Lal PathLabs, shares how the company plans to sustain the momentum as it looks to expand in the eastern and southern markets.
Dr. Lal PathLabs has been a pioneer in the franchising space. Could you please share your franchising strategy that helped you scale your operations?
How do you ensure franchise outlets become self-sustainable?
We have built our franchise model in such a way that it guarantees self sustainability. We look for partners who are personally interested in the healthcare space and have some background of the industry. The investment is not high as retail space requirement is 250-300 sq. feet. The initial investment is about Rs 3 lakhs which goes into equipment and furnishing. The margins are dependent on geography, but we ensure that the operation is profitable and that the return on investment (ROI) is over 24%. In addition, we support our franchisees through investing in training, quality processes, and by giving them marketing, logistics, IT and sales support.
Could you highlight your achievements over the last 2-3 years?
We have continued to scale newer heights for quite some time now. In 2015, we became the first pathology player in India to be listed on the stock market. In 2016, we crossed the 10 million patients’ mark; in 2018, we crossed Rs 1,000 crore in revenue and became the first diagnostic services firm to do so with a record 15 million patients. Along with these achievements, we have continued to strengthen our presence in markets of eastern India, where we launched a regional reference lab in Kolkata in 2018. Today, we have a wide footprint across India with 190+ labs, 2,150+ patient service centres, and over 5,600 pick-up points.
Please talk about your business lines?
Currently, we operate two major business lines: a diagnostic chain for walk-in patients and a business-to-business model that caters to hospitals, which refer patients to it for tests. We have equal focus on our B2C and B2B businesses – they contribute almost equally to our business. Further, we have invested comprehensively in technology to deliver superior services across our business lines. For example, consumers can easily book their tests, access, compare and share results as well as locate the nearest centre using our app.
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