The Alchemy Of Growth In Diagnostics

India’s diagnostic sector has been very positive of its growth drivers for the future. Leaders believe that their companies will outdo the challenges and adopt practical approaches to initiate, achieve, and sustain profitable growth — today and tomorrow

- Raelene Kambli

Many healthcare companies today are faced with abig question. Is the business of diagnostics inIndia an opportunity or a challenge? By all means, most CEOs and business leaders would state self-evident opportunities such as growing demand for diagnostic services in India, expanded access to such services, increased insurance penetration and more. Experts believe that the industry is expected to grow at a CAGR of approximately 16 per cent accounting to approximately 802 billion ($ 12.3 billion) in the financial year 2020. Within the diagnostics market, the pathology segment is estimated to contribute approximately 58 per cent of total market, by revenue.

Interestingly, the sector’s landscape is undergoing a rapid shift with private equity (PE) capital enabling subscale players to become more aggressive in the market, and the hospital chains/corporate houses seeding diagnostics ventures. According to various reports, players such as Core, iGenetics, Healthians, Vijaya Diagnostics, and Suraksha have raised huge funds to aggressively expand their businesses. New entrant Neuberg, itself is fast bulking up and has already acquired controlling stakes in five labs — Anand Diagnostic Laboratory, Supratech Micropath, Ehrlich lab, Global labs and Minerva Labs, present in Karnataka, Gujarat, Tamil Nadu, South Africa and the UAE respectively. The company has pumped in ` 400 crore and is now looking to invest another ` 500 crore over the next 24 months to grow its fledgling business, both through organic and inorganic routes. Existing hospital chains like Max India, Apollo Hospitals and Thumbay, along with corporate houses like Mankind and Dalmia, are also seeding similar businesses.

On the other hand, the big brothers of the industry, Dr Lal Pathlabs, and Thyrocare went public in 2016. Metropolis Healthcare has also announced its IPO scheduled early this year.