Diagnostics stocks favoured on Q4 optimism

Sector to outshine healthcare peers as higher volumes, steady realisations will boost revenue and profit, say analysts

- RAM PRASAD SAHU

The diagnostics sector is expected to have outperformed peer segments of pharmaceuticals and hospitals within the healthcare sector in the March quarter of financial year 2025-26 (Q4FY26).

With volumes picking up and realisation remaining steady, the segment is expected to post the highest Q4 revenue and profit growth in the sector.

While stocks in the diagnostics sector had underperformed their healthcare peers prior to the Iran war, their performance has been better than the benchmarks as well as the pharma and hospital sector stocks post February 28.

In addition to better growth trajectory, the diagnostics space is less impacted by the Iran war as it is completely domestic focussed. While the hospital stocks have an exposure to the West Asia market and the medical tourism segment and the pharmaceutical segment is weighed down by multiple headwinds in the US market, diagnostics is not impacted.