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Outlook for diagnostics industry favourable for growth: Dr Lal PathLabs

The company, in its Annual Report for 2019-20, stated that instances and situations like the COVID-19 outbreak further boost the importance of diagnostics as an integral part of healthcare system.

July 07, 2020 / 04:33 PM IST
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The outlook for diagnostics industry in India is favourable for growth with rapid technological advancements in healthcare industry, and doctors increasingly relying on evidence-based treatment, Dr Lal PathLabs has said.

The company, in its Annual Report for 2019-20, stated that instances and situations like the COVID-19 outbreak further boost the importance of diagnostics as an integral part of healthcare system.

"Therefore, sustainable growth in the industry is likely," Dr Lal PathLabs noted.

With emphasis on providing quality services and compliance, the organised players will benefit from such developments, the company said.

The Indian diagnostics market, including radiology, is estimated to be around Rs 80,000 crore, and private players are estimated to constitute around Rs 45,000 crore of this market, the company said.

The diagnostics industry is fragmented, and while unorganised players make up for majority of the pie, the organised sector is continuously increasing its share of the market, especially after the COVID-19 outbreak, it added.

The unorganised sector constitutes around 48 percent of the market, while the organised national branded and regional chains constitute around 15 percent, and the rest is with labs attached with hospitals, Dr Lal PathLabs said.

Commenting on the company's business performance, Dr PathLabs Executive Chairman Arvind Lal said the firm continues to emphasise patient volumes over test prices.

"We have built strong economies of scale which have further helped us expand our offerings and network. Our Kolkata reference lab is scaling up well with the east, north east and central zones in focus," he added.

The company's primary focus currently remains on penetrating deeper into the markets where it is present already, while looking at exploring inorganic opportunities in the western and southern geographies, Lal said.

Dr Lal PathLabs Managing Director Om Prakash Manchanda said the company has been judiciously working on enhancing its product mix, geographic mix and channel mix, which has resulted in reduced dependence on its dominant Delhi-NCR market.

"Just to share some statistics, revenue contribution from rest of India market increased to 60 percent with double-digit growth of 15 percent in FY20. This complements our cluster city approach where we develop important pockets outside our core markets to drive volumes," he added.

The company has concurrently undertaken small-sized acquisitions in order to extend its offerings in high-potential territories and as a strategy this approach will continue, Manchanda noted.

"With a clear belief in the potential of the industry we maintain our long-term vision for growth and will resume multiple initiatives actively towards further expanding operations as the situation allows," he added.

Last fiscal, the company said it served 1.94 crore patients and processed 4.77 crore samples.

As on March 31, 2020, the company had 216 clinical laboratories, 3,095 patient service centres (PSCs) and 6,995 pick-up points (PUPs).

PTI
first published: Jul 7, 2020 04:25 pm

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