The study conducted by CRISIL forecasts a significant uptick in revenue for diagnostic companies in the upcoming financial year 2025, following an estimated 8 per cent growth in financial year 2024. This growth is attributed to a combination of factors, including the geographical expansion of established players into smaller cities, leading to increased patient volumes, as well as the rising preference for comprehensive preventive health packages, which result in higher revenue per patient.
Poonam Upadhyay, Director at CRISIL Ratings, highlighted the shift of established diagnostic companies towards Tier-II and Tier-III cities, citing limited growth opportunities for routine tests in major metropolitan areas. The study underscores the importance of premium wellness packages in maintaining steady operating margins for diagnostic companies in financial year 2025, as these packages enjoy growing demand and allow for increased spend per patient. The bundling of various tests into tailored wellness packages for different demographics has proven successful in charging premium prices, with the segment's share expected to increase to around 22 to 23 per cent in financial year 2025.
Furthermore, the study indicates that the focus on higher-margin health packages is expected to contribute significantly to total revenues, helping to sustain operating margins at 24 to 25 per cent. Despite ongoing expenditures on brand promotion, the study suggests that diagnostic companies are poised to maintain strong balance sheets and credit profiles, with low reliance on external debt and healthy levels of internal accruals. The study's insights are based on an analysis of ten diagnostic companies, with a focus on pan-India players like Dr Lal PathLabs, Metropolis Healthcare, Agilus Diagnostics, Thyrocare Technologies, and Vijaya Diagnostic Centre.