## Diagnostic Companies Poised for Growth in 2025
Diagnostic companies are expected to experience significant growth in the coming year, with revenue projected to increase by 10-11% in the 2025 financial year. This growth is attributed to a rise in patient volume and an increase in revenue per patient.
This projected growth follows an estimated 8% increase in revenue during the 2024 financial year. The rise in patient volume is driven by established players expanding into Tier-II and Tier-III cities, while the increase in revenue per patient is fueled by the growing demand for comprehensive preventive health packages.
The expansion into smaller cities is a strategic move by diagnostic companies, as they face stagnant growth opportunities in metros and urban centers due to stiff competition from e-pharmacies and hospital-attached labs. These smaller cities offer new markets with untapped potential.
Furthermore, diagnostic companies are seeing success with premium wellness packages that include preventive health checkups. These packages allow companies to charge a premium, leading to an increase in spend per patient. The share of this segment is expected to reach around 22-23% in the 2025 financial year, up from 18-20% in the previous year.
The rising share of higher-margin health packages is expected to account for nearly one-fourth of total revenues, ensuring that operating margins remain steady at 24-25% in the 2025 financial year. This stability is despite continued brand promotional expenditure.
With healthy internal accruals and modest capital expenditure, diagnostic companies are expected to rely less on external debt. This will ensure strong balance sheets and support their credit profiles.
Dr Lal PathLabs, Metropolis Healthcare, Agilus Diagnostics, Thyrocare Technologies, and Vijaya Diagnostic Centre.