Diagnostic Companies Poised for Growth in 2025
Diagnostic companies in India are expected to experience significant revenue growth in the upcoming financial year 2025, according to a study by CRISIL. This projected growth of 10-11% is attributed to a combination of factors, including an increase in patient volume and improved revenue per patient.
The projected rise in revenue builds upon an estimated 8% growth achieved in the previous financial year (2024). This continued growth trajectory is driven by several key trends within the industry.
Established diagnostic players are strategically expanding their reach into smaller cities, tapping into new patient populations and driving higher patient volumes. This move is particularly important as growth opportunities in metros and urban centers are becoming increasingly stagnant due to stiff competition from e-pharmacies and hospital-attached labs.
Consumers are increasingly prioritizing preventive healthcare, leading to a growing demand for comprehensive health packages. These packages typically include a variety of tests tailored to different genders, age groups, and consumer profiles, facilitating early detection and intervention for potential health issues. This shift in consumer behavior allows diagnostic companies to charge a premium for these packages, resulting in higher revenue per patient.
The increasing popularity of premium wellness packages is expected to contribute to steady operating margins for diagnostic companies in the upcoming year. These packages, which typically include preventive health checkups, command a higher price point, leading to an increase in overall revenue. The share of this segment is projected to reach around 22-23% in financial year 2025, up from 18-20% in the previous year.
With healthy internal accruals and modest capital expenditure, diagnostic companies are expected to maintain low reliance on external debt. This ensures strong balance sheets and supports the credit profiles of these players.
The CRISIL study is based on a sample set of ten diagnostic companies, including five pan-India players such as Dr Lal PathLabs, Metropolis Healthcare, Agilus Diagnostics, Thyrocare Technologies, and Vijaya Diagnostic Centre.