‘Diagnostic industry may log 55 pc revenue growth in FY22’

 

 

 

THE pandemic sharply boosted revenue and operating profit margins of national-level diagnostic firms during first half of the year which may help them log out 2021-22 with around 55 per cent jump in topline growth and around 800 basis points increase in operating margins, says a report. The report by Icra Ratings also expects the prices of diagnostic tests to stabilise at current levels due to focus on volume growth and higher competitive intensity from the unorganised players. The diagnostics industry led by national-level players like Lal Pathlabs, Metropolis Healthcare, Thyrocare Technologies, SRL, Vijaya Diagnostic Centre, Krsnaa Diagnostics, saw a sharp 74 per cent jump in revenue in April-September partly due to low base and partly due to higher demands for COVID tests, while non-COVID tests slipped.

This growth is in line with the active cases that touched an all-time high in May 2021, peaking at over 4x the first wave peak. Despite regulated pricing on COVID tests, better volume mix led to improved realisation in H1, says the report. The industry is set to close the year with a 55 per cent annualised revenue growth which is likely to moderate in 2nd half, while for regional chains, revenue growth is estimated at 8-10 per cent. Operating profit margins has improved to 32 per cent in H1 from 23 per cent in H1 FY21 and 30 per cent in Q4 FY21.