{"id":19893,"date":"2023-11-25T12:32:13","date_gmt":"2023-11-25T07:02:13","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=19893"},"modified":"2023-11-25T12:44:25","modified_gmt":"2023-11-25T07:14:25","slug":"evolving-trends-in-diagnostic-sector","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/evolving-trends-in-diagnostic-sector\/","title":{"rendered":"Evolving Trends in Diagnostic Sector"},"content":{"rendered":"<p>The Indian diagnostic sector is going through a rapid transition with acquisitions by existing players, new business models, and <a href=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/vijaya-diagnostic-ipo-review\/\" target=\"_blank\" rel=\"noopener\">recent IPOs<\/a>.&nbsp; Over the past few years, the industry has experienced robust growth, showing a healthy upward trend. Between FY12-21, the industry clocked a CAGR of ~13%. By FY26, it is expected to reach a market size of Rs 1,360 bn, logging a CAGR of 14%+ on the back of favorable macros.<\/p>\n<p>Low entry barriers, historically high return ratios, and sustained demand (increased awareness, low penetration) has attracted competition. In this evolving landscape with diverse market participants, we want to see who is best placed to capture value. Before that let\u2019s understand the industry structure and services offered.<\/p>\n<h2 style=\"font-size: 18px;\"><strong>Industry:<\/strong><\/h2>\n<p>The diagnostic industry can be bifurcated based on services offered-<\/p>\n<ul>\n<li><strong><u>Pathology<\/u><\/strong> testing involves reporting diagnostic information based on collected samples (blood, urine so on) and analysing them in a laboratory to arrive at useful clinical information.<\/li>\n<li><strong><u>Radiology<\/u><\/strong> involves procedures ranging from simple X-rays and ultrasounds to specialized tests such as CT and PET-CT scans, which help diagnose diseases by marking anatomical and physiological changes in a patient\u2019s body.<\/li>\n<\/ul>\n<h3 style=\"font-size: 16px;\"><strong>Services offered in the diagnostic industry:<\/strong><a class=\"gridlove-popup-img\" href=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry.jpg\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-19896 size-full\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry.jpg\" alt=\"services offered in diagnostic industry\" width=\"1080\" height=\"445\" srcset=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry.jpg 1080w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry-600x247.jpg 600w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry-1024x422.jpg 1024w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry-150x62.jpg 150w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry-768x316.jpg 768w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry-270x111.jpg 270w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/services-offered-in-diagnostic-industry-370x152.jpg 370w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" title=\"\"><\/a><\/h3>\n<p style=\"font-size: 12px;\">Source-DRHP, Annual reports, Moneyworks4me research<\/p>\n<p>While standalone players contributed 42-46% of the total diagnostics industry, diagnostic chains possess better accreditations and cater to a larger set of population through their brand reputation and operational efficiency. This has led to an increase in their share from 13-17% to 16-20% of the overall diagnostics industry between FY20-23.<\/p>\n<h3 style=\"font-size: 16px;\"><strong>Diagnostic industry breakup and market share in revenue terms&nbsp;&nbsp;<\/strong><\/h3>\n<p><a class=\"gridlove-popup-img\" href=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry.png\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-19897 size-full\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry.png\" alt=\"diagnostics industry\" width=\"832\" height=\"365\" srcset=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry.png 832w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry-600x263.png 600w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry-150x66.png 150w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry-768x337.png 768w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry-270x118.png 270w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/diagnostics-industry-370x162.png 370w\" sizes=\"(max-width: 832px) 100vw, 832px\" title=\"\"><\/a><\/p>\n<p style=\"font-size: 12px;\">Source-DRHP, Annual reports, Moneyworks4me research. Note- market share numbers are approximate.<\/p>\n<p>Amongst the major listed players, the business model difference is highlighted below-<\/p>\n<p><a class=\"gridlove-popup-img\" href=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model.png\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-19895 size-full\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model.png\" alt=\"business model\" width=\"810\" height=\"311\" srcset=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model.png 810w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model-600x230.png 600w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model-150x58.png 150w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model-768x295.png 768w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model-270x104.png 270w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/business-model-370x142.png 370w\" sizes=\"(max-width: 810px) 100vw, 810px\" title=\"\"><\/a><\/p>\n<p style=\"font-size: 12px;\">Source-DRHP, Annual reports, Moneyworks4me research.<\/p>\n<h3 style=\"font-size: 16px;\"><strong>Competitive intensity rises as new players enter<\/strong><\/h3>\n<p>Over the last few years, online players, aggregators, <a href=\"https:\/\/www.moneyworks4me.com\/best-index\/bse-stocks\/top-pharma-companies-in-india\/\" target=\"_blank\" rel=\"noopener\">pharma companies<\/a>, and hospital-based labs have entered the market increasing competition and putting pressure on prices. Notable online players are Tata 1mg (healthcare platform including e-pharmacy etc) and Healthians (tests at home). Pharma companies like <a href=\"https:\/\/www.moneyworks4me.com\/indianstocks\/mid-cap\/healthcare\/pharmaceuticals-drugs\/lupin\/company-info\" target=\"_blank\" rel=\"noopener\">Lupin<\/a> and <a href=\"https:\/\/www.moneyworks4me.com\/indianstocks\/large-cap\/healthcare\/pharmaceuticals-drugs\/mankind-pharma\/company-info\" target=\"_blank\" rel=\"noopener\">Mankind Pharma<\/a> have also ventured into diagnostics. <a href=\"https:\/\/www.moneyworks4me.com\/indianstocks\/large-cap\/healthcare\/pharmaceuticals-drugs\/torrent-pharma\/company-info\" target=\"_blank\" rel=\"noopener\">Torrent Pharma<\/a> and Adani Health are also expected to launch soon.<\/p>\n<p><strong>Aggressive pricing<\/strong> &#8211; Diagnostics companies often compete on prices to gain volume.<\/p>\n<h3 style=\"font-size: 16px;\"><strong>Price range for tests and comparison between peers&nbsp;<\/strong><\/h3>\n<p><a class=\"gridlove-popup-img\" href=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1.png\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-19906 size-full\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1.png\" alt=\"Diagnostics companies\" width=\"910\" height=\"288\" srcset=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1.png 910w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1-600x190.png 600w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1-150x47.png 150w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1-768x243.png 768w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1-270x85.png 270w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/Diagnostics-companies-1-370x117.png 370w\" sizes=\"(max-width: 910px) 100vw, 910px\" title=\"\"><\/a><\/p>\n<p><a class=\"gridlove-popup-img\" href=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments.png\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-19899 size-full\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments.png\" alt=\"segments\" width=\"766\" height=\"236\" srcset=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments.png 766w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments-600x185.png 600w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments-150x46.png 150w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments-270x83.png 270w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/11\/segments-370x114.png 370w\" sizes=\"(max-width: 766px) 100vw, 766px\" title=\"\"><\/a><\/p>\n<p style=\"font-size: 12px;\">Source-DRHP, Annual reports, Moneyworks4me research.<\/p>\n<p><a href=\"https:\/\/www.moneyworks4me.com\/indianstocks\/small-cap\/healthcare\/hospital-healthcare-services\/krsnaa-diagnostics\/company-info\" target=\"_blank\" rel=\"noopener\">Krsnaa Diagnostics<\/a> stands out because of its differentiated business model (B2G\/PPP) and is able to offer competitive prices given the low cost of setup and volume stability. While few online players adopted disruptive pricing early to gain market share, they are now dialing them back given high customer acquisition costs and funding constraints.<\/p>\n<h3 style=\"font-size: 16px;\"><strong>Acquisitions for growth&nbsp;<\/strong><\/h3>\n<p>Few listed players have expanded their regional presence via acquisitions. <a href=\"https:\/\/www.moneyworks4me.com\/indianstocks\/small-cap\/healthcare\/hospital-healthcare-services\/dr-lal-pathlabs\/company-info\" target=\"_blank\" rel=\"noopener\">Dr. Lal Pathlabs Ltd<\/a> (DLPL) set up a subsidiary for smaller regional acquisitions and acquired a stake in Suburban Diagnostics (Western region presence). <a href=\"https:\/\/www.moneyworks4me.com\/indianstocks\/small-cap\/healthcare\/hospital-healthcare-services\/metropolis-health\/company-info\" target=\"_blank\" rel=\"noopener\">Metropolis Healthcare<\/a> acquired a stake in Hitech Diagnostics (presence in the southern part of India). Agilus Diagnostics Ltd (IPO filed; formerly SRL) acquired a stake in DDRL (also having a presence in the southern region). These acquisitions put some pressure on margins, hurting ROEs. While this may be a short-term phenomenon, the debt-fueled acquisition could backfire as competitive intensity rises.<\/p>\n<div style=\"border: 2px solid #1eaf6d; padding: 10px; background-color: #c7ffe5; border-radius: 30px; margin-bottom: 20px;\">\n<h3 style=\"font-size: 16px;\"><strong>Conclusion:<\/strong><\/h3>\n<p>The Indian diagnostic industry is expected to be supported by various fundamental growth drivers like the ageing population, rising awareness for healthcare, increase in preventive healthcare, penetration in rural areas, as well as increasing investment by both government and private players. We have been bullish on this segment, check out our recommendation <a href=\"https:\/\/www.moneyworks4me.com\/company\/report\/index\/reportid\/1795\">here<\/a>.<\/p>\n<\/div>\n<p><a href=\"https:\/\/www.moneyworks4me.com\/payment\/index\/subscribe-superstars-offer\/?from=investmentshastra-blog-evolving-trends-in-diagnostic-sector\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-18657 size-full\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner.png\" alt=\"core 50 superstars banner\" width=\"850\" height=\"251\" srcset=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner.png 850w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner-600x177.png 600w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner-150x44.png 150w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner-768x227.png 768w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner-270x80.png 270w, https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2023\/04\/core-50-superstars-banner-370x109.png 370w\" sizes=\"(max-width: 850px) 100vw, 850px\" title=\"\"><\/a><\/p>\n<p><strong><span style=\"text-decoration: underline; margin-top: 20px;\">Best Stocks From<\/span>:<\/strong><\/p>\n<p><a class=\"fasc-button fasc-size-medium fasc-type-flat fasc-rounded-medium\" style=\"background-color: #1eaf6d; color: #ffffff;\" target=\"_blank\" rel=\"noopener\" href=\"https:\/\/www.moneyworks4me.com\/stock-market\/stock-screener\/best-from-nifty-50\">Undervalued Nifty 50<\/a> &nbsp;<a class=\"fasc-button fasc-size-medium fasc-type-flat fasc-rounded-medium\" style=\"background-color: #1eaf6d; color: #ffffff;\" target=\"_blank\" rel=\"noopener\" href=\"https:\/\/www.moneyworks4me.com\/stock-market\/stock-screener\/nifty-500-quality-with-price-strength\">Nifty 500 &#8211; Quality with Price Strength<\/a>&nbsp;<a class=\"fasc-button fasc-size-medium fasc-type-flat fasc-rounded-medium\" style=\"background-color: #1eaf6d; color: #ffffff;\" target=\"_blank\" rel=\"noopener\" href=\"https:\/\/www.moneyworks4me.com\/stock-market\/stock-screener\">Screener<\/a> <a class=\"fasc-button fasc-size-medium fasc-type-flat fasc-rounded-medium\" style=\"background-color: #1eaf6d; color: #ffffff;\" target=\"_blank\" rel=\"noopener\" href=\"https:\/\/www.moneyworks4me.com\/alpha-case\">Alpha Cases<\/a>&nbsp; &nbsp;<a class=\"fasc-button fasc-size-medium fasc-type-flat fasc-rounded-medium\" style=\"background-color: #1eaf6d; color: #ffffff;\" target=\"_blank\" rel=\"noopener\" href=\"https:\/\/www.moneyworks4me.com\/stock-market\/stock-screener\/5-stars-rated-companies-by-moneyworks4me\">5 Stars Rated Stocks from Nifty 500<\/a> <a class=\"fasc-button fasc-size-medium fasc-type-flat fasc-rounded-medium\" style=\"background-color: #1eaf6d; color: #ffffff;\" target=\"_blank\" rel=\"noopener\" href=\"https:\/\/www.moneyworks4me.com\/stock-market\/business-houses\/\">Business Houses Group<\/a><\/p>\n<hr>\n<p><a href=\"https:\/\/www.moneyworks4me.com\/\"><img decoding=\"async\" style=\"float: left; height: 100px; padding-right: 16px; margin-left: 40px;\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2021\/07\/logo-mw4me.png\" alt=\"\" title=\"\"> <\/a> <a class=\"hide-mobile\" href=\"https:\/\/t.me\/mw4me\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" style=\"float: left; height: 100px; padding-right: 16px;\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2018\/05\/investments-shastra-blog.png\" alt=\"\" title=\"\"> <\/a><\/p>\n<div class=\"hide-mobile\" style=\"height: 100px; padding-top: 15px;\"><strong style=\"font-size: 15px; color: #32aadf;\">Join our Telegram Channel:<\/strong><br \/>\n<a style=\"text-decoration: underline; font-size: 14px;\" href=\"https:\/\/t.me\/fundamentalstockinvesting\">Stock Investing<\/a><br \/>\n<a style=\"text-decoration: underline; font-size: 14px;\" href=\"https:\/\/t.me\/mutualfundinvesting\">Mutual Fund Investing<\/a><\/div>\n<div style=\"text-align: center;\">\n<p><span style=\"color: #0070c0;\"><b>Need help on Investing? And more<\/b><b>\u2026.<\/b><b>Puchho<\/b> <b>Befikar<\/b><\/span><\/p>\n<div class=\"puchhoBefikarIcon\"><img decoding=\"async\" loading=\"lazy\" class=\"\" src=\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2018\/05\/puchho-befikar-logo.png\" width=\"59\" height=\"46\" alt=\"\" title=\"\"><\/div>\n<p><b><i><\/i><\/b><a href=\"https:\/\/www.youtube.com\/watch?v=iqqbuJbMlk4\" target=\"_blank\" rel=\"noopener\">Why MoneyWorks4me<\/a> | Call: <a href=\"tel:+91 20 6725 8333\">020 6725 8333<\/a>&nbsp;| <a href=\"https:\/\/www.moneyworks4me.com\/stock-market\/about\/about-us\/\" target=\"_blank\" rel=\"noopener\">About<\/a>&nbsp;| WhatsApp: <a href=\"https:\/\/api.whatsapp.com\/send?phone=918055769463&amp;text=Need%20any%20help?\" target=\"_blank\" rel=\"noopener\">9860359463<\/a><\/p>\n<p style=\"text-align: left;\"><strong>*<\/strong>Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.<\/p>\n<p style=\"text-align: left;\"><strong>*Disclaimer:<\/strong> The securities quoted are for illustration only and are not recommendatory<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Indian diagnostic sector is going through a rapid transition with acquisitions by existing players, new business models, and recent IPOs.&nbsp; Over the past few years, the industry has experienced robust growth, showing a healthy upward trend. Between FY12-21, the industry clocked a CAGR of ~13%. By FY26, it is expected to reach a market [&hellip;]<\/p>\n","protected":false},"author":2889,"featured_media":19894,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1151,1152],"tags":[1613,1612,1611,1610],"modified_by":"MoneyWorks4me","_links":{"self":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/19893"}],"collection":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/users\/2889"}],"replies":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/comments?post=19893"}],"version-history":[{"count":0,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/19893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media\/19894"}],"wp:attachment":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media?parent=19893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/categories?post=19893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/tags?post=19893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}