The stocks of diagnostic service providers have been standout performers within the healthcare sector over the past year, posting returns between 16 and 80 per cent. In comparison, the Nifty 50 saw returns of 8 per cent. Stable pricing, expectations of gradual volume growth, and market share expansion for the larger players have stoked increased optimism for listed companies.
India's diagnostics sector is accelerating capacity addition and geographic expansion, as large chains and regional players invest in new laboratories, integrated centres and dense sample collection networks to tap rising demand for preventive, advanced and precision testing.
Brokerages have cut their estimates of listed diagnostics players for the financial year 2023-24 (FY24) after mixed December quarter results and muted near-term outlook. Their volumes and realisations will be under pressure due to weakness in Covid-adjusted performance and higher competitive pressures, the brokerages believe. In a post-Q3 results note on Dr Lal Pathlabs, Bhavesh Gandhi of YES Securities pointed out that there has been a lack of volume revival in recent quarters, with an increasing likelihood that FY24 too would be a work-in-progress year for the company's initiatives to bear fruit.
Amazon India has launched Amazon Diagnostics, an at-home healthcare service that allows customers to book lab tests, schedule appointments and receive digital reports directly via the Amazon app. Initially available in six cities-Bengaluru, Delhi, Gurgaon, Noida, Mumbai and Hyderabad-the service covers more than 450 PIN codes and offers access to over 800 diagnostic tests.
Not far back, in 2010, SRL Diagnostics, promoted by former Ranbaxy promoters Malvinder and Shivinder Singh, acquired the diagnostic services business of Piramal Healthcare for Rs 600 crore (Rs 6 billion).
An acute drug shortage in the US and stable pricing along with product launches are likely to boost revenues of India's pharmaceutical companies during the first quarter of this financial year, analysts said. Most brokerages estimate a top line growth of around 14-15 per cent, with earnings before interest, taxes, depreciation, and amortisation (Ebitda) growth of 24-30 per cent for Q1 of FY24. Hospitals are, however, likely to report lower occupancy rates, and diagnostics companies may witness an impact from delayed monsoon.
Analysts are expecting pharmaceutical companies to post sales growth of 10-11 per cent in the second quarter this financial year while the Ebitda (earnings before interest, tax, depreciation, and amortisation) margins are anticipated to improve by about 110 basis points. Ebitda improvement will be led by lower input costs because prices of active pharmaceutical ingredients (APIs) are 5-15 per cent lower year-on-year (Y-o-Y). Axis Capital said sales growth would be around 10 per cent, of which growth in the India market would be 11 per cent or so.
'We urge the government to have discussions with private labs on the actual cost of running a test.'
commercial airlines and air navigation service providers have to carry out random drug tests on at least 10 per cent of their flight crew and air traffic controllers every year.
Ajit Mishra, vice president, Research, Religare Broking, answers your stock market queries.
The pharmaceuticals sector is expected to post a revenue growth of around 13.5 per cent and a net profit growth of 30.3 per cent for the third quarter of 2023-24 (FY24), riding on the approval for niche drugs in the US market, fall in raw material prices and correction in shipping rates. In the healthcare segment, hospitals are expected to post revenue growth of 13 per cent during the coverage, while net profit growth would be around 37 per cent, ICICI Securities said in a note. However, the performance may not be comparable on a sequential basis due to the offset of the festive season in Q3FY24, the analysts noted.
Companies featuring in the Next 500 list are mostly mid-sized and termed as the 'small wonders' by the magazine.
Experts emphasise on the need to curb the spread of the novel coronavirus using strategic and pragmatic approaches in villages as well as Tier 2 and Tier 3 cities and towns, which are reporting increased COVID-19 infections and deaths during the ongoing second wave of COVID-19 pandemic.
A lot of mid and small-caps are in the bubble zone and command high valuation and have corrected sharply.
Analysts caution against volatility and recommend buying stocks of companies that are on strong fundamental footing that have been beaten down badly in the recent carnage.
Hospitals to recover from sluggish Q3; diagnostics' growth rate at pre-Covid levels.
Shares of small-cap companies have been on a roll with the S&P BSE Small-Cap index hitting a new high in intra-day deals on Thursday. The rally has been fueled by an up move in stocks of chemicals, cement, graphite electrode makers, pharmaceuticals and information technology (IT) shares. In the past two weeks, since March 25, the index has outperformed the market by gaining 7.3 per cent. In comparison, the S&P BSE Midcap index was up 6.1 per cent, while the S&P BSE Sensex gained 3.6 per cent during the same period.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
75 companies can dole out Rs 1.1 trillion from the 'extra cash' to shareholders.
Indian companies are now more confident about the execution skills of local banks.
Financial shares were the top losers.
Unfavourable secondary market conditions aren't a big concern for IPOs by good quality companies.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
These consistent performers are expected to maintain momentum.
Among key stocks, Tata Motors, Hero MotoCorp, L&T, Wipro, ICICI Bank, Dr Reddy's Labs and ICICI Bank, all up between 1%-3%
The bouquet of Covid-19 tests that most diagnostic labs are offering include antibody tests (blood tests), rapid antigen tests (point of care tests that detect the presence of an antigen from a nasal or throat swab in case of SARS-CoV-2), and reverse transcription-polymerase chain reaction (RT-PCR) tests.
'The more people get tested, the more people will come under isolation. So the spread will get limited with testing.'
Metal shares were the top gainers with Hindalco up over 5%.
Ajit Mishra, vice president, research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
When Prashanth Reddy's father was in an ICU he could not find a lab that would deliver a blood infection test report in 24 hours. That's where iGenetic Diagnostics, which uses molecular techniques next generation sequencing, came in.
'The recent US jobs report has eased fears of a hike in the Fed meeting.'
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances