SRL Diagnostics has emerged as the largest pathlab chain in the country after it acquired its joint venture partner in Kerala, DDRC, for ₹350 crore last month.
With the addition of 220 labs owned by the 35-year-old DDRC in Kerala, Karnataka and Tamil Nadu, the number of diagnostic labs with the SRL network has gone up to about 430, making it the largest player in the country, SRL CEO Anand K told BusinessLine . SRL had become a 50:50 joint venture partner in Kochi-based DDRC, promoted by Joy Joseph and his family, when it first acquired a stake in 2010.
“We have a very good distribution across the country now. We already are leaders in the east while we have significant presence in northern and western India. South was our weakest link. This acquisition has addressed that issue,” Anand said.
He added that DDRC-SRL will continue to have the same name DDRC, which is a known name across Kerala-- where it has over 200 labs of which eight are very big. Besides, it has 15 labs in southern Tamil Nadu and five labs in southern Karnataka. The number of SRL labs in the region is around 300, the CEO said.
This also makes SRL the second largest player in terms of revenue. In financial year 2019-20, its combined revenue stood at around ₹1,170 crore.
Eyeing better growth
Anand said he was expecting the company to post a better growth in the current financial year. “During the fist quarter of the current fiscal, the non-Covid revenues suffered the maximum impact due to the lockdown. Second quarter onwards, non-Covid business started picking up. By the third quarter, we recovered almost 95 to 100 per cent of our non-Covid business. The same trend is continuing in the fourth quarter,” he said.
During Covid times, home collections increased by almost three times. The company hired more skilled staff to cater to home collections “People are becoming more and more aware of the need for testing. They are also more aware of accredited labs. For example, the fact that the Indian Council of Medical Research made NABL accreditation compulsory for Covid-19 tests has helped major pathlab chains like SRL.”
No entry barrier
In India there is no entry barrier for opening up a pathlab. NABL certification itself is voluntary not a mandatory requirement, Anand said.
“This has also created a consciousness about quality in people’s minds. Because we will be able to provide quality services as well as a safe, secure and hygienic environment for the patients to come and give their samples. This will help labs like ours to grow faster,” the SRL chief said.
Over the last two weeks, there is a surge in testing as well. “While we were testing around 8,000 to 10,000 samples a day two-three weeks ago, now we are carrying out 17,000-18,000 tests a day,” Anand said. This is because of the spurt in new cases as well as travel-related requirements.
He is confident that next year would be positive for the industry. “We are seeing that people’s interest in health has gone up resulting in the increase in preventive and wellness testing. Besides, digital uptake has also gone up. People are booking their tests through apps. The digital transformation has happened faster. Home collections are picking up because of that as well,” Anand said.