SRL Diagnostics to take Indian model of managing labs abroad

Chennai November 27, 2013: SRL Diagnostics will try out its Indian model of managing laboratories in foreign countries to fire up its revenue, according to Sanjeev Vashishta, Chief Executive Officer.

The diagnostics arm of Fortis Healthcare runs 250 diagnostic labs across the country, where it conducts pathological and radiological tests.

It says the business of administering testing centres is opening up African and West Asian countries.

The company currently operates three labs in Dubai, Sri Lanka and Nepal, and 50 collection points outside India, which are stop-over points for test samples originating from countries of the Commonwealth of Independent States, Africa, and West Asia.

It recently won a contract to run five diagnostic centres in Congo.

“These are 5-10-year contracts. Now, this segment contributes to 7 per cent of our revenue. Going forward, with our overseas forays, we see it growing to 25 per cent. Eleven per cent of the labs we manage in India belong to local promoters. We are looking to replicate this model overseas,” said Vashishta.

ORGANISED DIAGNOSTICS

The company reported a revenue of Rs 650 crore in fiscal year 2012-13 and has set a target of Rs 770 crore for the current fiscal. It has drawn up plans to scale up the number of tests conducted in a day from one lakh to 2.5 lakh in two years to achieve its revenue target.

It believes the largely untapped market for organised diagnostics – about 90 per cent of the market lies in the unorganised segment – holds great potential.

“But making use of such a disparity in this $2.5 billon market depends on educating the public about the advantages of organised healthcare.”

Managing the labs of hospitals is another segment that will drive growth.

It recently won a contract from the Himachal Pradesh Government to run 24 of its testing centres, taking the tally of managed hospital labs to 90.

With a debt equity ratio of 0.3, the company is “comfortable” in terms of financing.

Plans for an Initial Public Offer are on track and it is likely to materialise in two years. Hindu Business Line