Agilus Diagnostics lowers marketing spend 2 years after rebranding

(This report has been updated)  Nearly two years after its rebranding, Agilus Diagnostics (formerly SRL Diagnostics) is now confident about reducing marketing expenses initially undertaken to create awareness around the name change. From nearly 5 per cent of revenue in 2024-25 (FY25), marketing spend is expected to decrease to 2.5-3 per cent in 2025-26, a senior executive said.

 

Speaking to Business Standard, Anand K, managing director and chief executive officer of Agilus, which rebranded in May 2023, said that while some marketing expenditure will continue in the fourth quarter of FY25 and first quarter of 2025-26 (FY26), spending is expected to return to usual levels thereafter.

 

“We changed our brand identity in mid-2023, which impacted overall growth and revenues. Over the past two quarters, we’ve seen better growth. A sizeable amount was spent on creating awareness — both among doctors and the general public — through mass media campaigns and newspapers,” he said, adding that the company recently brought on board actor Anil Kapoor as its brand ambassador.

 

In FY25, an additional Rs 50 crore was spent on marketing over and above the usual budget. Typically, Agilus allocates 3-3.5 per cent of its revenue to marketing, which increased to around 5 per cent in FY25. However, Anand is confident that with brand awareness now well established, marketing expenses will drop to 2.5-3 per cent in FY26.

 

He acknowledged that the rebranding exercise impacted both the top line and bottom line. For FY25, quarterly revenue from the diagnostics business ranged between Rs 330 crore and Rs 372 crore.

 

“We haven’t lost any business, nor has revenue declined, but overall growth has been affected. Some large public-private partnership contracts have been scaled down, which has also had an impact,” Anand said.

 

The rebranding was necessary as the SRL brand was owned by former promoter entities linked to Malvinder and Shivinder Singh. The company took a calculated decision to transition to the Agilus brand. 

 

Beyond marketing, Agilus plans to continue expanding its network in FY26. As of December, it had 4,126 customer touchpoints and typically adds 600-800 touchpoints annually. The diagnostic chain also adds eight to 10 laboratories (labs) each year, with its current count exceeding 400 labs across the country.

 

“Our focus is on growth in core markets — Delhi-National Capital Region (NCR), Mumbai, and Kolkata. We’re also exploring acquisitions in select geographies and niche segments. We also aim for a more stable operating earnings before interest, tax, depreciation, and amortisation (Ebitda) margin of 21-22 per cent,” Anand said. For the first nine months of FY25, the operating Ebitda margin stood at 17.5 per cent.

 

Currently, the South contributes 32 per cent of revenue to the Delhi-NCR-headquartered Agilus, while the North accounts for around 30 per cent.

 

Anand believes there is ample room for expansion in the South. “We have a strong presence in Kerala, but there is growth potential in Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu,” he said, adding that the company also wants to expand across large parts of Uttar Pradesh.

 

Oncology remains a key focus area, with Anand noting that it is growing faster than other segments. Currently, 7-8 per cent of revenue comes from oncology tests. In February, Agilus entered a strategic collaboration with Lucence for molecular testing technologies in cancer detection, treatment, and monitoring.

 

Lucence’s proprietary technology will allow Agilus to expand its oncology capabilities, offering liquid biopsy-based screening for early cancer detection, recurrence monitoring, and therapy personalisation.

 

With roughly 1.4 million new cancer cases and nearly a million deaths annually in India, there is a critical need for advanced cancer testing. Industry insiders estimate that demand for cancer testing will grow at a compound annual growth rate of 17.5 per cent from 2023 to 2028.