SRL Diagnostics, the healthcare arm of Fortis, is eyeing expansion into fast-growing markets of Africa and CIS countries. SRL, which has about 40 per cent share of the organised diagnostic market in India, plans to open labs and collection centres countries such as Congo, Kenya and Nigeria in Africa. It is also looking at tie-ups in CIS countries.
The diagnostics market in India is estimated at $2.5-3 billion.
SRL, with revenue growing 20 per cent year-on-year for FY13 (???), has 5,300 collection points and 270 labs across 500 cities, covering around half of the country’s districts. It is expected to clock revenue of Rs 750 crore for 2013-14.
SRL recently tied up with a local promoter, which will make the investment, in the Democratic Republic of Congo to operate and run five diagnostic labs (radiology and lab medicine).
The annual revenue for the clinical diagnostic sector in East Africa is estimated to be $80 million in 2009, expected to grow at 12.4 per cent compounded annually to $183 million by 2016. Given the scarcity of high-end diagnostics in the CIS countries, Sanjeev Vashishta, chief executive, said the company sees significant opportunity there.
Pathology makes up 79 per cent of SRL’s business, radiology 16 per cent and wellness (preventive health check) and CT Testing five per cent.
“At the moment, the company has a capacity utilisation of a little over 50 per cent. Expansion of reach through opening more collection points and introducing new tests would help in filling the capacity at a little cost,” Vashishta said. In 2010, SRL acquired Piramal Diagnostics for Rs 600 crore to become the largest diagnostics company in India. Founded by billionaire brothers Malvinder and Shivinder Singh, it saw a change in ownership when Fortis Healthcare (controlled by the Singh brothers) took 74.59 per cent for Rs 803 crore in 2011.
Through pre-IPO placements, Avigo Capital Partners picked up 9.27% in SRL for about Rs 100 crore while Sabre Partners invested Rs 50 crore to acquire about four%. Logos Holding, Prime Trust and Religare Group companies hold the remaining stake.
"Unfortunately, the diagnostics industry in India is not regulated at the moment. It is the hour of the need if we want to provide quality services to the masses. Good quality diagnosis will help in accurate prognosis and early and effective treatment. The government should look at making accreditation mandatory for the diagnostic service providers," Vashishta said.