RELIANCE'S ENTRY INTO DIAGNOSTICS INDUSTRY MAY LOWER PRICES

Reliance Life sciences (RLS) considering a foray into India's $9.6 billion diagnostics testing industry,established players feel it could bring prices,in turn,resulting in better volumes.

Diagnostics player Thyrocare,felt RLS entry into the diagnostics space could follow a disruptive pricing model like their telecom venture of Reliance Jio.

In the recent days 95% of the laboratories are working under capacity with machine under idle.Industries are benefited because of higher competition entering the arena  and patient volumes going up.

Thyrocare and RLS had tied up in 2003 to offer DNA technology based testing services

There are 100,000 diagnostic labs in India. There are only 1076 are National Accredition Board for Testing and Calibration Laboratories accredited.

Pathology test is in the range of Rs.280 and Rs.350.

Pathology is a medical specialty that determines the cause and nature of diseases by examining and testing body tissues.

Around 56% of the market size is from pathological test,with rest from radiology tests.

The market is forecasted and analysed that 11% growth rate over the next five years,with preventive tests.

Here, Reliance tries to tap the existing small neighborhood clinics as partners and provide them with a brand and centralized tesing facilities and it would be difficult to maintain quality at the customer point of contact. Apart from joining with local entrepreneurs, RLS can also utilise  a portion of its existing retail outlets to act as collection centres for the diagnostics business.

                                      

                                             Reputed  players such as Dr Lal PathLabs, Metropolis, Thyrocare, and SRL Diagnostics saw 13% revenue and 14% earnings before interest,taxes,depreciation,and amortisation CAGR over FY14-19. Growth are increased  over the past few years because of the stiff competition in the business to business space and expansion into lower tier markets.