India's Diagnostics Industry: Poised for Robust Growth

India's diagnostics industry is projected to grow at a 14% CAGR over the next five years due to increased healthcare spending, market consolidation, and improved services by organised players. The current market is fragmented, with organised chains having a significant growth opportunity.

The Indian diagnostics industry is on the verge of a significant expansion, forecasted to grow at a 14% compounded annual growth rate (CAGR) over the next five years, as per a recent report by PhillipCapital. This anticipated growth is fueled by higher healthcare investments, an ageing populace, and increased income levels.

Healthcare reforms by the central government and the broader availability of advanced testing are also prime contributors to this growth. The report suggests that while the overall sector is thriving, organized diagnostic companies are set to outpace this expansion due to their efficient and advanced service offerings.

Currently, the Indian diagnostics market is markedly fragmented. While organized diagnostic chains represent just 15% of the market, hospital-based laboratories account for 37%, and unorganized standalone labs hold a 48% share. This fragmentation presents a substantial opportunity for organized players to expand via acquisitions and industry consolidation, navigating an under-penetrated market compared to global benchmarks.

(With inputs from agencies.)