Despite structural demand existing in India and the potential opportunity it provides, healthcare provisions are still riddled with challenges including inadequate health infrastructure and inequality in the quality of healthcare services provided.
Enter diagnostics sector.
There are two categories in the diagnostics industry - pathology and radiology.
While pathology is related to testing of major illness and other testing services, radiology covers aspects such as x-rays, ultrasound and CT scans.
Over half of the population of India lives in rural areas and tier 3-4 cities. As diagnostics companies expand their reach to rural areas, imagine the growth opportunity.
Remember that India's rising life expectancy will lead to an increase in lifestyle diseases. This will require more specialised testings by diagnostic players which will lead to higher profits.
The diagnostics sector is one of the best poised sectors for long term growth compared to the other sectors in medical fraternity such as pharma manufacturing and hospital chains.
The sector enjoys higher margins, better return ratios and is subject to lesser regulatory mandates as compared to pharma and hospital businesses.
With the rise in penetration of health insurance, use of lab reports for digital medical consultancies etc., the diagnostics sector has very long term tailwinds in its favor.
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