Pricing pressures, regulatory worries for Dr Lal Pathlabs and Thyrocare

While the organised sector is gaining market share, there are near-term challenges for Dr Lal Pathlabs and Thyrocare

A muted June quarter performance on the back of pricing pressures coupled with worries on regulatory action could hamper the near-term outlook for diagnostic companies. The largest listed diagnostic players, Dr Lal Pathlabs and Thyrocare Technologies have indicated that competitive intensity in the sector is high. Given the focus on higher volumes, some of the pressures on pricing could continue to hamper the profitability of the companies.

Disappointing June quarter

This was reflected in the June quarter performance both on volumes and margins. Thyrocare, for example, reported 11 per cent sales growth which was significantly below analyst estimates. In fact, sales growth