Revenue of diagnostics players this fiscal may record a 5-7 per cent de-growth with growing preference for self-test kits and a sharp fall in Covid-19 and allied tests with the pandemic waning away, global analytical company CRISIL said in a report released on Wednesday.
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This is contrary to a stellar 30 per cent growth last fiscal driven by a severe second covid wave and pent-up demand for regular tests, the report said.
This is contrary to a stellar 30 per cent growth last fiscal driven by a severe second covid wave and pent-up demand for regular tests, the report said.
Decline in revenue along with higher operating expenses, largely marketing and advertisement related, will lead to moderation in operating margins to pre-pandemic levels of 24-25 per cent, which is still healthy. Last fiscal, higher realisation from covid allied tests and better operating leverage resulted in operating profitability reaching a decadal high of around 28 per cent.
“However, good cash generation, prudent capital spends (mainly on diagnostic equipment) and low debt levels will keep balance sheets at healthy levels, resulting in ‘stable’ credit profiles for diagnostic players,” said CRISIL.
