India’s “silent epidemic”: 2 diagnostic shares to look at as way of life ailments surge – Inventory Insights Information

India is coping with a silent epidemic. As per a 2017 report from the Indian Council of Medical Research (ICMR), way of life ailments, additionally known as Non-Communicable Diseases (NCDs), had been chargeable for 61.8% of whole deaths in India in 2016. Other than NCDs, power diseases are additionally a rising concern.

As per a report by The Lancet, out of round 19.97 million new most cancers instances reported in 2022, 1.38 million had been from India alone. The numbers have deteriorated as we battle air pollution, sedentary existence attributable to urbanisation, and excessive stress from work and social life, which has resulted in elevated alcohol consumption.

Amid this epidemic, improvements in analysis are disrupting the healthcare sector. According to a report by the IMARC Group, the Indian diagnostic testing market reached USD 11.38 billion in 2024, with oncology and cardiology being the key contributors. The sector is predicted to develop at a CAGR of 9.22% to achieve USD 26.73 billion by 2033. Another report reveals that the full diagnostic companies market is dominated by pathology companies, which maintain a forty five% share, adopted by radiology companies with a 30% share.

With the growing demand for preventive care measures throughout demographics, two firms poised for dominance are Dr Lal PathLabs and Thyrocare Technologies Ltd.

Two Small-Cap Diagnostic Companies Disrupting the Indian Healthcare Sector

Dr Lal PathLabs

With a buyer base of over 28.8 million, greater than 6,600 affected person service centres, over 12,300 pickup factors, and 290-plus labs, Dr Lal PathLabs has deep penetration throughout completely different tiers. Beyond home boundaries, the corporate has a presence in additional than 23 international locations. The firm has additionally built-in with the Ayushman Bharat Digital Mission (ABDM), which allows it to register sufferers by capturing and verifying particulars from their ABHA (Ayushman Bharat Health Account) quantity.

Focusing on innovation, the corporate has just lately turn into the primary within the nation to deploy a deep learning-based AI module to detect metastasis and micrometastasis in lymph node most cancers.

The firm has additionally just lately added Illumina’s NovaSeq X to its genomics division. The system is able to producing over 20,000 entire genomes yearly to push the boundaries of genetic sequencing. Dr Lal PathLabs has additionally turn into the primary firm to introduce Amyloid Typing by Laser Capture Microdissection & Mass Spectrometry. The check is able to detecting the organ during which misfolded and irregular amyloid proteins are accrued. The firm has additionally added a spread of cfDNA liquid biopsy exams.

Dr Lal Pathlabs has additionally outperformed its opponents in the case of excellence. The firm has acquired a 98% rating within the College of American Pathologists (CAP) Proficiency Testing. CAP reveals the check reliability and covers over 16 disciplines, akin to haematology, microbiology, molecular diagnostics, and scientific chemistry. The firm has additionally persistently acquired a excessive rating in EQAS Performance Testing at 98.3% of Satellite Labs.

Dr Lal PathLabs can also be contributing to Environmental, Social, and Governance (ESG) initiatives. The firm has put in a 3.18 megawatt (MW) photo voltaic system throughout its services to generate inexperienced power. It has additionally put in R32 refrigerant-operated inverter ACs to assist preserve the ozone layer. All the labs of Dr Lal PathLabs are outfitted with effluent therapy vegetation for wastewater therapy, and the corporate can also be encouraging using electrical bikes for pattern assortment.

Besides innovation, the corporate has additionally carried out nicely in Q2 FY26. It posted a complete income of ₹731 crore, up 9.1% quarter-on-quarter and 10.8% year-on-year. The web revenue for the interval stood at ₹152 crore, up from ₹131 crore in the identical quarter of the earlier monetary yr. Over the final ten years, the revenue has grown at a CAGR of 18%.

The key optimistic from the financials is that Dr Lal PathLabs is sort of a debt-free firm. As of March 2025, its money from working actions stood at ₹569 crore, a rise of ₹34 crore in comparison with March 2024. The dividend yield additionally stood at 0.8%.

Dr Lal PathLabs 5-Year Financial Performance

Particulars	FY21	FY22	FY23	FY24	FY25
Sales (₹ in crores)	1,581	2,087	2,017	2,227	2,461
Operating Profit (₹ in crores)	436	561	490	609	698
Net Profit (₹ in crores)	296	350	241	362	492
EPS (₹)	34.99	41.37	28.65	42.85	58.28

Dr Lal PathLabs’ share value surged by 13.5% within the final six months, 2.6% over the span of a yr, and 34.7% in 5 years. In September 2025, promoter holding dropped barely by 0.6%, whereas overseas institutional buyers (FIIs) and home institutional buyers elevated their holdings by 0.2% and 0.6%, respectively.

Reasons to incorporate Dr Lal Pathlabs are the rising demand for his or her SwasthFit preventive well being packages and easy residence assortment companies that align with the rising shopper demand. Operationally, the corporate’s hub-and-spoke mannequin helps in environment friendly pattern logistics and quicker turnaround occasions, whereas its digital interface helps on the spot reserving, reporting, and CRM integration.

Thyrocare Technologies Ltd.

While nonetheless increasing its attain in smaller cities, Thyrocare Technologies at present has processing labs in 37 main cities throughout India and in addition has a worldwide presence with branches in Tanzania. The firm has the aptitude of processing over 1 lakh samples and has efficiently processed greater than 17 crore samples up to now.

The key energy of the corporate is its community of over 10,000 lively franchises, reflecting a 20% year-on-year progress. At current, it has a buyer base of over 50 lakh sufferers, exhibiting a 12% annual progress. Of the full samples collected by Thyrocare, 96% had been processed at NABL-accredited labs.

To compete with Dr Lal PathLabs and different notable names within the trade, akin to Agilus Diagnostics, the corporate has emphasised high quality. The consequence? In Q2 FY26, complaints decreased by 67% year-over-year to three.8 complaints per million exams.

To scale its operations, the corporate is repeatedly exploring partnerships with on-line diagnostic aggregators, healthcare platforms, insurance coverage firms, and corporates for worker wellness programmes.

In the previous, to increase its attain in Andhra Pradesh, Uttar Pradesh, Odisha, and Telangana, the corporate acquired the diagnostic and pathological companies of the Vimta Lab. Another acquisition was Polo Labs, which has helped the corporate increase its presence in Northern India.

In Q2 FY26, the corporate reported income of ₹217 crores, up from ₹193 crores within the June quarter and ₹177 crores in Q2 FY25. The web revenue for the interval stood at ₹48 crores, representing a 26.3% quarter-on-quarter improve and an 84.61% year-on-year rise. Similar to Dr Lal PathLabs, Thyrocare has additionally managed to scale back its debt and is sort of debt-free as of September 2025. Another optimistic to not overlook is that the corporate has maintained a wholesome dividend payout of 135% and has diminished its working capital necessities from 17.1 days to 12.8 days.

Thyrocare Technologies 5-Year Financial Performance

Particulars	FY21	FY22	FY23	FY24	FY25
Sales (₹ in crores)	495	589	527	572	687
Operating Profit (₹ in crores)	171	236	123	140	190
Net Profit (₹ in crores)	113	176	64	69	91
EPS (₹)	21.4	33.3	12.2	13.4	17.3

Thyrocare Technologies’ share value has elevated by 59.13% over the previous six months, whereas its one-year and five-year returns had been 46.79% and 20.35%, respectively, indicating rising curiosity amongst merchants and buyers in current occasions. FIIs have additionally elevated their holdings in Thyrocare by 1.62% to 4.85% within the September quarter of FY26. However, the downside is that 85.8% of the full promoter holdings are pledged.

Although the corporate’s gross sales progress up to now 5 years is down by 9.62%, and the return on fairness stands at 13.9% during the last three years, the explanation to incorporate this firm is its robust B2B community, deep automation-led diagnostic mannequin, and entry to a broader healthcare ecosystem submit 66.1% stake acquisition by PharmEasy.

Dr Lal PathLabs vs Thyrocare Technologies vs Peers

A fast snapshot of the valuation of key names within the diagnostic sector..

Dr Lal PathLabs and Thyrocare Technologies are buying and selling at premium valuations in comparison with trade median. Given the financials, this means buyers’ confidence and model worth. However, Krsnaa Diagnostics, with the bottom PE and P/B ratios, seems comparatively undervalued, suggesting attainable re-rating. Among friends, Vijaya Diagnostics instructions the best P/E but additionally signifies restricted margin of security.

Key Takeaways for Investors

While the Indian diagnostic sector is poised for progress, firms on this phase should not with out dangers. Among the lakhs of diagnostic labs, many stay unaccredited. Pricing can also be a key concern, as firms face margin compression dangers attributable to authorities hospitals and free check-up campaigns, particularly in Tier 3 cities. Additionally, excessive walk-in volumes in small cities are a purpose for concern. The sector additionally faces cybersecurity dangers associated to sufferers’ info.

Disclaimer:

Note: We have relied on information from www.Screener.in all through this text. Only in instances the place the information was not out there, have we used an alternate, however broadly used and accepted supply of data.

The objective of this text is simply to share fascinating charts, information factors and thought-provoking opinions. It is NOT a advice. If you want to think about an funding, you might be strongly suggested to seek the advice of your advisor. This article is strictly for educative functions solely.

Rishabh Sinha is a seasoned monetary content material creator with over 10 years of expertise in BFSI area. His portfolio spans over 20 of India’s most trusted monetary manufacturers. Rishabh brings depth, construction, and a reader-first strategy to each piece he crafts.

Disclosure: The author and his dependents don’t maintain the shares mentioned on this article.

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