The former Ranbaxy promoters, the Singh brothers, have been on an acquisition spree to build global entities of their healthcare and financial services businesses, that come under the Fortis and Religare brands.
One of the latest was by the group's pathology lab chain, Super Religare Laboratories, when it snapped up the entire laboratory business of Piramal Healthcare for Rs 600 crore (Rs 6 billion).
In an interview with Joe C Mathew, chief executive officer Sanjeev Chaudhry talks oft SRL's growth plans. Edited excerpts:
What will be the size and scale of SRL operations, post acquisition of Piramal's laboratory business?
The combined entity will have 185 labs across India. While SRL had a pan-India presence on its own in pathology services, the acquisition has brought in similar strengths in radiology services, making us a truly integrated laboratory services provider in the country.
We are the biggest player, with over Rs 400 crore annual revenue. SRL will add another 25 laboratories from the SRL side by September, significant even from a global perspective.
Pathology services are mostly provided by location-specific firms. How significant is your national presence when the industry is so fragmented?
There are over 50,000 pathology and diagnostic labs in the country. However, only 200 are accredited and 40 of these are SRL labs.
Thus, we have a significant presence in the quality-accredited lab service business. We are also the fastest growing lab chain and (on an average) have been adding one laboratory each to our network every month over the past three years.
And, one collection centre is being added every day for the past three years.
How important is SRL's association with Fortis in generating business? Is the company running in-house labs in all Fortis hospitals?
It is important for us, but SRL is not just dependent on Fortis. We have associations with dozens of hospitals all over the country.
For instance, the Piramal acquisition helped us inherit at least two dozen such operational agreements with hospitals.
How do you withstand the growing competition when, in addition to local labs, there are also global brands like Quest that are interested in Indian business?
Typically, standalone laboratories get 20-25 per cent business from bulk customers, i.e, hospitals and nursing homes. In our case, it is at least 50 per cent.
Our Fortis connection is also of great advantage.
Further, of the 4,000 types of tests we offer, over 500 are unique to SRL. At least 50 of them are unique in the world. That's the major differentiator. Strictly speaking, there are no global brands in radiology services.
In pathology, there are a few and some of them have entered India, too. However, India is a different market; it is not easy to adapt to local conditions.
We have unique strains of disease like fever and TB, as such illnesses are common here. We can detect them, while others may not.
We have a dedicated research and development centre to develop new tests. We are even creating a range of fusion tests where pathology tests will help us interpret the problem and suggest the specific area that needs radiology tests.
What are the chances of SRL turning a global brand?
India is a large country and we are the only national player here. In that sense, today we have gained the ability to enter that global league.
SRL is already a leading player in Dubai and has plans to enter Africa. We also have the advantage of partnering with Fortis, whereever it has presence.
Any plans for an IPO?
I think every successful growth-oriented company will opt for increasing its capital base through public listing. In our case, the critical mass is already there. It's only the timing (for listing) that needs to be decided.
Image: Sanjeev Chaudhry