AI and ML-based algorithms will provide impetus for Next-Gen diagnostics: Anand K, CEO, SRL Diagnostics

COVID-19 proved to be a dampener for most businesses. However, healthcare, pharma and diagnostics in particular, had a different story to tell.

SRL Diagnostics, with a chain of over 400 testing laboratories in India, conducted 44 million tests in 2022, which is almost double the 23 million tests done in the previous year.

In an interview to Moneycontrol, Anand K, CEO, SRL Diagnostics, talks about the evolving testing scenario in India after COVID-19 and how the company is gearing up for next generation (Next-Gen) diagnostics.

Among other things, Anand says SRL has invested significantly in research and development (R&D) with the aim of cutting down the cost of testing in India, while enhancing accuracy and aligning it with the local population. Edited excerpts from the interview:

SRL diagnostics recently announced Q4 results. How do you see the performance of the company?

This financial year has been very good for us so far, supported by the COVID-19 pandemic. (This year), we reported net revenue of Rs 1,605 crore, compared to Rs 1,035 crore in the previous year, which is a growth of about 55 percent. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) for this year is at Rs 425 crore, which is a margin of 26.5 percent, compared to the margin of 19.3 percent in the previous financial year.

We ended up doing about 44 million tests this year, compared to 23 million tests last year.

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How do you see the testing patterns evolving in India, if we compare the pre and post-COVID-19 situations?

Testing for COVID-19 actually dropped from being about 30 percent of the revenue in January to almost 7 percent in March. (Going forward), we believe about 3-4 percent of our overall work will be related to COVID-19 testing and the rest will be non-Covid, because we are not anticipating any big wave this year.

Post COVID-19, testing has become a household word. What are SRL’s plans in terms of a technology integrated system to connect the masses from tier 2 and tier 3 cities?

COVID-19 has brought testing labs to the forefront. Earlier, labs were not seen as an inclusive part of treatment models, but now diagnostics, as a model, has become significant in the treatment of diseases.

For tier 2 and tier 3 cities, we are now trying to penetrate further and deeper into the districts and towns by setting up laboratories in many town headquarters, district headquarters and also creating a hub where we will have collection centres set up with hospitals so that testing facility can be made available for patients across all geographies.

How do you plan to use technology for Next-Gen diagnostics?

We are using Artificial Intelligence (AI) and Machine Learning (ML) solutions for creating algorithms for digital pathology, mainly in cervical cancer and breast cancer.

We are improving our capabilities for Next-Gen diagnostics. We have very good traction in Next-Gen diagnostics like genomics, proteomics, molecular pathology, oncology metabolomics and digital pathology. We are also adding a lot of tests in genomics, especially in the field of reproductive medicine, oncology, and inherited disorders.

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How crucial is the Public Private Partnership (PPP) model for the testing needs of people in India?

Yes, it is very important, because (of) the network and the number of labs and capabilities that the private players currently have. (It would) make a lot of sense for the government to tie up with the private players so that the reach and access of all these tests are improved. The government is already doing certain things, such as the RNTCP program for tuberculosis (TB). We are one of the partners with the government for the TB eradication program. We offer services in many cities and towns for TB testing.

What are the company’s plans for expansion in India? Are you targeting any specific region in the country? 

We are looking at how we can increase our network through a hub-and-spoke model. Currently, we have around 2,500 customer touch points, and we plan to take it to 3,500 by the end of next year. We are also looking at entering some of the white spaces…in Maharashtra, Uttar Pradesh, Telangana and Andhra Pradesh. These are the regions where we are focusing on getting in deeper.