Heating up. Facing cost pressure, diagnostic players in catch-22 situation on price revision

After having a dream run during Covid times, with fresh investments pulling in new entrants, the diagnostics industry in India is now in a catch-22 situation. The recent appreciation of dollar has led to an escalation in cost of inputs, including consumables, while fierce competition is not allowing the players to take a price rise fearing loss of business.

As margins start to squeeze, the past two months saw several players implementing a price rise across diagnostic tests, although insignificant. Between 2020 and 2021, when the demand for Covid and non-Covid diagnostics tests was at the peak, investors and entrepreneurs took a plunge with heavy investments towards building capacities and recruiting manpower at up to 1.5x the salaries.

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