Home testing kit cos gain as diagnostics lose on Covid revenue

One’s loss is another’s gain. This is definitely the story between the Covid home testing kits and lab test diagnostic centres. Demand for Covid home testing kits is increasing and contributing significantly to the device makers’ Covid portfolio.

Mylab, the first in India to get approval for its Covid testing kit - Coviself - has witnessed a growth of 400% since its launch, Hasmukh Rawal MD of Mylab told DH.

Rawal said that when they began selling Coviself, a few 100 kits were being bought each day. Currently, about 15% of the total revenue now comes from the home testing kits, Rawal said. This was a meagre 5% when Coviself was introduced in India. And, its Covid portfolio, which includes mobile testing vans among other products, constitutes 70% of the revenue. Home testing kits constitute 25% of the Covid portfolio’s revenue.

“We have a market and it will expand as schools plan to re-open. In other parts of the world, schools have opened up based on rapid testing for Covid. Our schools too cannot be shut forever. This will further boost our market”. The market for this will be increasing at least for the next two years, said Rawal.

Also read: Centre flags decline in Covid testing, asks states to increase it

US-based pharma major Abbott, another player in the home testing space, had said in its Q3 results that its global Covid-19 testing-related sales were $1.9 billion in the third quarter.

The growth of this segment comes at a time when the Covid portfolio for testing labs like SRL Diagnostics and Metropolis is gradually coming down.

For instance, for Metropolis the Covid portfolio’s contribution to the revenue was 34% in Q2 of FY21 fetching almost Rs 100 crore. This has come down to 14% and fetching only Rs 42.8 crore in Q2 FY22. Even sequentially, the Covid revenue came down from 19% to 14%.

SRL has the same story. In its analyst call for the Q2 FY22, Anand K, the CEO of SRL Diagnostics said, “Covid contribution to the overall revenue was 18% versus 28% in Q2 FY21.”

It was no different for Dr Lal Path Labs. Revenue from the Covid portfolio in Q2 FY22 stood at Rs 51 crore accounting for 10% of the total revenue against 22% in Q2 FY21.

Tushar Manudhane, Institutional Research Analyst - Healthcare at Motilal Oswal Financial Services said that while it is difficult to quantify the market for such home testing kits, he agreed that the demand for home test kits for Covid is increasing.

“While the RT-PCR based testing is a gold standard in case of Covid diagnosis, the home-based antigen test has also become prominent in the recent past. The share of the Covid test had reduced considerably till Q2FY22 as reflected in the performance of listed companies like Dr Lalpath Lab and Metropolis. It would be interesting to watch out for the recent performance, given the surge of Covid cases and better availability to antigen testing kits”, said Manudhane.