The Diagnostic industry in India has witnessed significant growth in the last few years. Factors among them are rising awareness among urban and rural populations to get timely diagnosis and treatment for disease and ailment and stay healthy has created massive opportunities for the segment. Covid-19 was the catalyst for further uplift of the market and increased the expenditure on healthcare. The Indian diagnostics market size is estimated at around $20 billion and is expected to grow at a CAGR of 12-13 percent in the next 5 years. Organized players only control 20 percent of the market.
The segment began to give more emphasis on research and quality. Chennai-based pathology chain Neuberg Diagnostics is always at the forefront of innovation and has grown the chain significantly in this space. Neuberg was founded by Gomathy Babu Sadacharam Kulandaivelu (GSK Velu) a first generation serial entrepreneur in healthcare. His knack for innovation, technology, and sharp business acumen has led Neuberg Diagnostics amongst the top fourth largest national players in the segment. “Our success is based on accuracy backed by modern infrastructure, specialized tests, customer’s trust and consistency,” says 56-year-old founder and chairman Velu.
Since its inception in 2017, Neuberg Diagnostics has recorded a CAGR of 30 per cent, outpaced the industry growth of 12-13 per cent in the last five years. It has achieved a turnover of Rs.1050 crore in FY23. The company has predominantly grown through acquisition and partnership. Even its journey started with picking up the majority stake of the top lab in Bangalore called Anand Diagnostic Laboratory. “Our core strength is acquisition, partnerships and integration for future growth, “ Velu explains. Cricket icon M S Dhoni is the brand ambassador for the diagnostic chain.
Apart from routine tests, Neuberg Diagnostics also provides high-end testing i.e. biochemistry, histopathology, genomics, metabolomics, proteomics, newborn screening, and preventative wellness i.e. radiology, cardiology & pathology investigation. The company is the leader in genomic testing with 3 states of the art genomic labs in Ahmedabad, Chennai & North Carolina USA. The company has more than 160 labs and 2000 plus collection centers all over India. 80 percent of labs are owned by us and the rest with the franchisee. We operate through a hub and spoke model,” said A G Ganesan vice chairman.
Velu’s success story is an example of the young entrepreneurs who dream of making it big. He was born in a lower-middle-class traditional Tamil family in a remote village called Aralvaimozhi in Kanyakumari district of Tamil Nadu. His father was a librarian who worked for the Tamil Nadu government. He was posted in a village near Madurai. Velu was admitted to a primary school, run by the corporation in the area. Velu completed his education in Tamil medium. He had to borrow a watch from a friend to write out his 12 th class examination.
A brilliant student Velu wanted to become a doctor to serve his village as he observed the nearest doctor from his village was 25 km away. But his dream was shattered when he missed the MBBS seat by a few marks in the entrance exam. “It is a regret in my life that I could not become a doctor,” Velu expressed his emotion.
Following his interest in life science, he got himself enrolled in B. Pharmacy (Hons) course in BITS Pilani and completed his graduation. “My mother had to sell her mangalsutra for my admission in Pilani. But after that I managed my education through scholarships. The only asset my family had was a bicycle.” He reminisced about sitting at his large office in Chennai.
Velu also did an internship at the Cancer Institute Chennai, under Professor Shantha, a known oncologist as his guide. Velu considers her as his mentor. After graduation he was compelled to take a job in a medical device supply company called IMI in 1985 to support his family with a monthly salary of Rs.2100. Eventually he did MBA from Loyola Institute of Business Administration and completed his Ph.D. in Pharmacology from IBAM, Kolkata.
After a failed partnership venture started in 1990, Velu once again took up a corporate job and became the regional head of Chiron Diagnostics Ltd in 1992. He spent a substantial period of time in China and gathered insights into international markets. He realized the Indian healthcare sector was heavily dependent on imports due to which the healthcare sector of the country was extremely fragile. The Indian landscape lacked sophisticated equipment as a result, certain diagnostic tests were either unavailable or too expensive for the masses. He found the opportunity to provide a cost-effective medical solution and set up Trivitron Healthcare. It is today one of the largest indigenous medical devices solution companies with a Rs.1000 crore turnover. Velu
He entered into the diagnostic space in 1998 and co-founded Metropolis- a pathology chain. During this time the sector has seen the entry of large players through consolidation. In 2015 Velu sold his stake in Metropolis due to some differences with his partner and founded Neuberg Diagnostics in 2017.
Neuberg today has grown as one of the top four pathology lab chains of India as well as a presence in overseas markets in UAE, South Africa, and the USA. With laboratories accredited by CAP & NABL, Neuberg has emerged as one of the fastest-growing diagnostic centers in India employing 5500 people. The other 3 largest players in the segment are Dr. Lal Path Labs, SRL Diagnostics, and Metropolis. Velu who used to ride in a scooter bought himself a Non ac Maruti 800 in 1990.
To expand its presence, recently Neuberg has unveiled its state-of-the-art national reference laboratory which houses Genomics, Transplant Immunology, Molecular Diagnostics, Proteomics and Metabolomics testing along with integrated diagnostics in Chennai. This cutting-edge facility, hailed as “Chennai’s new Healthcare landmark,” represents India’s First state-of-the-art total lab automation solution utilizing the Abbott GLP System, alongside the innovative WOW (Wellness on Wheels) concept.
While expressing his vision for the new facility, Velu says, “The launch of Neuberg’s state-of-the-art national reference laboratory and wellness center in Chennai is a witness to our promise to advance integrated diagnostic healthcare in India. With cutting-edge technology like the Abbott GLP System, we are setting new benchmarks in efficiency and precision. This facility not only marks a milestone for Neuberg Diagnostics but also reinforces our dedication to providing world-class healthcare solutions to the people of Chennai and the entire South India. The center will also be equipped with CT and MRI in the coming months and Neuberg Diagnostics will also bring a PET scan facility in Chennai soon ”
Neuberg headquarters in Chennai spanning over 50,000 square feet at OMR, includes the new National Reference Laboratory, Genomics Laboratory, Wellness Centre, and Corporate office. The new high-end lab offers an extensive array of over 6000 routine and specialized tests and have a capacity to process a remarkable number of 10000 test samples per day across pathology, microbiology, genomics, proteomics, metabolomics, and molecular biology, specializations, making it one of the largest clinical laboratory infrastructures in India ensuring efficiency and accuracy in diagnostic processes. The modern wellness center focuses on preventive wellness and is fully equipped with X-ray, ECG, Sonography, TMT, Echo, Mammography, Bone Densitometry, Eye Check, Audiometry, Spirometry etc with a total investment of Rs.50 crore.
Ganesan stated “Neuberg Diagnostics network of labs is renowned for its commitment to best-in-class quality assurance and customer satisfaction at affordable cost. All our labs are equipped with best in class technology and fully automated systems that track end-to-end sample movement from collection to reporting, eliminating pre-analytical errors. The laboratory is led by a highly experienced team of pathologists, microbiologists, biochemists, and molecular scientists, supported by technologists and an existing network of phlebotomists for home sample collection.”
Neuberg has created accessibility to state-of-the-art diagnostic technologies and possesses some of the finest clinical pathologists, biochemists, geneticists, and several other certified clinical lab professionals. “We can perform over 6000 varieties of tests. Even the largest hospitals do only 1000 variations of tests,” Velu claims. Neuberg Diagnostics is bringing in newer-generation diagnostics techniques to practice in the area of personalized medicine. It aims to provide affordable and accurate diagnosis to all strata of people he adds.
Neuberg has made successful joint ventures with Anand Diagnostic Laboratory (Bangalore), Supratech Micropath (Ahmedabad), Ehrlich Laboratory (Chennai), Pulse Diagnostic (Kolkata), Global Labs (South Africa), and Minerva Diagnostics (Dubai) bringing their combined process over 30 million tests annually.
Neuberg Supratech is one of the most trusted names in Pathology Diagnostics in Ahmedabad serving more than 5000 patients a day. It has set up a state-of-the-art Genomic lab called Neuberg Center for Genomic Medicine (NCGM). It offers comprehensive, accurate, and affordable genetic testing to all. “Our centre is considered one of the best genomic lab in the country,” says Dr. Sandip Shah, director Neuberg and the founder of Supratech Lab NCGM is also the first private laboratory in India to have acquired the NovaSeq6000.
NCGM carries out a whole range of genomics testing for personalized medicine covering oncology, reproductive medicine, inherited genetics, pharmacogenomics, nutri genomics and several other segments. The centre processes more than 20,000 genomics samples per month in the three NCGM facilities located in Ahmedabad, Chennai and Raleigh (North Carolina USA). NCGM has several types of large and small-size next-generation sequencers, microarray instruments, genetic scanners, Sanger sequencers, etc. Technology and equipment are costly and change very fast so we need to constantly upgrade with time, says a doctor in the center.
“Joining with Neuberg has helped us to expand our presence. The revenue of the lab has grown over six times since then,” says Dr. Shah. Today it has a presence in over 100 centers in Gujarat, Rajasthan, and Madhya Pradesh.
“Our plan is to create a center of excellence in multiple locations Velu says “Like in Bangalore we have expertise in digital pathology, mass spectrometry, and high PLCC. Ahmedabad has become a place for genomic medicine and now in Chennai, we have a center for transplant immunology, as Chennai is the transplant capital of the country. So our point of direction is to become an advanced diagnostic chain.”
The company is always in search of good acquisitions. Last year, Neuberg announced a joint venture with Pulse Diagnostics in Kolkata, to expand integrated diagnostics centers combining advanced pathology and advanced radiology modalities across Eastern & North Eastern States. Neuberg at present owns 51 per cent in the JV.
This Joint Venture will integrate the ten labs of Neuberg located across East India with the nine integrated diagnostic centers of Pulse Diagnostics in Kolkata. This will result in close to 20 integrated diagnostic centers, 20 labs, and over 200 collection centers covering the entire Eastern India within this financial year.
“Pulse Diagnostics is a name in the diagnostics industry in Kolkata, Neuberg to extend the integrated state of the art high end diagnostics services combining Pathology & Radiology to the people of Eastern & North Eastern states of India. “We will invest Rs.500 crore for the expansion in the next three years. Our target is to achieve Rs. 100 crores plus annual revenues in this financial year,” says Velu.
“This collaboration will help us to expand our bandwidth in pathology by upgrading our central lab in Kolkata to become a reference lab for East. It will introduce all subspecialties of Lab medicine, like histopathology with immunohistochemistry, genomics, metabolomics, new-born screening etc. with advanced initiatives like data analytics / AI-based diagnostics and total lab automation solutions says,” Sunaina Bihani, CEO and Managing Director, Pulse Diagnostics.
“The acquisition/JV of a reputed diagnostic center helps us to get readymade markets and customers, ” says Ganesan, “Our role is to set the right strategy, finance, sales & marketing including branding and if necessary we also provide technical inputs for business growth.” Neuberg always secured the majority stake in any JV.
The segment faces challenges from the fragmented market. There are stand-alone centers, large chains, and hospital laboratories. The segment is not well regulated. There are over one lakh centers across the country. However, only the accredited labs do the complex tests. Also, there are large numbers of online players entered into the preventive segment which is almost 30 percent of the total market. The management of Neuberg thinks these online operators have two options: either consolidate or perish.
Interestingly there has been a paradigm shift in medical treatment for the last 4 decades. It has moved from opinion-based medicine to evidence-based medicine. And now for the last 5 years, the world is moving towards personalised medicine. This needs to have a deeper look at cellular level. Genomic medicine helps to diagnose critical diseases like cancer, alzheimer. “This is the future of diagnostic centres and will play a crucial role. It is important to invest in high-end equipment for accurate diagnosis to stay relevant in the cut throat price war. We are doing full composite right from routine to advance level of tests, describes Velu
Today, in addition to Neuberg Diagnostics, Velu leads a consortium of business ventures like Trivitron Healthcare, Maxivision Super Speciality Eye Hospitals, Apollo White Dental, and Apollo Dialysis clinics. He is a Mentor, Director, and shareholder at Kauvery Group of Hospitals and is an anchor investor & occupies key posts in Stakeboat Capital and GSK Ventures Private Equity Funds. GSK Velu group today has total revenue of Rs.4000 crore having a total of 20,000 healthcare professionals. While Neuberg has over 2000 people.
Velu has been conferred with various awards and accolades which are a testimony to his hard work, dedication, and his vision of making access to affordable quality healthcare a reality. He is also an Honorary Consul to the Republic of Estonia in India. He also holds several key positions in trade associations like CII, AIMED etc.
Velu is a workaholic and a great motivator for the entire Neuberg team. But he prefers to spend free time with his family. His wife Subha is a homemaker and says, “Velu’s ability to read the industry with passion and sincerity that defines his success. He is also a role model for our daughters.” Both Velu and his wife love music and good singers. They have two daughters Kavya and Manya. Kavya completed her graduation from New York and is currently working in NCGM USA and Trivitron for the past three years. Kavya will be joining as VP, of Corporate Affairs of Neuberg in India in January. Manya is pursuing pre-med graduation at Pennsylvania, US.
Velu has a piece of advice for young entrepreneurs, “One should work hard with passion and always dream big. Small is beautiful but big is necessary.” He built Neuberg with a solid foundation. Now he has set a target to achieve a revenue of Rs.5000 crore in the next 5 years.
