Even as Coronavirus struck Indian shores in early 2020, Adar Poonawalla, along with Abhijit Pawar, announced an investment in a fellow Pune-based firm Mylab Discovery Solutions. The need to build indigenous solutions for diagnostics and testing was cited as the key opportunity as conventional diagnostics companies were overburdened with testing requirements throughout the country.
At the time seen as an upcoming biotech and diagnostics startup, Mylab found an opportunity of a lifetime in the time of crisis and developed low cost viral testing technology for institutional and at home use. It was also one of the earliest abs to get formal approval for its RTPCR kits, giving it a headstart in the race to test Indians.
This innovation helped to propel its revenues over 100X during the fiscal marred by Covid-19 through a bouquet of diagnostics and biotechnology services including detection of infectious disease, veterinary screenings, genomics, cancer screenings and agricultural screenings tests.
As per its annual statements filed with the RoC, MyLab’s revenue from operations grew 100.7X to Rs 825.42 crore during FY21 from only Rs 8.2 crore earned in FY20. Further, the company also received Rs 14.6 crore from the governments in the form of grants and subsidies which were booked under non operating income during the fiscal ended in March 2021.
Moving over to the expense sheet, procurement of inputs is the largest cost centre for the company accounting for 69% of its total annual expenditure. These expenses surged in line with demand, blowing up 292X to Rs 414.4 crore in FY21 from only Rs 1.42 crore spent on procurement during FY20.
The company also increased its team size to keep up with the staggering expansion in scale and as a result, employee benefit payments grew by 345% to Rs 16.7 crore during FY21 from Rs 2.4 crore paid out in FY20. Importantly, around 44.3% of these payments i.e Rs 4.74 crore were paid to the directors.
Rent and utility expenses amounted to Rs 2.4 crore while other admin and operating costs totaled to Rs 147.5 crore during FY21.
Another Rs 25.4 crore were paid as royalty pushing the total annual costs to Rs 600.34 crore in FY21, 75X more as compared to Rs 8 crore spent in total during FY20. Mylab spent Rs 0.73 crore to earn a single rupee of revenue in FY21. Along the way, in September 2021, it also acquired Sanscritech, the developer of Swayam, said to be India’s most advanced point of care (POC) testing system and telemedicine facility in an all-cash deal.
While volumes blew up due to emergency demand caused by covid, Mylab’s EBITDA margin actually dropped from 31.46% in FY20 to 29.12% during FY21, perhaps due to dependence on government procurement. Irrespective, the massive growth in topline means that Mylabs annual profits shot up over 16X to Rs 177.14 crore during FY21 from Rs 10.9 crore earned during FY20.