Conventional and new-age diagnostics companies recorded an exponential demand for testing kits and diagnostics following back to back waves of the Covid-19 pandemic, especially between 2020 and 2021. Naturally, the scale of companies operating in this space skyrocketed in FY21. But with the pandemic subsiding, these firms are now scrambling to cope with slowing demand.
Adar Poonawalla-backed company Mylab is no exception. Its scale dwindled by 68.4% to Rs 260.71 crore in FY22 from Rs 825.42 crore in FY21, according to the consolidated financial statements filed with the Registrar of Companies.
Founded in 2016, Mylab develops and commercializes diagnostic kits to help labs get reliable, timely, and actionable results. It offers a wide range of solutions, applicable in diverse markets such as clinical diagnostics, pharmaceutical drug discovery, biomedical research, agrigenomics, and animal and food safety.
The sale of diagnostics kits is the sole source of revenue for MyLab.
The company also has other financial income, which decreased 41.1% to Rs 9.09 crore in the preceding fiscal year from Rs 15.43 crore in FY21.
The cost of materials – which is making the diagnostic kits – were the largest cost center and accounted for 50% of the total expenses. As the scale came down, the cost of materials proportionately reduced by 69.8% to Rs 125.06 crore in FY22.
Legal and professional charges were the second major cost followed by the cost of materials for MyLab. These costs surged 101% to Rs 21.21 crore during FY22 while the employee benefits cost also grew 68.3% to Rs 17.55 crore in the said period.
The company incurred another Rs 18.2 crore and Rs 6.37 crore against advertisement and royalty costs, respectively, pushing the overall expenditure to Rs 249.99 crore in FY22.
With a dip of 68.4% in the scale, profits of the company fell 91.1% to Rs 15.84 crore in FY22 from Rs 177.16 crore in FY21. Cash outflow from operations also dropped and registered negative at Rs 109.26 crore in FY22 whereas the figures were positive with Rs 3.86 crore in FY21.
Moving over to the ratios, the ROCE and EBITDA margins of the company contracted to 11.19% and 14.50%, respectively, in FY22. On a unit level, the company spent Rs 0.96 to earn a single unit of operating revenue.
With the Covid threat finally dissipating away, Mylab has been busy launching new initiatives, but none obviously can match up to the opportunity Covid created for the firm. However, with a tight control on costs, the firm should be back on a growth footing in the ongoing fiscal year.