Nicholas to hive off pathlabs unit

MUMBAI: Nicholas Piramal is looking at hiving off its laboratory and diagnostics, or pathlabs, business, run under the Wellspring brand.

"The company has got proposals from private-equity companies. Nicholas Piramal India Ltd (NPIL) wants the pathlabs business to be self sufficient," said a source close to the company. However, Ajay Piramal, NPIL chairman, wrote to DNA Money in an e-mail: "We do not comment on speculation."

The source added: "The pathlabs business will be next on the radar once the R&D unit demerger is over."

Nicholas Piramal has two unit under its pathlabs business: NPIL Diagnostics and Laboratories and a JV company called NPIL Dr Phadke Pathology Laboratory and Infertility Center.

The business has seen the revenues soaring since its inception over five years ago. Nicholas Piramal's revenues through the pathlabs business in the last fiscal were Rs 695 crore, up 54.5% from a year earlier.

Despite good performance, NPIL's profit remained negative in 2007 fiscal, thanks to acquisitions and expansion. The company has acquired about seven laboratories and a health imaging centre by acquiring Jhankaria Imaging. NPIL had also picked up 50% in Doctors Diagnostic & Research Centre (DDRC), the largest diagnostics network in Kerala.

Nicholas, which currently has over 50 pathlabs, targets setting up 100 centres in two years and has set aside Rs 300 crore for this purpose.