Thyrocare Technologies Limited claims to be India’s most advanced totally automated laboratory having its strong presence in more than 2000 cities / towns in India and internationally. The company was started in 1996, by Dr Velumani Arokiaswamy with a staff of 4 people, with focus on low cost Thyroid testing. By 2014, it has become India’s most profitable diagnostic business. The company has a highly differentiated business model. It is more of a B2B company, collecting samples from hundreds of dedicated collection points, and also from allied labs. All processing is done in one highly automated lab near Mumbai.

1. THYROCARE TECHNOLOGIES LIMITED
Company Report: India-Healthcare-Unlisted
1 OCTOBER 2015
www.indiabusinessreports.com
COMPANY BACKGROUND
Beginning
Thyrocare Technologies Limited claims to be India’s
most advanced totally automated laboratory having its
strong presence in more than 2000 cities / towns in
India and internationally.
The company was started in 1996, by Dr Velumani
Arokiaswamy with a staff of 4 people, with focus on
Thyroid testing. Initially, it did not do anything beyond
Radioimmunoassays.
By 2014, it has become India’s most profitable
diagnostic business. The company has a highly
differentiated business model. It is more of a B2B
company, collecting samples from hundreds of
dedicated collection points, and also from allied labs.
All processing is done in one highly automated lab
near Mumbai.
In recent years, the company has tried new models for
growth, setting up labs for new kind of tests within
India, and also venturing abroad. Some of these new
initiatives are B2B as well as B2C, and don’t follow a
centralized model.
Promoters
The company was started in 1996, by Dr Velumani
Arokiaswamy. The management now hold about 60%,
rest is with external investors.
CX Partners holds about 27% in the company while
Norwest Venture Partners owns 10% equity stake.
CX had acquired 30 per cent stake in Thyrocare in
2010 for Rs 188 crore, at a valuation of Rs 626 crore.
In 2013, it sold a three per cent stake to ICICI Bank for
about Rs 40 crore.
Board of Directors
Name Designation
Velumani Arokiaswamy CMD
Amruta Velumani Director
Sumathi Velumani Naidu Director
Ajay Relan Investor Director
Vivek Chhacchi Investor Director
Gopal Shivram Hedge Independent Director
Vishwas Kulkarni Independent Director
Sundararaju Aarogiasamy Naidu Whole Time Director
*
Address
D - 37/1, Ttc Industrial Area
M I D C, Turbhe
Navi Mumbai,
Maharashtra-400703
91-022-27622762
Financial Summary
Year ending Mar 31 FY12 FY13 FY14
Net Sales (Rs mn) 1,091 1,343 1,500
EBITDA (Rs mn) 491 637 692
EBITDA Margin (%) 45% 47% 46%
PAT (Rs mn) 350 566 458
Net worth (Rs mn) 1,032 1,606 2,063
Debt (Rs mn) 306 318 315
Sales Growth (%) 40.4% 23.1% 11.7%
PAT Growth (%) 34.1% 61.7% -19.1%
ROE (%) 40.8% 42.9% 25.0%
ROCE (%) 45.6% 47.8% 32.0%
D/E (x) 0.30 0.20 0.15
Auditor
BSR & Co
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Norwest had bought its 10% stake in 2012 for Rs 120
crore.
BUSINESS HIGHLIGHTS
Thyrocare Technologies has followed a model of a
central laboratory in Navi Mumbai which tests
samples being couriered from its 600 collection
partners—which are smaller laboratories—across the
country. It's a B2B model as Thyrocare services
laboratory partners rather than consumers directly.
Lab Nation will now directly target consumers.
Thyrocare operates with a Centralized Processing
Laboratory (CPL) in Mumbai - India for esoteric tests;
and Regional Processing Laboratory in major metro
cities of India and other parts of Asia. It has strong
focus on technology, brands and systems – to allow
service delivery at an affordable cost.
Thyrocare claims to be the first Indian laboratory to
have an IT enabled, 24x7, fully automated diagnostic
laboratory. Its lab, set up covering over 2,00,000 sq. ft.
floor space, can process over 40,000 specimens and
over 2,00,000 Clinical Chemistry investigations per
night. The speed factor is achieved through a
combination of air-cargo logistics and IT enabled,
barcoded, bi-directional systems that ensures a
turnaround time of 4 to 8 hours for processing of
samples that arrive at any time of the day or night.
Thyrocare has a highly differentiated model, as shown
by:
 Unique concept - Thyrocare operates with a
Centralized Processing Laboratory (CPL) in
Mumbai - India for esoteric tests; and Regional
Processing Laboratory in major metro cities of
India and other parts of Asia.
 Unique focus - Its focuses on clinical chemistry and
preventive care diagnosis.
 Unique air-cargo logistics - which ensure the
samples reach its laboratory every night, same
night, before midnight.
 Unique operations - Its laboratory works 24 x 7 to
cater to the needs of the customers.
 India's First and World's longest - Total Laboratory
Automation (Siemens).
 India's First preanalytical barcoded vial sorter
(MUT) and Sample Sorter (Roche).
Thyrocare is lately trying new models.
Lab Nation
It came up with a key lab network called Lab Nation in
2014. It is also countrywide B2B initiative in the
laboratory diagnostic industry to facilitate individual
laboratories to build their brands. Lab Nation will have
the ability to charge higher for some of the tests as it
will undertake all tests. Over time, Lab Nation will also
foray into diagnostics related to liver, kidney and
infertility.
Thyrocare reportedly intended to invest Rs 500 crore
in this business. The company had targets to open 10
centres in 2014-15; 50 by 2015-16 and 300 by 2016-
17. Each lab will have an investment of Rs 10 crore
and will have 50 people. The technology used at Lab
Nation will be the same as that of Thyrocare. The idea
is to have uniformity even if it comes with a different
brand.
Nueclear Healthcare
Nueclear Healthcare Ltd is the low-cost cancer
diagnosis services business. It is planning to set up 120
molecular imaging centres for the low-cost cancer
diagnosis services. The company raised Rs 22 crore ($4
million) from Norwest Venture Partners.
Vifi
Another brand is Vifi Laboratories, which are focused
on clinical chemistry. Using laboratories in all major
towns, it offers quality services from back end at
affordable costs for laboratories. This is purely B2B.
Thyrocare has also gone out of India. It is now in more
than a dozen countries now and is moving towards
becoming largest preventive care laboratory in
Bahrain which caters to 10 countries and Bangladesh.
Vnationwide networked, IT empowered laboratory,
MANUFACTURING FACILITIES
Thyrocare’s Central Processing Laboratory, situated in
Navi Mumbai, is a state-of-art, fully automated
diagnostic laboratory equipped with the most
advanced instrumentation from leading international
brands. With a minimum but highly qualified
workforce, the laboratory is driven by barcoded and
bi-directionally interfaced system and an intelligent
laboratory information system (LIS).

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The Centralized Processing Laboratory consists of
120,000 sq. ft of track automation system that has a
capacity to process over 50,000 samples in a day.
Thyrocare today boasts of processing 3 billion
investigations in a year and having a capacity to
process 10 billion in a year.
Laboratory functions 24X7. Air cargo functions 24 X 7
and 95% of the business is air cargo driven. Barcoded,
Bi-directionally interfaced and webserver solutions
enhances the speed and allows every laboratory in any
continent to operate its machines as if they are
present in their floor and generate results and reports
within 5 hours of flight touching the runway.
Through air-cargo, more than 25,000 samples from all
parts of India are brought to CPL. This is made possible
by a strong logistics network of Thyrocare whose well-
coordinated efforts ensure that the samples reach the
CPL every night, same night, before mid-night. These
are meticulously collected, collated, checked for
sample integrity, temperature and other aspects of
Pre-analytical Quality Control and then stored
appropriately.
IT helps in seamless integration of all the processes,
work orders are downloaded from the web server,
barcodes are scanned and specimens are arranged
accordingly for processing. More than 25,000 different
samples are processed every night and the reports are
directly uploaded back in the website for our
customer to see.
FINANCIAL PERFORMANCE
Thyrocare was the fourth largest diagnostic lab
business in India in 2014. However, going by EBITDA
margins, it was the most profitable.
The company has grown at a CAGR of 24% over the 3
year period FY11-14. This is the below the industry
leader Dr Lal Pathlabs, but comparable or better than
others.
Due to its strong profitability, and around Rs 220 crore
of external funding raised from PE funds, Thyrocare is
a zero debt company. Besides, as per FY14 Balance
Sheet, the company had Rs 100 crore in current
investments, or effectively cash.
FUNDING AND FUTURE PLANS
In Feb’15, it was reported that Thyrocare was planning
a stock market listing by the end of June that could
raise around $85 million to $100 million. Even in
2014, the company was planning an IPO, but could not
accomplish it due to poor market conditions.
Thyrocare has raised money at aggressive valuations
in the past. In FY12, when Norwest invested, it
appears the valuation was Rs 1200 crore. For the IPO,
valuation being talked about area above Rs 2000
crore.
Dr Velumani has been quoting as saying the IPO will be
mainly to give an exit to investors. However, there
may be a need for fresh funds as well, given the strong
investment plans of the company.

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FINANCIAL DETAILS
P&L
(Rs M) FY11 FY12 FY13 FY14
Net Sales 777.0 1,091.0 1,343.0 1,500.0
RM 240.0 287.0 356.0 426.0
Power&F 8.0 21.0 19.0 26.0
Salary 54.0 69.0 89.0 117.0
Other OPC 27.0 85.0 109.0 38.0
G&A - - - -
Sales&D 76.0 132.0 131.0 198.0
Misc 2.0 2.0 2.0 3.0
Total Exp 401.0 599.0 706.0 808.0
PBDIT 375.0 491.0 637.0 692.0
Other Inc 32.0 55.0 177.0 59.0
Int 1.0 1.0 1.0 2.0
Dep 14.0 21.0 33.0 64.0
PBT 393.0 524.0 779.0 686.0
PAT 261.0 350.0 566.0 458.0
Balance Sheet
(Rs M) FY11 FY12 FY13 FY14
Equity 108 108 109 109
Networth 682 1,032 1,606 2,063
Total Debt 285 306 318 315
Total Liabilities 967 1,338 1,924 2,378
Gross Block 233 286 871 1,058
Less: Accumulated Depreciation 71 89 121 184
Net Block 162 197 750 874
Total Fixed Assets 162 197 750 874
Investments 289 276 825 1,244
Current Assets, Loans & Advances
Inventories 40 51 52 63
Sundry Debtors (Debotrs) 28 24 17 49
Cash and Bank 400 590 175 119
Other Current Assets 11 4 7 3
Loans and Advances 78 218 16 40
Total Current Assets 557 887 267 274
Less : Current Liabilities and Provisions
Current Liabilities 40 13 12 66

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Provisions 3 9 10 3
Total Current Liabilities 43 22 22 69
Net Current Assets 514 865 245 205
Miscellaneous 2.0 - 104.0 55.0
Total Assets 967.0 1,338.0 1,924.0 2,378.0
Ratios
FY11 FY12 FY13 FY14
Growth (%)
Sales 40.4% 23.1% 11.7%
PBDIT 30.9% 29.7% 8.6%
PBT 33.3% 48.7% -11.9%
PAT 34.1% 61.7% -19.1%
Margins (%)
PBDIT 48.3% 45.0% 47.4% 46.1%
PAT 33.6% 32.1% 42.1% 30.5%
Capital Efficiency (%)
ROE 40.8% 42.9% 25.0%
ROCE 45.6% 47.8% 32.0%
Leverage
D/E (x) 0.42 0.30 0.20 0.15
Debt/Ebitda 0.76 0.62 0.50 0.46
Working Capital (days)
Inventory t/o 31.1 23.9 15.5 24.6
Debtors t/o 10.8 8.7 5.6 8.0
Payable t/o 77.6 33.7 12.8 33.4
WC Cycle -35.7 -1.1 8.2 -0.8

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