Thyrocare : Debt free Asset Light Healthcare Play


(CP) #338

Totally agree. If I were to use a IT Cloud like jargon, he’s built what I would call 'Diagnostics As A Service (DaaS) which looks extremely scalable to me. If I recall right, the Thyrocare model already has achieved the lowest cost per test thanks to the asset light hub and spoke model.

However the accuracy of the sample sent to Thyrocare also depends a lot on in what condition it reaches the lab. Other than this important vulnerability, local labs do not stand a chance.

Its best that they outsource the diagnostics/testing backend to Thyrocare themselves, rather than invest in hi-tech equipment.


(rupaniamit) #339

**Q3FY19 Thyrocare Earnings Concall notes. I have tried my best to take the notes accurately but please refer to recording for verification of the numbers.

Pathology

  • Dr. Vellumani mentioned that there is no concrete way to guage the growth of market/industry. Rule of thumb is self growth rate minus 2-3%. Thyrocare has grown revenue at roughly 13% in 9 months and hence industry would have grown at 10ish%.
  • Not easy to assess the size of the market because almost 80% of the market is unorganized. Management has belief that it has overall 3-4% market share. 20% organized market share.
  • Plan is to add more clients (local labs) with the help of added workforce, increase the network, and help more people take benefit of price reduction which should increase the volume.
  • Planning to open new RPL in Chennai in Q4. Would open 3-4 RPL every year based on demand.
  • 50% of the current machines purchased from vendor. With this purchase, vendor to provide more discount on reagent. COGS will go down and Depreciation will go up. Net effect is increase in EBITDA. Purchasing machines made more sense as the company was having cash. Life of machine is 5 years but will be depreciated fully in next about 3.5 years.
  • Were handling B2B clients through appointed franchisee. Retention and stickiness of clients depends on the service that this franchisee provides. Now Thyrocare is reaching out to the B2B clients directly by appointing field agents. So hoping to give better service and with new price cuts (removing franchisee layer) directly to the end client, it should help to gain more volume.
  • Goal is to have 5000 franchisee total by end of 2020 from currently around 3000.
  • Revenue from online aggregators is part of DSA portion and forms around 5-6% of topline. Thyrocare charges them B2B rate. Have taken price cuts in this segment as well as company wants to attract more DSAs.

Nuclear

  • Total capital employed so far is around 100cr.
  • Disappointed growth in imaging business. More supply than demand. Most in market are making loss but still new investments are coming in.
  • One more machine in next quarter. And no investments in FY20. Will understand business and profitability and then take a call on further investments in imaging business.
  • Have total 15 scanners. Goal is to reach 12 scans per machine per day. PAT positive at 12 scans per machine per day and EBITDA positive at 8 scans per machine per day.