Thyrocare : Debt free Asset Light Healthcare Play

[amitayu]

A ) Company Overview:
•Thyrocare is one of the leading pan-India diagnostic chains and conduct an array of medical diagnostic tests and profiles of tests that center on early detection and management of disorders and diseases.
•As of 29th February 2016, Thyrocare offers 198 tests and 59 profiles of tests to detect a number of disorders, including Thyroid disorders, Growth disorders, Metabolism disorders, Auto-Immunity, Diabetes, Anemia, Cardiovascular disorders, Infertility and various infectious diseases.
•The profiles of tests include 16 profiles of tests administered under the “Aarogyam” brand, which offers patients a suite of wellness and preventive health care tests.
•The company primarily operates their testing services through a fully automated CPL (Central Processing Laboratory) which is located in Navi Mumbai and through the network of Regional Processing Laboratories (RPLs) located at New Delhi, Coimbatore, Hyderabad, Kolkata and Bhopal.
•Thyrocare has nationwide network of 1,041 authorized service providers comprised of 687 TAGs (Thyrocare Aggregators) and 354 TSPs (Thyrocare Service Provider) spread across 466 cities and 24 states and 1 union territory as of 29th February 2016.
•Nueclear Healthcare Limited (NHL, Thyrocare’s wholly owned subsidiary) operates a network of molecular imaging centers in New Delhi, Navi Mumbai and Hyderabad, focused on early and effective cancer monitoring.

B)Scalability Scope of Industry and Company:
The domestic diagnostic market is highly fragmented and has a current size of ~US$6.2bn. The industry is expected to grow at 16‐18% CAGR to ~US$9.3-$9.8bn by FY2018 as per CRISIL estimates.Diagnostic centres in India can be classified as hospital‐based, diagnostic chains and standalone centres. Standalone centres form the majority share (48%) followed by hospital based (37%) centres, while diagnostic chains account for the balance (15%). The absence of stringent regulations and low entry barriers has led to the evolution of standalone centres, while hospitals tend to have their own pathology labs. Within diagnostic chains, large pan‐India chains form 35‐40% and regional chains form 60‐65%.

Specialized tests require expensive infrastructure, which has led to the formation of diagnostic chains in India. These follow the hub and spoke model and enable economies of scale. However, the fragmented nature of the industry indicates lowpricing power for service providers in the near term.The key drivers for the industry are- increase in evidence-based treatments, huge demand-supply gap, increase in health insurance coverage, need for greater health coverage as population and life expectancy increase, rising income levels making quality healthcare services affordable, and growing demand for lifestyle diseases-related healthcare services.

Does Company Hold a Scalable model ?

TTL has a portfolio of specialized tests with an emphasis on wellness and preventive healthcare. Wellness and preventive healthcare industry is expected to grow at a CAGR of close to 25% over the next three years. Currently, organized pan india diagnostics chain have 35-40% market share which presents a huge opportunity to grow in future TTL’s multi-lab model is comprised of a fully automated CPL supported by its network of RPLs that conduct routine tests conducive to high volume testing. Where logistically feasible, the authorized service providers direct samples requiring such tests to the RPLs. By routing these tests to the RPLs, the resources of the CPL can be utilized to process and test the additional samples generated by its pan-India network of authorized service providers that are not proximate to an RPL.

What is the Expansion Plan?

TTL intends to expand its diagnostics test offerings through the acquisition of new technologies, including both instruments and processes. It is planning to strengthen and grow its coverage of regions across India through the network of RPLs and authorized service providers. The company is targeting network of 25 RPLs from current 5. The expansion could increase its customer base, generate higher volumes of samples for processing, improving turnaround time and optimize company’s logistics costs.
TTL is also developing a network of molecular imaging centers (radiology) for cancer diagnosis through NHL. It currently has three imaging centers operating five PET-CT scanners. TTL is aiming 40 PET-CT scanners in addition to 5 cyclotrons from current 1.

C)Business Model: (Asset Light, Debt Free, High Cash Flow , ROCE Best in Class)
Thyrocare’s multi-lab model is comprised of a fully automated Central Lab (Navi Mumbai )supported by a network of Regional Labs that conduct routine tests (high volume). The authorized service providers direct samples requiring such tests to the RPLs. By routing these tests to Regional Labs, the resources of CPL can be utilized to process and test the additional samples generated by pan-India network of authorized service providers that are not close to any Regional Labs. As number of tests grow, Thyrocare will achieve economies of scale and witness a lower cost per samples and tests. It could pass on these cost efficiencies to customers thereby offering tests at affordable rates. Offering tests at competitive prices is conducive to the expansion of customer base, which may in turn increase the number of samples and tests it processes.

Business Operation Overview : TTL has built a nation-wide network of ASPs that source samples for processing and testing by the RPLs and CPL. As of November 30, 2015, it has a network of 1,122 ASPs(Authorized Service Provider), comprised of 878 Thyrocare Aggregators (TAGs) and 244 Thyrocare Service Providers (TSPs) spread across 483 cities and 27 states and 1 union territory. ASPs have helped the company to penetrate the Indian market and increase the volume of samples it processes, as they collect samples from hospitals, clinics and potential patients located across India. In order to optimize the logistics costs, TTL established RPLs in regions with close proximity to rail or roads network. If the location of an ASP is such that it is not feasible to send the samples to an RPL, or the sample requires non-routine tests, the ASPs send these tests to the CPL via air cargo, rail or road networks and/ or courier services. RPLs have thereby assisted TTL in optimising logistics costs. Additionally, the time involved in delivering the samples to the RPLs is less than that required to deliver samples to the CPL, thereby enabling TTL to provide test results to patients relatively faster. TTL’s information technology infrastructure supports the ASPs’ network. The operations of the ASPs, RPLs and CPL are seamlessly facilitated on the virtual network through TTL’s internal software “Charbi” and “Thyrosoft”, which were developed by third party software developers. ASPs enter work order data on Charbi, which is accessed by the CPL through Charbi or by the relevant RPL through Thyrosoft for local processing. Once received, the test results are uploaded onto Charbi, which can be accessed by ASPs. Test results are also made available to ASPs on TTL’s website.

Why the operation Require Minimum Capex and Working Capital ?
It’s a B2B model as Thyrocare services laboratory partners rather than consumers directly. This differentiated Model enables Higher Margins: Unlike other organized Player , which operate more on a B2C Model. From B2B segment for Thyrocare 85% of its revenue coming through the channel( as against 30-40% for its peers).This enable the company to keep its other expenditure lower vis a vis it’s peers , which spend higher on promotional expense. In term of services , the company is more focused on the preventive and wellness which is 6% of the Industry but less competitive , and the non preventive segments, while its peers follow a portfolio model of providing a full range of tests and services , which reasons higher manpower costs.
The company’s volumes and strong ties with its vendors has enabled it to develop an equipment leasing model for the CPL that has resulted in minimal capex for its otherwise expensive diagnostic equipments. The model entails leasing of equipments and instruments for the CPL in exchange for a commitment to purchase reagents and consumables from these vendors for a specified period of time. The RPLs conduct routine tests which do not require complex equipments; Hence, the capex required for equipments is minimal and the same are purchased outright by the company. Additionally, the premises required to set up these RPLs are leased, thus resulting in lower capital outlay to set up these RPLs (2-3cr required for set up a RPL). As a result, the company has been able to expand its operations without relying on debt. The company as of 9MFY2016 has no debt on its books.Low capex requirements and high asset turnover along with high margins enable the company to generate high ROIC on the core diagnostic business, which is around ~40%. This will enable the company to fund its growth with ease and warrant it to make a high dividend payout. In fact it has cash and bank and investments of 91cr as of FY2015 on a consolidated basis. The net cash flow from operating activities is around `40-45cr/year and will be used to fund the next phase of growth.

Why margins are Higher than the Peers?

Operations are Automated : The company’s operations are relatively more automated in nature, thereby requiring less manpower Intervention, unlike its peers which need to employ qualified manpower like Phds and doctors. As a result, employee costs for Thyrocare account for 10% of sales V/s 20% of sales for its peers. This contributes towards the company enjoying better margins compared to the industry (~41% for Thyrocare’s diagnostic business V/s ~26% for Dr Lal Pathlabs). This coupled with the low capex requirement for the diagnostic segment makes its diagnostic business a high ROIC business. This it has minimal requirement for day-to-day working capital which supports its ROCE. It also has one of the highest EBITDA margins in the industry.

Thyrocare Brands:

Operational BreakUP

Business Strategy and Growth Driver:
•Intends to grow its Wellness and Preventive offering from 51% in FY15 to ~80% over FY2020. The management expects the business to have high growth prospects and low competition segment coming to preventive care, Aarogyam has grown 30% CAGR over the last five years. So, MANAGEMNT believe this will be the engine of their future growth and will clock 30% growth for next few years. In time, this segment accounting for 75% of our revenues.

• The management intends to grow its network of RPLs (augmenting 10 RPLs in FY17E & FY18E) and authorized service providers. Thyrocare intends to add 75 RPLs going forward, with INR 30mn investment/ RPL with a total investment of INR 750mn.
  •The management anticipates robust growth in the Nueclear business vertical, which became EBITDA positive in 9MFY16E and should become PAT positive by the end of FY17E.
  •Company is in very high growth Industry and there is a remarkable change that is moving from unorganized sector to organized sector
  •The preventive healthcare - the kind of health consciousness coming in companies now requiring every employee joining them going through all these tests. This is all opening up a huge market for these companies.

D)Financial Performance

Company has demonstrated attractive financial performance over last four years. For FY2011-15, its compounded annual growth rate (CAGR) for sales is 23%, where the sales grew from INR 78 crore to INR 180 crore in FY2015. The company’s operating profit grew at CAGR of 20%, from INR 35.6 crore to INR 73.0 crore in FY2015. Its profit CAGR has been 18% from INR 25.0 crore to INR 48.5 crore in FY2015. The company has no debt on books. In fact it has cash and bank and investments of Rs91 crore as of FY2015 on consolidated basis. The net cash flow from operating activities is around INR 40-45 crore per year and will be used to fund the next phase of growth.

Management Overview

Dr. A. Velumani is the Chairman, CEO and Managing Director of the company. He has over 19 years of experience in the diagnostics business. Born in Coimbatore, Tamil Nadu, Velumani spent 15 years as a scientist, and left his job at the Bhabha Atomic Research Centre in Mumbai because he “wanted to do something different”. The immediate reason for starting Thyrocare was fairly straightforward: He had a PhD in thyroid biochemistry. Using money from his provident fund, Velumani started his first lab in Byculla, Mumbai, in 1996. He soon began expanding to other cities. “The growth was pulled [by demand], not pushed,” he says. Since the business started generating cash from the first day, Velumani claims he did not have to borrow money ever. He continues to own a majority stake in the company.

Business Risk and Concerns

•Highly fragmented market with intense local competition (standalone centers are 48%, Hospital Based Diagnostics 37% and Diagonastic Chains 15% of the industry).
Thyrocare directly competes with some major diagnostic players like SRL Diagnostics, Metropolis and Dr Lal Pathlabs. In addition, there are many small and independent clinical labs aswell as labs owned by hospitals and physicians
•The industry faces risk with changing technology and new product introductions.
Advances in technology may lead to the development of more cost-effective tests that can be performed outside of a diagnostic laboratory, such as point-of-care tests that can be performed
by physicians in their offices, complex tests that can be performed by hospitals in their own laboratories and home testing that can be carried out without requiring the services of diagnostic laboratories. The development of such technology and its use by customers would reduce the demand for laboratory testing services and negatively affect revenues.
•High investments in the imaging business with high gestation periods would keep the profitability in check.
Thyocare’s consolidated ROIC will come under pressure in the near term as it has entered the molecular imaging space by acquiring Nuclear Healthcare Ltd (NHL).According to the company, this business will take 3-4 years to attain peak profitability while it accounts for almost 40% of its fixed assets of the company (as on 9MFY2016). Thus, though Thyrocare could potentially provide listing gains, the pressure on its ROIC in the near term and the not-so cheap valuation demanded by it will keep the upside in the stock limited.

Disclaimer : Not invested as Valuation is out of comfort Zone . Studied the company to get an idea on healthcare and Diagnosis Sector. Some Notes are taken from various brokerage Reports , newspaper articles and management interview…

[sumi00]

The management does look honest and hard working but I don’t understand what is the need to be too promotional type. Coming on CNBC too often, display ads etc is unnecessary imo. He almost conceded that they won’t have more than 30% growth in FY17 while the stock trades at 55x trailing. This is one business foreign players can make a big dash as entry barriers are almost none. However, this is a big market poised for multi year growth. Could be looked at corrections and I think 35x fwd is good to start getting interested.

Disc: No holding but watching

[umang_1991]

A multiple of 55X is indeed very expensive. But the business is solid, management is good and growth is here to stay.

I still remember Inox and PVR used to trade at more than 50X when they were listed and subsequently they were very good compounders in the hindsight. Dr Lal and Thyrocare seems to similar twins.

i would be a buyer on correction, currently no position.

[suru27]

Market opportunity is huge , diagnostic market is 37000 crore rs expected to be 75000 crore in 5 years. Yet 50 percent existing market is unorganized .however , concerns are :

1. High valuation
2. Lack of entry barrier
3. Reputational issues due to ecosystem competition : have heard two sided views from doctors located in mumbai

However , this looks like a low capex franchisee model if executed with reputation and brand intact , cab grow with 20 percent plus easily for 5-6 years. In USA market where similar businesses are listed since 1996 command a PE of 15-16

One more point, though I am still researching , lal path labs looks relatively better , however, would take some time to substantiate .

Disc : Hold both thyrocare and lal path labs since ipo days

[kkvinvestor]

In the recent concall, Dr Velumani clarifies that the company is looking for inorgranic growth only if it adds value to the existing business.

[Value_Seeker]

When I started to review Thyrocare, informal perception of some doctors (my GP, my dentist, a neighbour who is a MD) was that Thyrocare is OK for standard tests but “unreliable” for critical tests.

I wanted to understand this situation better, therefore dug deeper.

Thyrocare started in Mumbai as a single location lab.

Initially their reputation was sketchy and they were rumored to be diluting reagent.

They have pioneered the franchisee model, and got a willing partner in Siemens who were willing to install their own testing machines, and supply reagent at a huge discount (75% discount!) allowing Thyrocare to cut costs and grow aggressively. Heavy commission payouts are the norm.

They have lax norms for franchisee qualification - a 50,000 INR capital investment is required to become a franchisee.

Globally 50% to 60% of all Lab. Errors recorded are in the pre-analytical stage.

In India, 60% of all errors occur in the pre-analytical stage, 10% during analysis, rest during post analytical stage.

Pre-analytical stage involves collection of sample with correct procedure, from the right person, in the right state and way, and using accurate storage and handling of transfer of sample to the lab from the collection centre.

The higher the number of remote franchisees and remote handling, the higher the possibility and potential for pre-analytical errors. Any laboratory with scale orientated franchisee heavy business model faces higher risk for such errors.

While CAP Accreditation, NABL, ISO 15189 requirements are noted and due processes must be followed, all laboratories apparently do cut corners on tests - especially where they envision a time or cost impact – values recorded are adjusted in line with “informal calibration”. Normally, this is a safe and reliable indexation, based on extensive calibration.
This critical input here-above I received strictly informally and personally from a very eminent Indian pathologist associated with one of the leading Pathology Laboratories in India. We are family friends.

Such indexation practise while judicious in certain cases can set dangerous precedents when extended without due care. If received sample is itself not in ideal state, such informal indexation further compounds the potential for bigger errors.

By the way Lal Path Labs also seems to be going to same way – they are pretty aggressive at creating franchisees and cutting costs. As explained loose norms for franchisees + cost cutting = need for shortcuts that have the potential to impact readings.

The reality is this: the focus on growing topline aggressively, while keeping robust bottom line will necessitate adding franchisees aggressively, as well as nurturing “short cut steps” to cut costs.

Feedback I have received is that SRL Labs are the most stringent from the lot - about demanding good condition receipt of samples. (However, this is a 2 source input and by no means can be considered a factual representation).

Other inputs on Thyrocare:

I have talked to a few ex-employees of Thyrocare.

Update received was uniformly bad.

The organisation is rumoured to be very political, and work environment is stated to be extremely stressed and poor. On average, employees do not last over 1.5 to 2 years.

The risk with fostering such an organisation culture is that they are releasing “bad publicity” ambassadors who have unpleasant association memories and lack of regard for the organisation. Perhaps this could be one of the factors behind the shaky perception of Thyrocare in some minds, because apparently their practises are not too far different from other competitors - though there appears to be some better due diligence on inward samples - by some non listed players.

If one has seen the promoter on TV, he has himself said that he bullied the board to fall in line with his aggressive growth targets, and even joked that the board viewed him as a “dictator”.

While there is scope for scalability and these listed companies can continue to grow top line and bottom line for many years, the data is not comforting. Essentially these companies do not qualify my checklist due to their practises and potential for data integrity issues. Hence I am abstaining from any investment in any listed path lab.

Best regards,

Aniket.

Disc:
Am not a registered analyst.
This is not a sell / avoid recommendation for Thyrocare / Dr. Lal Path Labs.
These are all inputs received from a small set of credible people. there were sufficient red flags there for me personally to not pursue this further.
It is important to recognise that a deeper dive / wider data set is desirable to revalidate the inputs received by me. Please accept this input as good intentioned feedback to fellow investors.
the Input is not malafide and not aimed at discrediting any of these companies.

[nityanandparab]

First of all, very good Introductory post by @amitayu. Nice work done. I am also tracking Thyrocare technologies. Not invested though.

Please find scuttlebutt from my side. This was done by me 6 months ago.

My father and mother used to take tests on regular basis for sugar and other treatments. One of my fathers friend had taken the franchise of Thyrocare. Able to gather the some insights from the same.
The franchise has to just get the clients.The collector for samples was common in the city which was some eligible person. He used to collect the blood sample and give it to franchise. the the whole lot for that day will be sent to Mumbai HO, where it will get analyzed as per the necessary tests.
So @Value_Seeker I dont think that Preanalytical errors will happen in this case. Cannot confirm now if this model has changed by the company.

Now the Friend of my father has cancelled the franchise in last two months(After the IPO) as there was dumping of material, reduction of commission and pressure to build a client base.

[nityanandparab]

Also, I done the price comparison for one of the tests. Lipid Profile which is generally available at Rs.650/- in all major and tier II cities was available at Rs.350/- with Thyrocare and they were giving 20% commission to the franchise on the same 6 months ago.

[Value_Seeker]

Dear Nityanand,

The feedback related to pre-analytical errors as well as lab test shortcuts comes from one of India’s most eminent pathologists.

In fact global papers (I am enclosing some links I studied from my notes file) - Japanese, American and Indian figures show that pre-analytical errors are contributing to 70 to 80 percent of total errors. Not being a pathologist or part of the industry, I have no insights as to which of the preanalytical factors contribute more.

http://www.jcdr.net/articles/PDF/1364/1582.pdf

http://www.ijbls.org/upfile/Issues/2013510104210.pdf

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3477456/

In principle, what is clear from the above is that globally most of the errors happen in the pre-analytical stage and India is no exception. I think the logic for probable increase in error due to franchisee handling / transportation as against visiting the main lab for blood sampling is also clear.

The explanation from the eminent pathologist was detailed. As explained briefly hereabove, he spoke about the norms that need to be followed to ensure ideal sample and test conditions and what is done which can be widely in variance of the ISO or accredited norms, and compensated for by “informal calibration” - which is considered as “acceptable practise”. He also informed me that in order for a laboratory to have optimal accuracy, monitoring of all steps including receipt of sample at right temperature and in right condition are a must.

Like you I am an outsider to the industry and we will all make our own conclusions based on the data that we are independently able to gather. As stated, I have not reviewed this in greater detail, what I heard and read was sufficiently discomforting for me to abstain.

Data on commissions having come down does not surprise me, neither does the fact that pricing of Thyrocare tests is far lower. Promoter is a cost warrior and he has stated repeatedly on TV that if necessary he will drop cost without compromising margins, should there be a promise of required growth.

Once again, as stated, more insights are required and I merely shared the basic inputs I received for due consideration / refinement / improvement.

Best regards,

Aniket.

[nitin_verma]

A very well tailored discussion I must say. I would like to pen my views ( with regards to the business in subjective sense rather than objective). I have been practising medicine for 10 years now and being in critical care medicine watched the pathology department very closely.

• the pre analytical errors basically mean before the sample is processed. And it’s true that is the main culprit in over 70% cases ( there are pub med articles on it ). An example is something like a vitamin D blood sample needs to be send covered in foil. If not then it degrades and actual level will be noted to be spuriously low. Certain samples need to be sent frozen in ice so and and so forth. SRL is known to have higher accuracy than lal or thyrocare.
  -The processing error is normally low as it requires standardisation of the analyser once in a while as recommended by the manufacturer which these labs normally do. However, majority of tests conducted are routine one’s like hemoglobin , esr, electrolytes, liver function and renal function. I would say these four would make more than 50% of tests conducted. Now these are easily done by local labs which charge lower and turnaround time is short. I don’t think doctors wud so easily switch to thyrocare or lal. I personally send most of mine to a local lab which is quite accurate and gives me a report in 2 hours.
• hospitals with their in built labs ( one’s with more than 100 beds) take the other chunk out from the market share. Thyrocare cannot do anything about it as with in-built labs the hospital staff is bound to do it inhouse. Only few special tests like genetics or complex metabolic ones are sourced out which are rarely ordered.
• so my guess is their main market cud be tier 2 or 3 cities which don’t have good local labs or private hospitals large enough to support their own labs. Now this figure itself cud be quite gud enuf to sustain the growth rate envisioned but the competition by lal and SRL wud be tough, still.
• lastly Thyrocare as a brand has been imprinted with thyroid related tests. People (doctors included) still find it hard to send a sample say a metabolic screen coz of it. Once an image is made , it’s difficult to break in health care. An example is escorts which handles everything is still known as a heart hospital.
  Regards.
  Disclosure : don’t known any share of Thyrocare or any other company i quoted.

[harini_dedhia]

It is true that Thyrocare has a bad impression with doctors (atleast in Mumbai) but in terms of aggression in expanding their topline- that is present with all the players. One of the possible reasons for doctors to comment favorably on SRL is that most hospitals/ nursing homes in Mumbai outsource some or all of their pathology work to SRL where the hospital or the nursing home acts simply as a collection point.

Metropolis is also as strong and clean a brand name; however is probably not included in the doctor’s comments as they are mainly a B2C brand. Another brand that seems to be coming up in Mumbai is Suburban Diagnostics- they are tying up with Wellness Forever (a 24 x 7 Pharmacy chain) in certain locations to get footfalls.

[nityanandparab]

@Value_Seeker I read your post again. Earlier I was biased towards the growth of the company and it was in my target list. But I was ignoring the negativity but I have to see the picture form other side as well.

You mentioned “diluting reagents”.Can you throw some light on this?

@harini_dedhia Can you throw some light on why Thyrocare has bad impression with doctors in Mumbai?

[Value_Seeker]

@nityanandparab no I cannot throw any light on the rumor of “diluting reagents”.

This was a comment from a private path lab owner whom i connected with through a family friend and he informed me this off the record. To my mind this historic rumor based on a personal comment - which cannot be verified or proved - was an important potential red flag, and therefore the comment in mentioned in this post.

I repeat part of my disclaimer at the end of the post:

“These are all inputs received from a small set of credible people.
There were sufficient red flags there for me personally to not pursue this further.
It is important to recognise that a deeper dive / wider data set is desirable to revalidate the inputs received by me. Please accept this input as good intentioned feedback to fellow investors.”

[kkvinvestor]

FY17 Q1 Results: https://nseindia.com/corporate/Boarddecision220716_22072016194053.zip

[swapnilyerande]

Cons Net Profit +40.2% At Rs 16.4 Cr Vs Rs 11.7 Cr
EBITDA +34.5% At Rs 27.3 Cr Vs Rs 20.3 Cr (YoY)

[stockcollector]

Dilution of reagent story is just a rumour I would say.

Modern blood analysers which thyrocare uses will reject the blood specimens if the there is any problem with the reagents and moreover thyrocare management has welcomed regulation and monitoring of quality control in the field of laboratory medicine.

I am quite impressed by the promoter who has built this company from scratch and he has skin in the game for sure. He is surely passionate about his company!

According to my analysis thyrocare is a community based laboratory rather than a hospital based laboratory which has advantages and disadvantages. I presume margins are higher in a community based laboratory because the seriousness/acuteness of cases is much less and hence there is no urgency in releasing the result (unless the result is very abnormal after testing) which decreases frictional costs. Hospital laboratory is very labour intensive and hence margins are likely to be lower.

Discl: invested small amounts at higher levels (did not get ipo allocation)

[stockcollector]

Regarding pre-analytical variables/errors - applies to any laboratory. The error will always be there, it only can be minimised by better sample collection and rapid transportation in ambient temperature.

The days of local laboratories close to the hospitals/scattered in various corners of the cities/villages are numbered I would say - first of all there is no quality control at all (as compared to thyrocare which sure has internal and external quality control - I have not verified this though) and hence one cannot trust their numbers (no good doctor who understands laboratory medicine will rely on the result of the local laboratory shop, he is just forced to use that option because many a times there is no other option!).

Regulation (when and if implemented in India) and quality control will also kill the local laboratories because of the huge compliance cost, lack of knowledgeable/good staff and lack of economies of scale.

The move worldwide is towards hub and spoke model for community based laboratories - they have collection points at various places and a central laboratory facility for analysis.

But valuation is very high and I am fearful of overpaying for growth.

[swapnilyerande]

Thyrocare’s revenue grew 21.7 percent to Rs 69.36 crore and operating profit margins improved to 39.4 percent in the first quarter of FY17.

Watch Thyrocare hopeful of growing revenues 25% in FY17 Video on Moneycontrol...

does the thyrocare Q1 result justify its PE multiples

[swapnilyerande]

‘Aarogyam’ to drive growth for Thyrocare: Dr Velumani

[kanvgarg123]

Has anybody tried to understand the reason for differences in growth rate of SRL,Dr lal Path and Thyrocare? From the reviews that I have seen on the internet and from the knowledge I gathered from this forum, SRL is the best of all.
FY16 SRL Rev Growth is just 7% whereas Dr. Lal Path’s and Thyrocare’s growth is way higher than this. I am unable to find the reason behind this.