Company has announced 28 Nov as the record date for issuance of bonus. The shares are likely to be credited in demat account on 02 Dec . Maybe the company after 2-3 years will consider a split in FV. As of 30 Sep there are just 54150 odd share holders having 10.6 percent equity.
4 Likes
Thyrocare Technologies -
Q3 FY 26 results and concall highlights -
Revenues - 196 vs 166 cr, up 18 pc
EBITDA - 57 vs 41 cr, up 38 pc ( margins @ 29 vs 25 pc - massive margin expansion )
PAT - 27 vs 19 cr, up 47 pc ( despite one time exceptional item hit of 6 cr )
Pathology revenues grew by 20 pc, contribution to EBITDA @ 60.5 cr
Radiology revenues de-grew by 7 pc, contribution to EBITDA @ 1.5 cr
Company’s total no of Labs @ 40 ( vs 38 in Q2 ). Zone wise distribution of labs is as follows -
West - 9
East - 6
North - 14
South - 10
International ( @ Tanzania ) - 1
All of company’s labs are NABL certified ( a feat no one else in the Industry has achieved, no body is even close )
Notes from previous concalls -
Company’s Tanzania business is expected to double in FY 26 vs 25. This business should break even in next 1.5-2 yrs time
Company’s franchisee can be a nursing home, standalone hospital, standalone collection center, standalone clinic etc. Out of the 10k franchisees that they have, only 1k use Thyrocare brand. Others collect samples under their own hospital / clinic’s name and send the sample to Thyrocare for testing and get a Thyrocare branded report. Franchisees also provide their own Phlebotomists
Company also has its own dedicated team of aprox 1900 phlebotomists. These ppl service company’s partnerships like bigger hospitals ( corporates ), insurance players, MedTech channels etc ( like PharmEasy )
Most of company’s growth is coming from their bigger franchise partners ( ie top 5k franchisees )
At present B2G is not a large focus area for the company ( At present, 1 pc of company’s sales come from B2G business )
Q2,Q4 are seasonally strong Qtrs. Q1,Q3 are generally softer. Overall H1 vs H2 margins should be similar
Company is investing heavily into their cold chain infrastructure - helps a lot in improving test accuracy, customer satisfaction, franchisee retention, reducing test to result timelines
Notes form Q3 concall -
No of tests performed @ 4.9 vs 4.1 cr, up 21 pc
No of patients tested @ 45 vs 40 lakh, up 14 pc
Active franchisees @ 10.27k vs 9.15k, up 12 pc
Revenue per patient @ 394 vs 371, up 6 pc
Tests per patient @ 11 vs 9.8, up 12 pc
Revenues per test @ 35.9 vs 36.6, down 2 pc
Segmental breakdown of revenues -
Franchise - 112 vs 100 cr, up 12 pc
Partnership - 60 vs 43 cr, up 39 pc
D2C - 10 vs 9 cr, up 12 pc
Have hired Madhuri Dixit as a brand ambassador
Added 200 franchisees in Q3
Have launched allergy tests in Q3. Have also included them in their highest selling Aarogyam packages at no extra cost
Company’s business with Pharmeasy grew by 30 pc YoY. Company’s pre policy medical insurance grew by a massive 70 pc YoY in Q3
Tanzania’s business grew by 140 pc in Q3. Expect the Tanzania business to start breaking even in next 12-18 months
PAT is adversely impacted to the tune of 3 cr due implementation of new labour codes
Company’s team of Phlebotomists now stands @ 2000 personnel
The rapid growth of health tech business + number of new policies issued by health insurance companies - is a huge tailwind for the company ( as they partner with both sets to drive their business )
Company continues to maintain that their long term revenue growth rates should continue to remain in Mid teens
Intend to invest heavily in speciality tests. This should put some pressure on accrual of further operating leverage ( with booming sales growth ) - capping the EBITDA margins. But these speciality tests should help them improve their growth rates
Should end FY 26 with revenues of 4-5 cr in the Tanzania mkt ( a small contribution in overall scheme of things )
Franchise business should continue to grow @ 12-15 pc rates. Partnership business should keep growing @ 18 - 20 pc or so
Should also be entering genomics in near future. There is room for multiple players to exist in the genomics space as it’s in infancy. If a large corporate enters this space and improves awareness, its should be a blessing for the Industry
9M FY 26 capex stood @ 28 cr
As the base of partnership business grows, the growth rates should moderate going forward
My observation - management has a habit of under promising and over delivering
Most of the franchisee additions that the company undertakes happens in Q2 and Q4 ( ie in peak seasons )
Company offers a credit of 60-120 days wrt their partnership business ( also includes their Govt business )
Guiding for similar EBITDA margins going forward ( due higher investments, despite improvements in topline )
Disc: hold a small position, not SEBI registered, biased, not a buy/sell recommendation, posted only for educational purposes
6 Likes
Have been trying to size Thyrocare’s addressable pathology market and keep running into the same problem – the key splits that matter most don’t have clean data.
Starting from CRISIL’s FY24 pathology market at Rs 48,500 Cr, you need to subtract what Thyrocare structurally can’t serve. Hospital captive labs (36-40%, CRISIL) are a clean cut. After that it gets messy.
The doctor commission exclusion – I can’t size this. The thesis that Thyrocare has a structural cost advantage depends on competitors paying 25-40% of MRP to referring doctors, which Thyrocare avoids. If true, the commission-driven portion of the market is effectively inaccessible to Thyrocare (doctors won’t refer to a lab that doesn’t pay them). But how large is this portion? I’ve seen claims of “50-60% of referrals involve commissions” but no hard data. And I can’t find where this cost sits in Dr Lal’s or Metropolis’s P&L. If anyone has worked inside a diagnostic chain or has a source that quantifies this – the rate, the prevalence, and whether it’s on-books or off – it would fundamentally change how you size the addressable market. The exclusion swings Rs 3,000+ Cr depending on assumptions.
Acute vs chronic split – no independent source. Thyrocare management says ~65% of the market is chronic tests (their sweet spot, since centralized processing with next-day TAT doesn’t work for acute). But I can’t find an independent breakdown. HDFC Securities says ~90% of pathology is “illness market” with the rest being wellness, but doesn’t split illness into acute vs chronic. This matters because it determines the ceiling for the franchise model.
Healthtech platform TAM – no clean number. The partnership channel (33% of revenue, growing 35-39%) is primarily driven by healthtech platforms, not insurance/TPA as I initially assumed. But there’s no credible “online diagnostics GMV” figure. RedSeer’s eHealth numbers lump diagnostics with pharmacy and teleconsultation. Best guess is Rs 3,000-5,000 Cr for platform-routed pathology, but that’s a wide range on a LOW confidence estimate.
Has anyone found better data sources for any of these? Particularly interested in the doctor commission question – it’s the single biggest variable in sizing the addressable market and the entire cost moat thesis rests on it.
If Thyrocare’s lab network is 100% NABL certified as mentioned by @ranvir , their results are already the most reliable compared to anyone else.
What needs to be validated if they are also the lowest cost of operations provider in the industry- atleast the original founder Dr. Velumani seems to have claimed so.
If both are true, imho these are pretty serious competitive advantages and I am not sure why a hospital would have a ‘captive lab’ for core diagnostics. Radiology etc. is a different matter.
No position but tracking.
3 Likes
yet another spectacular result - this will continue for a very long time as the runway is very long..
As I have said before Dr V sold too early (but he did make a spectacular return from this divestment)..
Also, they are going to get rid of radiology business which is great news indeed - I have messaged here before, Thyrocare board made a huge mistake in the past when Dr V agreed to buy radiology business from Thyrocare for 194 crores - the board at the time did not act on behalf of the shareholders..I dont think they will be able to sell it for anywhere close to 194 crores. I think they wrote off 40 crores as impairment if my memory is correct - I dont think they will get even 50 crores for radiology business. They may get 30-50 crores - I am being optimistic…
Once they get rid of radiology business, valuation should increase further as it was dragging the group profit down..
Disco - hold a lot
6 Likes