THYROCARE - Thyrocare Technologies Limited Share Price

Management's outlook for Thyrocare Technologies Limited remains positive, focusing on sustained growth and shareholder value. Key highlights include the announcement of a 2:1 bonus share issuance and an interim dividend of INR 7 per share, highlighting the company's commitment to rewarding shareholders amidst consistent operational performance.

Management reported achieving a non-COVID growth CAGR of 19% over the past four years, showcasing the company's robust growth strategy. Active quarterly franchisees surged to over 10,100, up from 8,446 year-on-year, indicating strong franchisee expansion driven by increased brand equity and operational efficiency.

Quality remains a primary focus, with Thyrocare now being the first and only 100% NABL-accredited national laboratory chain in India, aiming for Six Sigma quality with a target to reduce complaints to below 3.4 per million tests.

In Q2 FY '26, Thyrocare processed 53.3 million tests, reflecting a 21% year-on-year increase, while annual revenue reached INR 217 crores, marking a robust 22% year-on-year growth, primarily fueled by a 24% increase in pathology business revenue. The franchisee segment also reported a 20% revenue growth.

Notably, partnerships business grew by 35%, and the company projects substantial growth prospects in the GLP-1 weight loss drug diagnostics segment. Furthermore, Thryocare emphasized its aggressive expansion into Tier 3 cities and beyond, as well as logistics investments to improve service reach and turnaround times, which currently average 3.52 hours.

Management expects continued mid-teen growth rates in the future, notwithstanding potential seasonal fluctuations and challenges tied to external market conditions. The overall strategy centers on operational excellence, customer satisfaction, and leveraging technology to enhance diagnostics accessibility.

Here are the major questions and their respective detailed answers from the Q&A section of the earnings transcript:

1. Question from Siddhant K: "Can you clarify the business model regarding franchisees, particularly about whether phlebotomists are under our payroll or the franchisee's? Also, what's the revenue split between Thyrocare branded and non-branded centers?"

   Answer: "Our franchisees can be hospitals, nursing homes, or collection centers. Roughly 1,000 out of 10,000 are Thyrocare branded, contributing about 40% of our revenue. We have a dedicated phlebotomy fleet, with 1,900 phlebotomists who service our partnership business, differentiating our model from typical franchisee operations."

2. Question from Bhavya Nahar: "Given the growth in our franchise network, are we concerned about a potential reversal in revenue growth without throughput growth?"

   Answer: "Not at all. Growth primarily comes from our large partners, and we've successfully added many diamond and silver partners, which has fueled overall revenue growth while ensuring a balanced network expansion."

3. Question from Krishna Raj K: "Why is our revenue per test and per patient comparatively low? Is there scope for improvement?"

   Answer: "The increase in revenue per patient stems from more tests per patient, due to bundled packages like Jaanch. Our mission is to ensure affordability, so we avoid raising prices but enhance value through comprehensive testing and efficient offerings."

4. Question from Harsh Kataria: "What's the revenue mix between online and offline channels like the Thyrocare app and PharmEasy?"

   Answer: "The offline franchisee business accounts for about 20% growth, while partnerships, largely online, have seen a 36% growth. Thus, we have a well-balanced presence in both areas, maximizing potential across different market segments."

5. Question from Raman K. V.: "How significant is our B2G business, and will the recent CGHS rate hike impact us?"

   Answer: "B2G contributes about 1% to our revenue, approximately INR2 crores this past quarter. The CGHS rate hikes may have some positive effects, but they're not a significant factor for our overall operations."

6. Question from Siddhant K: "What delineates the partnership model from the franchise model?"

   Answer: "A franchise typically carries out the sample collection, while a partnership relies on Thyrocare for collection and reporting. Partnerships often include HealthTech, corporates, and insurance players, contrasting with franchisee operations that may include both branded and non-branded centers."

7. Question from Abdulkader Puranwala: "What's the organic growth excluding recent acquisitions and how do they impact margins?"

   Answer: "Organic growth was 22%, with 2% from recent acquisitions. We strategically expand labs to match demand to prevent operational dilution, ensuring that new centers do not negatively impact our margins."

8. Question from Yogesh Soni: "Can you elaborate on your logistics investments and workforce expansions?"

   Answer: "We have about 100 field and call center staff, consistently adding 100 to 150 franchisees monthly. We've heavily invested in logistics, optimizing sample transport with cold chains and data loggers to improve service quality and operational efficiency."

These responses summarize key insights from the management at Thyrocare Technologies regarding their business performance, strategy, and operational details.