Thyrocare Technologies Ltd – Trusted by Billions

Date Published: February 16, 2021

Company Overview:

Thyrocare Technologies Ltd is India’s first and most advanced Totally Automated Laboratory having its strong presence in more than 2000 cities / towns in India and internationally. Thyrocare is India’s first fully automated diagnostic laboratory with a focus on providing quality at affordable costs to laboratories and hospitals in India and other countries. 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. They focus on strong technologies, strong brands and strong systems that enable all laboratories to give their clients the best of science and technology at an affordable cost. With a belief that ‘Quality’ is the heart of any intelligent management, Thyrocare became one of the first Indian diagnostic laboratories to obtain internationally renowned quality accreditations like ISO 9001-2000 rating as early as 2001, which is now escalated to ISO 9001:2008 and CAP (College of American Pathologists) certification in 2007.

Industry Overview:

The health care industry is tremendously important to people around the world. This industry comprises of different players including hospitals, doctors, nursing homes, diagnostic laboratories, pharmacies, medical device manufacturers, and other components of the health care system.  Health care (or healthcare) is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers. It refers to the work done in providing primary care, secondary care and tertiary care, as well as in public health. The health care industry, or medical industry, is a sector that provides goods and services to treat patients with curative, preventive, rehabilitative or palliative care. The healthcare industry is composed of establishments devoted to prevention, diagnosis, treatment, and rehabilitation of medical conditions. Such treatment may be through providing products or services, and may be provided privately or publicly. The modern health care sector is divided into many sub-sectors, and depends on interdisciplinary teams of trained professionals and paraprofessionals to meet health needs of individuals and populations. The health care industry includes establishments ranging from small-town private practices of physicians who employ only one medical assistant to busy inner-city hospitals that provide thousands of diverse jobs. Healthcare industry is littered with risks and challenges as it is an industry that requires constant innovation under increased regulations. Aging populations and increasingly prevalent chronic diseases are the fundamental drivers creating demand for expansion of lifestyle medical procedures and healthcare industry. There will be huge demand for medical technology products for years to come.

Company Operations:

Company has Networks of authorized, trained and equipped collection centers which serve through a very strong IT and Logistics. With clear focus on speed and accuracy has further made the first Indian laboratory to also have an IT enabled, 24×7, fully automated diagnostic laboratory set up covering over 200,000 sq. ft. floor space that ensures error-free processing of over 60,000 specimens and over 300,000 Clinical Chemistry investigations per night. Also unmatched 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.Meticulously created and monitored systems, well-chosen and trained manpower, wise selection of the best global technologies for specialized testing and an uncompromised approach to instrumentation has ensured that Thyrocare is looked upon as a yardstick for quality by stakeholders in the diagnostic industry. The uniqueness of Thyrocare is its effort to innovate and remain at par of the global standards for best of quality service delivery, at the most cost-effective prices. Many laboratories and hospital brands in India, Middle East and South East Asian countries, use Thyrocare to complete their menu and deliver quality at an affordable cost.Thyrocare has anation-wide presence with over 30,000 source points for sample collection managed by itspan-India network of authorized service providers spread over more than 2,000 townsacross more than 450 cities in 29 states. It has a wholly owned subsidiary NuclearHeal Thyrocare (NHL). NHL is engaged in imaging diagnostic services, viz. PET-CT scans,nuclear scanning, etc. Its scanning centers are in Navi Mumbai, New Delhi and Hyderabad.NHL is planning to set up scanning centers in more places.

Unique Features:

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 – on clinical chemistry and preventive care diagnosis.
  • Unique air-cargo logistics – which ensure the samples reach laboratory every night, same night, before midnight.
  • Unique operations – laboratory works 24 x 7 to cater to the needs of customers.
  • Aptio (Siemens)- World’s largest and longest laboratory track automation- 1st Time in India
  • India’s First preanalytical barcoded vial sorter (MUT) and Sample Sorter (Roche).

Recent News:

Thyrocare Technologies has started its Covid-19 detection tests in Mumbai and will shortly expand the same to other centres across the country. The Navi-Mumbai-based lab, which has been authorized by the Indian Council of Medical Research (ICMR) for conducting rapid test for COVID-19, has also tied up with the digital healthcare platform Practo to facilitate the booking.  The ICMR norms mandates that the patient should have a valid doctor’s prescription and a duly filled test requisition form signed by the physician, and a photo ID card to avail the test.  They will be taking all necessary precautions mentioned in the ICMR guidelines while taking the swabs and the same will be collected in a viral transport medium (VTM) to be transported in a cold chain to the Thyrocare laboratory. The test report will be made available to the patients online within 24-48 hours of the sample collection. 

Our View:

Thyrocare is one of India’s largest diagnostics players specializing in cost-effectivepathological biochemical testing. Its strategy is to marry high volumes with low costs bydrawing best yields from infrastructure. Moreover, rising prevalence of evidence-basedtreatment, shift in favor of unorganized players and expanding product portfolio addgrowth heft. Owing to low capex requirements, strong FCF generation phase will continue,sustaining high valuations in the medium term. Company has best  of the Global brands, best of their instruments, best of the technologies, best of systems and best of IT when available to well – trained and highly focused Pathologists, Biochemists, Scientists and Technologists gives Best of the Quality. IT when used ideally to integrate men, machines and methods, it delivers secured, assured, reliable and reproducible solutions even in Diagnostic industry. Analyzers, web-servers and barcodes when integrated, it gives a system that is empowered, controlled and monitored end to end. With more and more brands using us as their cost-effective backend laboratory. Working on Value makes a lot of sense when the operations are B2C. However when the focus is B2B, volume makes a great sense. Hence, Thyrocare has been working on cost of retail reagents for its services. A fully optimized, highly efficient, seamless automation has ensured men, material and machines delivering highest level of quality services at affordable costs. Laboratory functions 24X7. Air-cargo functions 24 X 7 and 95% of the business is air-cargo driven. Barcoded, Bi-directionally interfaced and web server solutions enhance the speed and allow every laboratory in any continent to operate our machines as if they are present in their floor, generating results and reports within 5 hours of flight touching the runway.  By helping laboratories to outsource numerical pathology tests (clinical chemistry), the quality of services are ensured by a username / password. Since the costs make economic sense for laboratories which lack volumes, this unique B2B focus helps the industry. Logically, focus is more on preventive care than sick care.Thyrocare being apan India player with the clear focus on expanding its network in diagnostic, it is well placed to grab this opportunity.Moreover, strong brand, lower pricing model, expanding the number of diagnostic tests centers and expanding theplatforms also puts Thyrocare in a favourable position. Thyrocare’s well established brand image, huge opportunity size,robust return ratios and cash rich balance sheet supports  long term view.

As per the mean estimates of earnings projections made by brokers at Bloomberg, the estimated EPS for FY2021 and FY2022 stands at Rs.20.82 and Rs.31.16 respectively as compared to EPS of Rs 14.35 for FY 2020. The stock is trading at a PE of 33.06 (FY 2020). Therefore, taking into consideration that this recommendation of Thyrocare Technologies Ltd is being given for 1 year time horizon.

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