Thyrocare Technologies Sees Steady 25% Revenue Growth In FY18

Thyrocare Technologies is not looking at raising prices, CEO A Velumani says.

A research assistant, works in the cancer research lab in Chicago, Illinois, U.S., (Photographer: Tim Boyle/Bloomberg)
A research assistant, works in the cancer research lab in Chicago, Illinois, U.S., (Photographer: Tim Boyle/Bloomberg)

Diagnostics firm Thyrocare Technologies Ltd. posted a 37 percent year-on-year growth in net profit for the financial year 2016-17, aided by six regional processing laboratories (RPLs) which were set up over the last 18 months .

The company plans to add at least another six RPLs in the next one year. The diagnostics company is betting on its radiology business to fuel revenue growth and profitability in the next decade, promoter and Chief Executive Officer A Velumani told BloombergQuint in a post-earnings interaction.

While the company has delivered close to 25 percent growth in the last decade, Velumani sounded confident of maintaining that run rate in FY18 with an operating (EBITDA) margin of 40 percent.

The increased interest in the diagnostics industry has been disruptive, leading to pricing pressures owing to increased competitive intensity, he said. The company has not changed its pricing strategy in the last two years given good growth. However, pricing pressures will continue for the diagnostic industry going forward, Velumani added.

In the long run, prices will get optimised. It won’t be as high as it is today. Those who have their prices obnoxiously high will have to tweak it acceptable prices.
A Velumani, Promoter & CEO, Thyrocare Technologies

He said that any price controls implemented by the government for diagnostics and equipment in the future will be good news for Thyrocare Technologies as it is a low-cost operator.

Strong Q4 Results

Thyrocare Technologies reported a strong operational performance in the fourth quarter, meeting analyst estimates. January-March is a seasonally strong quarter for the company’s diagnostic testing services segment, Velumani said.

Net profit jumped 36 percent to Rs 18.95 crore from Rs 13.93 crore in the corresponding quarter of the previous year, the company said in a media statement. The consensus estimate of analysts tracked by Bloomberg stood at Rs 19.5 crore.

Revenue increased 31 percent to Rs 88.28 crore from Rs 67.32 crore in the year-ago period. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 25.8 percent to Rs 33.78 crore as against Rs 26.85 crore last year. EBITDA margins contracted 160 basis points to 38.3 percent from 39.9 percent.