The success saga of India’s first fully automated diagnostic laboratory
Words: Shalet James Images: Various sources
Thyroid disorders like hypothyroidism, hyperthyroidism, Hashimoto’s thyroiditis and Thyroid cancer are familiar health issues that we come across these days. However, this wasn’t the scenario in 1995, when people were unaware of the effects of Thyroid hormone levels in the body and few reputable thyroid testing facilities existed. Realizing the dearth of quality Thyroid detection centers in India, Dr. Arokiaswamy Velumani, a former employee of Bhabha Atomic Research Centre and a Ph.D. holder in Thyroid Biochemistry decided to bring in a change. Abiding by the age-old proverb, “prevention is better than cure”, Dr. A Velumani with an initial investment of Rs. 1,00,000 started Thyrocare Technologies (TTL) in 1996 with a primary focus on Thyroid testing. Today, Thyrocare is one of the largest organized diagnostic services providers in India with an extensive range of health care testing solutions ranging from cancer, diabetes, infertility to sexually transmitted diseases through its IT-enabled, 24×7, fully automated diagnostic laboratory situated in Mumbai, among the largest of its kind globally.
Initiation
Thyrocare is India’s first fully automated diagnostic laboratory which is capable of processing 50,000 samples and conducting 2 lakh tests per day. The brainchild of Dr. A Velumani, Thyrocare is known for its unique business approach which focuses on speed, error free testing and low cost services. Thyrocare has now turned into a Rs. 3,300 crore (Rs. 33 billion) company.In the Diagnostic Industry, Thyrocare sets the standards with 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 – giving its clients the best that advances in science and technology have to offer at an affordable cost.
“We started a frugal business model which focused on testing Thyroid. Our services were among the best in the industry but were priced affordably. That quality and pricing gave rise to volumes and today we have a mammoth company listed on the National Stock Exchange with a market cap of half a billion dollars. My biggest inspiration is my wife Sumathi who supported me whole-heartedly to nurture and grow the business. She must have read not less than a million emails and 10,000 files in the company in her last 10 years of life. Though she has left us, her memories will keep encouraging me and our children to accomplish more in life”, said Dr. A Velumani, Founder, Thyrocare Technologies.
Gaining Momentum
Having seen the delays when labs would accumulate samples for as long as a week before using the RIAA kits prevalent at the time to do Thyroid tests, Dr. Velumani brought in a new model which ran tests every day. Thyrocare gained momentum within one year of its hitting the market. It conducted over 10,000 tests a month in less than 2 years. Thyrocare attracted international Investors and partners who made a beeline for partnering up with the company. In 2011, Dr. Velumani forayed into the imaging space with the launch of Nueclear Healthcare to deliver PET-CT imaging at less than 50% of market pricing to cancer patients.
Business Strategy
Over the next three years, wellness and preventive healthcare industry are expected to grow at a CAGR of close to 25%. Currently, organized pan India diagnostics chain have 15-20% market share which presents a huge opportunity to grow in future.
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. Thyrocare’s Mini Aarogyam is among the cheapest wellness profiles in India and includes all tests essential to monitor basic health. The company primarily operates its testing services through a fully automated CPL (Central Processing Laboratory) which is located in Navi Mumbai and supported by a network of (RPLs) located at New Delhi, Coimbatore, Hyderabad, Kolkata, and Bhopal.
TTL’s B2B model services laboratory partners rather than consumers directly. This unique model allows Thyrocare to leverage the smaller, unorganized players’ local knowledge and grow with the market instead of competing headlong with it. 85% of Thyrocare’s revenues come from this B2B channel as against 30-40% for its peers. This enables the company to keep its overheads far lower when compared to its peers – Thyrocare has an EBITDA margin of 40%, while most peers fall within the range of 15-27%.
Family & Business
Dr. A Velumani is happy that his children Anand and AmruthaVelumani are keen on learning the business model of Thyrocare Technologies. “They have been in the laboratory from their age of 10. Today, they have 15 years of experience when it comes to Thyrocare’s people, processes, and possibilities. They are as of now assisting me in running three responsibilities – Promoter, MD, and CEO – in various ways. They have requested me not to offer any position till they reach 30 years of age. I am also not in a hurry since they are in the learning stage,” added Dr. A Velumani.
Eyeing Growth
With the USP, ‘Think Thyroid, Think Thyrocare,’ Thyrocare Technologies ensures that its services reach the bottom of the pyramid while keeping an eye on profitability. Thyrocare 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. Offering cost-effective and affordable tests for people, Dr. A Velumani plans to come up with innovative ideas and not only meet, but perhaps exceed the global standards for best of quality service delivery.