Thyrocare Technologies Limited

Thyrocare Technologies delivered a robust Q2 FY26, with consolidated revenue growing 22% year-on-year to INR 217 crores, and standalone revenue reaching a record INR 200 crores, up 24% YoY. The company achieved a standalone normalized EBITDA margin of 36%, an improvement of 470 basis points YoY, driven by operational efficiencies and a favorable product mix. Net profit and EPS both surged by 82% YoY, with EPS reaching INR 9.05. In recognition of this performance and to reward shareholders, the Board approved a 2:1 bonus share issue and an interim dividend of INR 7 per equity share.

The company processed 53.3 million tests, marking a 21% year-on-year increase, and served 5 million patients, up 12% YoY. This growth was supported by a non-COVID CAGR of 19% over the last four years. Thyrocare continues to prioritize quality, achieving 100% NABL accreditation across all labs and reducing complaints per million to 3.8% from 11.8% in Q2 FY25, aiming for Six Sigma standards. Operational efficiency improvements also led to a reduced turnaround time of 3.52 hours after samples reached the lab.

Thyrocare's franchisee base expanded significantly to over 10,100 active quarterly franchisees, up from 8,446 in the prior year, supported by a pay-for-performance structure and expanded field teams. The franchisee business revenue grew 20% YoY, while the partnerships business, representing online channels, saw a 35% growth. The API PharmEasy Diagnostics business also contributed strongly with a 46% YoY growth. The company's B2B model, serving various healthcare entities, remains central to its strategy, supported by a network of 1,900 phlebotomists.

Thyrocare continues to invest in innovation, having conducted large-scale studies on HbA1c and fever panels, and adding advanced technologies like histopathology and PCR platforms. A significant future growth opportunity is identified in diagnostics related to GLP-1 weight loss drugs, with management actively developing complementary pre, during, and post-therapy packages. The company is also expanding its international footprint, with the nascent Tanzania business growing 30% quarter-on-quarter and projected to double revenues this year, aiming for breakeven within 18-24 months.

The company maintains a strong balance sheet, being debt-free with over INR 190 crores in net cash and cash equivalents. Cash flow from operating activities for H1 FY26 was INR 127 crores, a 43% increase YoY. Strategic investments include heavy expenditure in cold chain logistics, with every sample box now equipped with a data logger for end-to-end tracking. Lab expansion is data-driven, ensuring immediate utilization and avoiding EBITDA burnout, as demonstrated by new labs like Bhagalpur being full from day one. The integration of Polo and Vimta networks has streamlined operations, resulting in a current network of 37 labs in India and one in Tanzania.

The radiology business, which was previously loss-making, has undergone a strategic shift to prioritize profitability over unprofitable growth. While active centers showed a modest 3% YoY revenue growth this quarter, the focus has been on increasing realization per scan. Management expects revenue growth to return in the next quarter (OND quarter) as all centers become fully operational, indicating a successful turnaround and contribution to the bottom line.