Thyrocare Technologies Limited

Thyrocare Technologies delivered a robust Q3 FY26, with consolidated revenue growing 18% year-on-year to INR 196 crores, and stand-alone revenue up 20% to INR 183 crores. The pathology business was a key driver, growing 20% YoY. Profitability significantly improved, with consolidated normalized EBITDA margin reaching 32% (up 26% YoY) and reported PAT increasing by 47%. EPS for the quarter was INR 1.64, a 39% increase from the previous year.

The company processed 49.6 million tests, marking a 22% YoY increase, and served 4.5 million patients, up 14% YoY. Thyrocare expanded its active franchisee base to 10,300, adding 200 new franchisees in the quarter. A significant achievement was reaching a Six Sigma quality level, with complaints per million tests reduced to 3.2, a 43% YoY improvement. The lab network expanded to 39 in India and 1 in Tanzania, with two new labs commissioned in Davangere and Mandi.

Growth was broad-based across segments. The core franchisee business grew 12% YoY, while the partnerships business demonstrated strong momentum with 39% YoY growth, including a 30% increase from the API PharmEasy partnership. The pre-policy medical checkup insurance business saw a substantial 70% YoY growth, and Polo reported a 29% YoY increase. The nascent Tanzania business also showed impressive 140% YoY revenue growth.

Management reiterated its long-term consolidated growth rate guidance of mid-teens, with franchise business expected to grow 12-15% and partnerships at 1.5 times that rate. To sustain this growth, Thyrocare plans to invest in specialty diagnostics, including expanding its field force by 40 people in the next financial year and maintaining 80 doctors on staff. These investments are expected to limit further EBITDA margin expansion beyond the current 32%.

The company clarified its accounting treatment for Right-of-Use (ROU) assets, stating that the capitalization of machines taken on reagent rentals is an existing policy under Ind AS 116. While the policy remains unchanged, the *amount* capitalized increased this quarter due to new machine additions. This resulted in an approximate INR 6 crores reduction in the cost of goods sold and a corresponding increase in depreciation for the quarter, with no material impact on the profit and loss account.

Management noted that the uptake of GLP-1 related testing has been slower than anticipated, as patients on GLP-1 medicines have not yet matured to consistent testing. They believe it will take time for doctors to integrate GLP-1 results into treatment protocols and for market awareness to build. Despite this, Thyrocare is investing in educational programs to highlight the benefits of testing for liver, kidney, pancreas, and cardiac risk markers for GLP-1 users.