Thyrocare

Life, logic & logistics- 24*7

Asia Marketing Summit, Jan 2006

Rahul Mirchandani & Amit Rangnekar
PhD- NMIMS-2004 Batch

Circa 2005 Trichy

Thangam consults her Dr on her gynaec condition

Dr recommends specialized tests, results in 24 hours
No specilaised diagnaostic facility in Trichy
Dr advises test results from Mumbai
Thangam is dumbstruck
Dr reassures Go to this Trichy address, drop your
samples. This is a franchisee for the Worlds Largest
Thyroid Testing laboratory, Thyrocare. Your sample
will be airlifted to Mumbai and test results will be
ready in Trichy by next morning. All for Rs 150.
How does Thyrocare deliver such an economical,
reliable and speedy diagnostic service?

World Diagnostics Market trends

Medical insurance (US) or state (Europe) funded

Expensive, 20 times the cost in India
Governments concerned with healthcare costs
Lifestyle changes increase vulnerability of working age
groups to cardiovascular diseases, diabetes & obesity
Higher life expectancy- Newer diseases- Cancer, Neuro,
Renal ailments
Demographic shifts driving the demand

Indian Diagnostics Market trends

Unorganised market
Very low penetration- too many patho / diagnostic labs
in the cities, too few in the villages
Medical insurance in nascent stage
Huge margins but intense competition
Demographic changes drive demand
Health awareness and increasing affluence will drive
future demand

In India,
detection is
not done till
it is too
late. 90%
of serious
cases are
detected
only in the
last stage.
Increasing
awareness,
counseling,
and testing
are vital.
Dr Hamied,
CMD, Cipla

Thyrocare identity
Worlds largest thyroid testing set-up
World class systems
Specialized serum based diagnostic procedures with focus
on Thyroid care
Economy pricing
No walk-in patients, no microscope
No routine blood and urine pathology tests
Results delivered next day, from anywhere in India
Accessibility, affordability and hope for a billion Indians

Thyrocare model
Build critical mass
Provide a cost effective service
Work with a reasonable 40% margin, against industry
standards of 100-200%.
200% CAGR, more than doubles turnover every year
FY 2004-05- Rs 25 crores

Competitive scan

40,000 unorganized/ stand-alone labs

Pharma majors- Ranbaxy (SRL),Nicholas Piramal
Home-grown chains- Medinova, Anands,
Metro competition- Dr Lals Delhi & Metropolis Mumbai
SRL, only other national player but 25% of Thyrocares volumes
Pathnet- JV between Dr Reddys & Gribbles (Australia) wound up
in 2 years
Reliance life sciences- insignificant
Total competitive samples, not even 50% of
Thyrocares 6000 per day.

Thyronomics

Competitive deterrents
Set-up costs approximately Rs 10 Crores upfront
Includes Rs 5 Crores each on machinery and operations
Time frame, systems, logistical framework required to
generate optimal volumes
Reach, network, cost leadership
Robust & scalable model
Thyrocare would continue to dominate in the near future

Dr Velumani speak
My aim was to provide cost effective service at uniform
rates throughout the length and breadth of India.
With IT at the back end and biotech at the front end,
Thyrocare created a business out of nowhere.
All our marketing is done by our competitors
Thyrocare has always pursued social profits

Strategic Milestones

Thyrocares Global Gameplan

Positioned as a value player for opportunities in clinical
research, testing and diagnostics with pharma majors
Expand abroad with off shore processing of samples
collected in European, Asian and Middle Eastern nations.
Due diligence- samples from Shanghai can be collected,
procrssed and results delivered within 24 hours at a cost
of only 20 US cents!

Key drivers

Cost leadership
Scale economies
Skills
Set-up
Robust, scalable model
Technology driven
World class
Vision
Size will help scale and scope

Downsides
International operations would necessitate a careful
study of the organized competition and regulatory
frameworks.