Key Financial Performance

Q2 FY27 Financial Highlights:

  • Standalone Revenue: INR256 crores, up 26.7% YoY
  • Consolidated Revenue: INR271 crores, up 25% YoY
  • Gross Margin: 74.2% (improvement of 190 basis points YoY)
  • EBITDA Margin: 33% with 25% YoY growth
  • PAT before exceptions: INR60 crores, up 26% YoY
  • PAT Margin: 22%
  • EPS before exceptions: INR3.78 (vs INR3.01 last year, 26% growth)
  • Net Cash: INR211 crores with zero debt as of September 30, 2026

H1 FY27 Performance:

  • Consolidated revenue up 25% YoY
  • EBITDA growing 29% YoY
  • PAT growing 30% YoY
  • Operating cash flow: INR133 crores
  • Capex: INR30 crores invested for lab expansion and capacity

Operational and Business Metrics

Franchise Business:

  • 27% YoY growth in franchise business
  • Added 1,180 franchises in Q2 (highest quarterly addition in 3 years)
  • Active franchise base reached 12,911 (4x growth from acquisition base)
  • Average revenue per franchisee: ~INR1.2 lakh per quarter

Laboratory Network:

  • Total labs: 49 (48 in India, 1 in Tanzania)
  • Added 5 new labs in Q2: Asansol, Nashik, Madurai, Jabalpur (regional processing labs), and Jamshedpur (hybrid lab partnership)
  • 96% of samples processed in NABL-accredited labs
  • Lab coverage: Within 150km across most of India

Test Menu and Quality:

  • Test menu expanded to 1,420 tests (nearly 5x growth)
  • 108 MD pathologists
  • All labs NABL accredited
  • 2,100+ phlebotomists with 99% on-time arrival rate
  • Complaint rate: 2.9 per million tests (within Six Sigma levels)
  • Average turnaround time: 3.5 hours

Specialty Diagnostics:

  • Contributing 4% of pathology revenue
  • Focus areas: Genomics (NIPT) and allergy testing
  • Dedicated specialty team engaging physicians and hospitals
  • Early traction showing promising results

Strategic Initiatives and Updates

NHL Divestment:

  • Board approved disinvestment of Nueclear Healthcare Limited (radiology business) to Trovera
  • Consideration: INR141 crores (INR81.9 crores cash + INR59.5 crores equity)
  • Strategic rationale: Focus on pathology business with higher growth, profitability (34.9% ROCE vs NHL's 6.95%), and return on capital
  • NHL showed 9% degrowth over past 5 quarters vs Thyrocare's 22%+ growth
  • NHL was pulling consolidated revenue growth down by 2% and EBITDA margin by 1%
  • Shareholder approval and SPA execution pending
  • Impairment taken: INR9 crores in standalone books, INR45 crores in consolidated books against goodwill

New Product Launch:

  • Thyrocare Pregnancy Test Kit launched (rapid home test with 5-minute results, 99% accuracy)
  • MRP: INR60
  • Includes coupon for Beta hCG blood test at half price (INR399 vs INR800)
  • Brand ambassador: Yami Gautam
  • Distribution through API Holdings network (PharmEasy, Ascent) - already in 10,000+ pharmacies
  • Gross margin comparable to diagnostics business
  • Marketing investment: INR1.5 crores in Q2, expected INR3 crores in Q3

Expansion Strategy:

  • Focus on Tier 2 and Tier 3 markets
  • API-based integration for quick partner onboarding
  • Continued investment in digital capabilities across booking, logistics, lab operations, and reporting
  • Open to acquisitions in Gujarat, Rajasthan, Northeast, and specialty diagnostics

Management Commentary and Guidance

Growth Outlook:

  • Sustained 20%+ growth over last 9 quarters
  • Q2 and Q1 both grew at 25%+
  • Expect to maintain early 20s growth for full year
  • Targeting 10-15% revenue contribution from specialty diagnostics in 3-5 years

Margin Guidance:

  • Long-term EBITDA margin guidance: 31-31.5%
  • Reinvesting operating leverage into growth initiatives
  • Employee costs increased due to inflation, higher volumes, lab expansion, and new growth areas

Franchise Strategy:

  • Expect to maintain 1,500-2,000 franchise additions annually
  • Targeting 20,000-25,000 franchisees in 5 years
  • Focus on both deeper penetration in existing markets and new geographies

Q&A Session Highlights

Corporate Actions:

  • No current evaluation of API-Thyrocare merger or reverse merger
  • API Group needs to achieve profitability ex-Thyrocare first (expected Q4 FY27)
  • No intent for API Holdings to reduce stake below 51%

Financial Details:

  • ESOP cost: ~INR4 crores each in Q1 and Q2
  • Pregnancy kit launch expenses: INR1.5 crores in Q2, expected INR3 crores in Q3
  • Franchise additions: 800 branded centers, rest unbranded in H1

Operational Metrics:

  • Test volume growth: 27% YoY
  • Patient growth: 13% YoY
  • Tests per patient: 12% increase through bundling strategy
  • Partnership business grew 28% YoY, led by insurance and health tech
  • PharmEasy contributes ~11% of partnership business