Thyrocare Technologies’ steady revival is beginning to bear fruit, as the strategic course it charted two years ago continues to translate into stronger growth and healthier margins. The diagnostics firm’s July–September quarter performance underlines that shift, powered by operational efficiency, a sharper franchise model, and disciplined cost control, marking a clear turnaround from its post-Covid slump.
After a turbulent period following its 2021 acquisition by API Holdings, parent of PharmEasy, Thyrocare undertook a broad restructuring in FY24 aimed at stabilising its core business. It streamlined costs, introduced a “pay-for-performance” compensation model across its franchise network, and recalibrated its focus towards sustainable, volume-led growth. Those measures are now yielding visible results.
Revenue in the second quarter rose more than 20% year-on-year to Rs 216.5 crore, the fifth straight quarter of such growth, while profit after tax surged 80% to Rs 48 crore. Operating margins climbed to 33%, the highest since the Covid testing boom, signalling a meaningful improvement in the company’s underlying business dynamics.
Much of this momentum has come from Thyrocare’s franchise-led pathology segment, which accounts for nearly 93% of revenue and grew 24.5% during the quarter. The renewed incentive structure has reinvigorated franchise partners nationwide, with the active network expanding to 10,100 centres from 9,551 in the previous quarter. Fully branded outlets now contribute 40% of franchise revenue, reflecting a more cohesive brand presence.
The operational reset has also lifted gross margins by 100 basis points sequentially to 72.3%. Lower repeat testing and wastage, procurement savings from vendor consolidation, and a better product mix have all contributed. Importantly, Thyrocare has stayed committed to driving volume rather than relying on price hikes, even as it continues to pass on tax benefits like the recent GST reduction on diagnostic tests.
Pathology volumes grew 21% year-on-year in Q2, supported by its bundled test portfolios, Aarogyam and Jaanch, which rose 19% and 31% respectively. International markets such as Tanzania are expanding at a 30% annual rate, with management expecting break even within two years.
Thyrocare’s improving fundamentals align with PharmEasy’s broader strategic pivot from rapid expansion to profitability. Over the past two financial years, PharmEasy’s losses have narrowed sharply, from Rs 5,211.7 crore in FY23 to Rs 1,516.8 crore in FY25, even as revenue eased 12% to Rs 5,872.1 crore. The parent’s recent Rs 1,700-crore debt raise, used to refinance earlier loans tied to the 2021 Thyrocare acquisition, underscores its focus on balance-sheet discipline.
The strong Q2 performance pushed its shares to a one-year high of Rs 1,470 during Wednesday’s session. Brokerages remain optimistic, with ICICI Securities estimating full-year profit at Rs 170.8 crore, nearly back to FY22 levels, when pandemic testing had briefly inflated diagnostic volumes.