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 trendsMedical 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 scan40,000 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.