P. T. Jyothi Datta

Mumbai, Dec. 25

Thyrocare promoter Dr A. Velumani shies away from being called the Captain Gopinath of diagnostics.

But like Captain Gopinath, who made flying an option for more people through low-cost carriers, Dr Velumani is looking to repeat his Thyrocare experience in radiology and oncology as well. Under the proposed ‘Nueclear' brand name, the new centres would offer cancer-related imaging services at half the industry rates, along the lines of Thyrocare that does thyroid-related tests at a fraction of the industry cost, he says, adding “cancer patients in the country need it”.

“Captain Gopinath and Ambani beat competition with lower costs,” he says. “Work on volumes and you will never be at a loss.”. Thyrocare's thyroid tests “are the cheapest on earth” and the company still has a 55 per cent EBITDA (earnings before interest, tax, depreciation , and amortisation), indicating profitability.

Nuclear medicine plans

Few hospitals in the country offer nuclear medicine, as they are the “costliest” and equipment is expensive, Dr Velumani told Business Line.

A centre with nuclear imaging equipment (cyclotrons, positron emission tomography-computed tomography or PET-CT, etc.) requires an estimated Rs 100-crore investment. Their first such centre will be operationalised by May 2011 in Navi Mumbai.

In fact, Thyrocare Technologies has formalised a deal to offload 30 per cent equity in the company to private equity Cx Partners for an estimated Rs 188 crore. A new company will be floated for the capital-intensive business, said 51-year-old Dr Velumani, a former “nuclear medicine man” who worked with Bhabha Atomic Research Centre.

Low cost

Explaining how Thyrocare manages to offer economical prices, he says thyroid-tests are offered at half the industry rates by running the machines round the clock. A machine costs about Rs 1 crore and the company now has 15 machines, generating greater volumes. In nuclear scans, institutions run their machines for fewer hours, given their target population. “Business is not just an Excel sheet. Do it differently and you are likely to be more successful.”

The first tranche (Rs 80 crore) of private equity money will fund the first nuclear imaging centre and in six months, a decision would be taken on whether the network focuses only on diagnostics or on radio-therapy as well, he explained.

In two years, the company plans to have five such centres in place, funded through internal funds and money from banks or investors, he added.

“If people travelled to CMC (Vellore), Tata Memorial Hospital (Mumbai) and AIIMS (All India Institute of Medical Sciences – New Delhi) for their service,” they would travel to the company's regional nuclear imaging centres, as well, he said, for quality services at a nominal cost. Looking to clock Rs 85 crore by March 2011, Thyrocare has 570 collection centres, with a central processing centre at Mumbai. It also has a 30-member call centre to support it.

(This article was published in the Business Line print edition dated December 26, 2010)
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