Bl**dy good business

The job sucked. Well, it was not all that bad being a scientific officer at the Bhabha Atomic Research Centre’s hospital and doing thyroid tests on blood samples. But Dr A. Velumani figured he could make more money setting up his own lab. So, it was that one day in 1995 he resigned and went home to unveil his plans to his wife.

A science graduate who had later done a Master’s and doctoral thesis on the thyroid, Velumani had to fall back on his provident fund corpus, a princely Rs 95,000, to build the lab. With thyroid testing done mostly for women, it was logical to bung in tests for fertility, pregnancy, etc., once the lab’s business stabilised.

THYROCARE TECHNOLOGIES

BUSINESS: Blood testing

TURNOVER: Rs 50 crore

TURNING POINT: When it began air-freighting blood samples.

LESS-KNOWN FACT: Collects 12,000 blood samples a day from across the country.

LEADERSHIP POSITION: Nearest competitor does half in terms of volumes in this segment.

“I had no big dream, no business model when I started. Some ideas came later and the environment helped” - Dr A. Velumani, Founder, Thyrocare

Velumani’s advantage lay in the fact that, in those days, thyroid tests needed radio isotopes and so were restricted to facilities like BARC, and he had developed an expertise in the field.

Today, Thyrocare Technologies, the company Velumani founded, is valued by outside investors at Rs 500 crore and has many private equity suitors thanks to the returns: a profit of Rs 30 crore on a turnover of just Rs 50 crore. But Velumani is not in a hurry to borrow or take PE partners.

When he started his lab in 1995, there were 3,000 competitors in the testing field. To gain market leadership, he began by expanding his network of blood sample collection centres to towns around Mumbai, and then went further afield by getting samples airlifted to his lab. In fact, he carried the first such sample in 1998 on a flight from Chennai to Mumbai.

By its sixth year, Thyrocare Technologies had partners in 300 cities across India connected by air, and broke even. Velumani found willing partners among small labs and hospitals and physicians not attached to any hospital. “Mine is a B2B business,” he says.

His lab, on an average, does four to five tests for each blood sample. The tests are done overnight and the report e-mailed to the collection centre within 24 hours for most tests.

Things were different when it began: There were only 30 air locations, Jet Airways was the only private operator and Thyrocare had to pay Rs 600 to get one sample air-freighted. Even the courier industry was not mature, and STD calls cost Rs 90 for two minutes. Today, consignment costs are down to Rs 150 each, and STD rates are negligible and even reagent and chemical prices are down.

A couple of years ago he moved into a new facility in Navi Mumbai, which can analyse 50,000 samples a day. His next plan is to implement in-vivo diagnostics only for CT and MRI scans, beginning with 10 cities and roping in an investor.