Thyrocare Technologies Ltd Management Discussions

Overview

Thyrocare is one of the leading pan-India diagnostic chains that conducts an array of medical diagnostic tests and profiles of tests that centre on early detection and management of health disorders and diseases. We have processed more than 22 million samples in the last year, thus serving more than 15 million patients, with remarkable turnaround time, accuracy in reporting and in compliance, mainly due to our decades long experience in dealing with the diagnostic needs of people. We performed more than 147 million clinical investigations during the previous year, highest compared to any of our peers in the industry and catered to more than 570 districts of the country.

As of March 31, 2024, we offered 929 distinct tests and 288 profiles of tests to detect many health disorders, including those relating to thyroid disorders, growth disorders, metabolism disorders, auto-immunity, diabetes, anaemia, cardiovascular conditions, infertility and various infectious diseases. Our 43 profiles are administered under our "Aarogyam" brand, which offers patients a suite of wellness and preventive health care tests. We primarily operate our testing services through a fully automated Centralised Processing Laboratory (the "CPL") and have expanded our operations to include a network of Zonal Processing Laboratories (the "ZPLs"), Regional Processing Laboratories (the "RPLs") and Satellite Processing Laboratories (the "SPL").

Through our wholly-owned subsidiary, Nueclear Healthcare Limited, we operate a network of molecular imaging centres in New Delhi, Lucknow, Navi Mumbai, Hyderabad, Central Mumbai, Western Mumbai, Nashik, Baroda, Surat and Bengaluru, focused on early and effective cancer monitoring. We performed 31,505 PET-CT scans during the previous year throughout the country.

Our CPLs, located in Navi Mumbai and Delhi, are equipped with automated systems, diagnostic testing instruments and processes from leading international and Indian healthcare brands. The CPL is fully automated and driven by a barcoded and bi-directionally-interfaced system and laboratory information system. The CPL meets international standards of quality and has received global accreditations from College of American Pathologists (CAP), National Accreditation Board for Testing and Calibration Laboratories (NABL) and the ISO. We commenced setting up RPLs in 2014 and currently operate 19 RPLs in various key cities of the country which process samples sourced from the respective regions. We commenced setting up Zonal Processing Laboratories (ZPLs) in 2021, to ensure that these ZPLs perform certain advanced tests that are currently managed from the centralised processing laboratory. Currently, we operate 2

ZPLs at Bengaluru and Kolkata and additionally we have also commissioned 6 satellite labs at Indore, Bengaluru, Mumbai, Mohali, Visakhapatnam and Goa for faster turnaround and better reach.

We collect samples through a pan-India network of authorised service providers, who in turn source these samples from local hospitals, laboratories, diagnostic centres, nursing homes, clinics and doctors that avail diagnostic services from us. As on March 31, 2024, we had a network of more than 7900 active franchisees, comprising local hospitals, laboratories, diagnostic centres, nursing homes, clinics and doctors spread across more than 570 districts covering all the states within the country. Our widespread network of authorised service providers has enabled us to expand the reach of the CPL, RPLs, ZPL and SPLs thereby providing us with access to a larger customer base.

Through Nueclear, we are developing a growing network of molecular imaging centres that primarily focus on early and effective cancer screening. Each of our imaging centres use PET-CT scanners to assist in cancer diagnosis, staging, monitoring of treatment, and efficacy and evaluation of disease recurrence. We currently have 10 active PET-CT scanners in our 10 active imaging centres : one in New Delhi, one in Navi Mumbai, one each in Lucknow, Hyderabad, Central Mumbai, Western Mumbai, Baroda, Nashik, Surat and Bengaluru. Nueclear also owns and operates a medical cyclotron unit in Navi Mumbai, which produces the radioactive biomarker FDG required for PET-CT scanning. We believe we have developed a platform of affordable diagnostic services and are poised to further enhance our services and test offerings.

Our key competitive strengths are :

• Quality in testing and reporting, supported by our accreditations

• Our tech integration enables us to serve our patients within the best possible turnaround time

• Our strong network in the country and trust of our patients

• Portfolio of specialised tests with an emphasis on wellness and preventive healthcare

• Multi-lab model driving volume growth and economies of scale

• Pan-India collection network supported by logistics, capabilities and information technology infrastructure

• Capital efficiencies in our diagnostic testing business

• Experienced senior leadership and management team

Industry structure and developments

The Indian diagnostics industry has emerged as a preferred play within the expanding healthcare landscape, driven by attractive margins and significant growth potential. With a market size of ~US$ 13 billion in FY23, the domestic diagnostics industry is projected to grow at a CAGR of ~14% over the next five years (Praxis report Feb 2024). This growth trajectory will be fueled by rising factors such as the increasing prevalence of chronic diseases, growth in the geriatric population, rising demand for preventive tests, and government initiatives. Government Healthcare Expenditure as a percentage of GDP in India is lower compared to other countries. However, it is on an upward trajectory, with expectations to reach around 3.2% of GDP by FY33. This increase in Government Healthcare Expenditure is anticipated to correlate with a rise in GDP per capita, indicating a positive outlook for government investment in healthcare.

The diagnostics industry is marked by a high degree of fragmentation, with standalone centres accounting for 46%, followed by private hospital-based labs at 28%, government hospitals at 11%, regional chains at 9% and national chains at only 6%. While this fragmentation presents challenges in terms of capabilities and scalability, it also offers opportunities for consolidation and the emergence of new business models. The supply of healthcare facilities in India is largely fragmented, with about 16% of healthcare facilities accounting for 42% of the bed capacity and 46% of the healthcare delivery market. The pathology lab landscape also reflects a similar pattern of concentration, with a small percentage of labs conducting a significant portion of tests and generating a substantial share of the market revenue.

The industry is dominated by small and regional unorganised diagnostic laboratories, which controls more than 70% of the total diagnostic market. Before the pandemic, due to significant latent demand emerging on the back of improved economic conditions in the country and a rapidly emerging urban population, a significant chunk of diagnostic business was getting converted from unorganised to organised. There are no entry barriers, therefore more and more unorganised players are entering into the space and there seems to be no significant shift in the share of organised players in the total diagnostic market. However, COVID-19 has deeply impacted the landscape of Indian diagnostics. There is increased reliance on organised players as local unorganised players are facing operational challenges. Besides, there is a higher degree of trust in established brands with high-tech and accredited laboratories.

India is experiencing demographic shifts with an ageing population, where the share of individuals above 60 years of age is expected to reach about 13% by CY31. Concurrently, the burden of non-communicable diseases is rising, projected to account for ~74% of deaths by CY30. These trends underscore the growing demand for healthcare services.

Pathology contributes the majority share at ~58% with radiology accounting for the remaining ~42%, covering tests such as CT scans, MRI, nuclear imaging, and ultrasound scans.

Strategy

Our strategic objective is to have sustainable productive growth by maintaining profit margins, without compromising on the quality or the delivery cost of our services.

Tests you can trust

Thyrocare as a brand has evolved over the years without compromise on the quality of our testing and reporting. With a legacy of more than 25 years, we are trusted by billions of patients across the country, for their diagnostic needs. We are a familiar brand name in the diagnostic industry and amongst doctors for our preventive healthcare profile offering. In fact, we have pioneered the preventive trend in the healthcare segment. Thyrocare that started by offering only 3 tests back in 1996, i.e. T3, T4 and TSH, now offer more than 920 tests on the platform, with unmatched quality and precision across the country. Our patients trust on our process and test results have birthed our new tagline "Tests You Can Trust", revamped with our new logo.

An invincible combination with Pharmeasy

Our association with Pharmeasy is uniquely advantaged in the diagnostic space. Our lean cost structure and national presence through a widespread B2B network, coupled with Pharmeasys technology support to scale operations at relatively low customer acquisition cost enables us to grow manifold in the coming years. We are targeting to cross-sell diagnostic services through Pharmeasy platform that regularly evidences online search by users for buying medicines. We consider these associations as our potential customers in the coming years for selling diagnostic services.

Focus on B2B business

We continue to expand our network of collection points, comprising local hospitals, laboratories, diagnostic centres, nursing homes, clinics and doctors, currently spread across more than 570 districts by effectively addressing the turnaround time difficulties faced by the network. We have initiated an engagement with doctors through our field force. We continue to work as back-end service providers for our B2B channel partners, thereby providing affordable diagnostic solutions to our patients and opportunities for channel partners to grow with us, rather than competing against us at the regional level.

To achieve sustainable growth, our business strategy is crafted along the following lines:

Expansion of our wellness product offerings

We have expanded our offerings substantially in the preventive care space. We introduced the plus and pro series in our flagship Aarogyam. We have also launched a set of Aarogyam

24x7 packages which are our non-fasting packages to offer round-the-clock diagnostic services on the wellness front. We have launched a new series of investigative packages under the brand name Jaanch. These packages are curated by doctors to help doctors and patients investigate specific chronic and lifestyle diseases in a much more targeted way. The way to think about it is that Aarogyam is our wellness brand, but Jaanch is our investigative or sickness brand. We now have doctor curated and targeted Jaanch profiles for hair fall, fever, PCOS, thyroid, any sickness or chronic condition. We have worked very closely with doctors to curate these packages to put the power of diagnosis in the hands of the patients and doctors and we have branded this series Jaanch and we have launched it across the country in the last few weeks.

Weve revamped our gynaec portfolio and relaunched it under the brand name of Her Check and it focuses on womens health. It is a range of 12 specialties & 30 packages designed to ensure 360-degree care check for womens reproductive health issues.

Weve also launched ‘Troponin I Heart Attack Risk Test for the first time in India to understand the risk of a heart attack with a single blood test.

We will continue to focus on the growth of our wellness and preventive healthcare offerings, in addition to expansion of our test offerings through aggressive price rationalisation. As the leaders in preventive care diagnostic test offerings with ‘Aarogyam brand, we recognise the growth opportunity in this segment and are well positioned to leverage our expertise and brand. We are focusing a significant proportion of our marketing efforts on preventive diagnostic and wellness offerings.

We intend to expand our diagnostic test offerings through the acquisition of new technologies, including instruments and processes. Our initiative to launch high quality Tuberculosis testing through the ‘Focus TB campaign has already begun to garner volumes. We intend to expand our footprints into other parts of the country by replicating the dedicated Focus TB laboratory setup.

Strategic set-up of Zonal Processing Laboratories (ZPLs) for advanced tests to grow our network of RPLs and authorised service providers.

We intend to set-up zonal processing laboratories for advanced diagnostic testing, in strategic locations across the country. Since March 2020, our operations were largely affected due to restrictions on the movement of goods and personnel across states. This has also resulted in some revenue erosion from certain advanced tests, performed in our centralised processing laboratory apart from impacting our turnaround time for these tests. In view of the huge post-pandemic growth potential, in highly underpenetrated diagnostic markets, we have set up a ZPL at Bengaluru and

Kolkata. These ZPLs, akin to our centralised processing laboratory, can perform some of the most complex and advanced tests with a reasonable turnaround time that enables us to cater to patient needs and also simultaneously compete with regional and national players effectively.

We intend to strengthen and grow our coverage of regions across India through our network of RPLs, SPLs and authorised service providers. By expanding this network, we plan to expand our customer base, generate a higher volume of samples for processing, improve our turnaround time and optimise our logistic costs.

We plan on targeted expansion by continuing to open RPLs in locations in close proximity to rail or road networks and in markets that are expected to generate high volumes of samples. To sustain our future growth and client base, we are also focused on increasing the number and service quality of the authorised service providers. We intend to use the expanded network of RPLs, SPLs and authorised service providers to bolster brand visibility and increase the service accessibility. We have a strong presence throughout the country, spread equally in all states through our touch points. We are also targeting the uncovered client base by penetrating deeper into the key regions and offering on door services to smaller clinics, dispensaries, laboratories and hospitals.

Continue to develop our subsidiary business to provide affordable PET-CT scanning.

We currently have 10 imaging centres operating 10 active PET-CT scanners. We believe that having backward integration with our own cyclotron provides us with greater flexibility, reliability and cost effectiveness as we expand our operations. We intend to increase the number of PET-CT scans per centre that would enable the newly started centre to attain break even by more matured centres funding the deployment of additional centres.

The lockdown imposed during the pandemic caused huge disruption, as movement of patients and FDG was limited, during this period. Learning from the experience, we intend to ensure that our PET-CT operations are set-up or transferred to locations near our medical cyclotron or locations where sustainable availability of FDG can be ensured through tie-ups with local medical cyclotron vendors. We intend to transfer existing PET-CTs to locations that can yield higher revenue with lower operational costs and activate those centres under dispute by settling the litigation.

Expand our service platform by developing new channels that leverage the strength of our brand and network.

We plan to increase the breadth of our testing and services platform through new channels that leverage our brand, multilab (regional processing) model and pan-India network of service providers.

We have 3 key pillars of growth. The first is our franchise business. The focus is to take our franchise business deeper into India with a focused test menu and provide our clients with a frictionless experience to transact with us and provide their customers the best testing experience.

We continue to focus on private as well as public partnerships. In the public space, we will focus on TB and infectious disease where we are by far one of the strongest players in these segments with large screening programmes partnering with health bodies and funding agencies who participate in this segment to provide better testing and care to the patients who are suffering from these diseases. Additionally, we will continue to expand our partnership across healthcare companies, hospitals, and other health services companies and enable them to provide diagnostic testing to their customers. The third area is new for us. We believe we have a strong and robust B2B model with a core of execution. We are ready to take this model forward with our entry in Tanzania. The opportunity is tremendous for us to be able to launch affordable tests.

Human Resource

At Thyrocare, we truly believe that the largest driving force of the organisations growth & success is our people. Our constant endeavour is to give our employees an engaging & learning environment with a strong foundation of trust for them to develop and thrive.

In the last year, we continued our journey on building talent internally and adding a host of young talent to our employee strength. We hired a total of 658 employees of which 45% were freshers (0 to 6 months experience). Our total headcount is now 1,751.

With a young and enthusiastic workforce, it is imperative to invest in their learning & development which sets them up for success in their professional journey. In the past year, we have organised various learning initiatives for our employees, maintaining a good mix of internal and external facilitators. We also encourage employees to pursue higher education through our programme to fund their education fees.

As we recreate ourselves in FY24, the focus areas for our peoples agenda will be to invest in young talent, enhance our benefit offerings and continue our focus on employee development.

Financial Performance

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards as notified by Ministry of Corporate Affairs pursuant to Section

133 of the Companies Act, 2013 (‘the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 (hereinafter referred to as the ‘Ind AS) and other relevant provisions of the Act.

The standalone financial statements were authorised for issue by the Companys Board of Directors on May 14, 2024.

I. Standalone Financial Performance

The management discussion and analysis given below relates to the audited standalone financial statements of Thyrocare Technologies Limited (hereinafter referred to as Thyrocare). The discussion should be read in conjunction with the financial statements and related notes to the financial statements for the year ended March 31,2024.

Summary

Revenue from operations of Thyrocare aggregated to 524.02 crore in FY24 as compared to 486.46 crore in FY23, registering a growth of 7.72%.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) (unadjusted) of Thyrocare aggregated to 133.87 crore in FY24 as compared to 112.01 crore in FY23. The normalised EBITDA after adjusting for provision for bad and doubtful debts and ESOPs costs was 158.02 crore in FY24 as compared to 142.51 crore in FY23.

Profit after tax and after exceptional items (PAT) (unadjusted) of Thyrocare aggregated to 71.14 crore in FY24 as compared to 56.97 crore in FY23.

Total Assets of Thyrocare after net off of liabilities aggregated to 513.81 crore in FY24 as compared to 521.04 crore in FY23.

Dividend

Thyrocare has determined that as a matter of policy, the net cash surplus after providing for tax, capital expenditure expected to be incurred during the next financial year, and any other anticipated requirement of funds, may be distributed among the shareholders as dividend for the financial year concerned. The Board of Directors on May 14, 2024 recommended and approved the payment of final dividend of 18/- (Rupees Eighteen only) per equity share of the face value of 10/- each subject to shareholders approval in an Annual General Meeting.

The following table provides the details of the standalone financial performance of Thyrocare -

	FY24			FY23
Particulars (Rs In crore)		% of Income	% growth compared to FY21		% of Income	% growth compared to FY21
Income from Operations	524.02	100.00	772	486.46	100.00	(13.37)
Expenses
Cost of Materials consumed/traded	157.59	30.07	0.78	156.37	32.14	(5.36)
Employee benefits expense	102.92	19.64	0.30	102.61	21.09	74.45
Other expenses	129.64	24.74	12.27	115.47	23.74	8.27
Total Expenses	390.15	74.45	4.19	374.45	76.97	13.23
Earnings before interest, tax, depreciation and amortisation (EBITDA)	133.89	25.55	19.52	112.01	23.03	(51.48)
Other income (net) excluding dividend & income from current investments	2.90	0.55	58.47	1.83	0.38	(55.04)
Dividend & income from current investments	4.28	0.82	20.11	3.56	0.73	6.91
Interest and Depreciation & amortisation expense	42.84	8.18	17.92	36.33	7.47	17.76
Profit before exceptional item and tax	98.22	18.74	21.13	81.07	16.67	(60.91)
Exceptional Items	-	-	-	-	-	-
Profit before tax (PBT)	98.22	18.74	21.13	81.07	16.67	(60.91)
Tax expense	27.08	5.17	12.37	24.10	4.95	(56.44)
Profit for the year (PAT)	71.14	13.58	24.84	56.97	11.71	(62.53)

Revenue from operations

Revenue from operations increased from 486.46 crore in FY23 to 524.02 crore in FY24, registering a growth of 7.72% (degrowth of 13.37% in FY23).

Expenses

Cost of material consumed

	FY24			FY23
In crore		% of reven. from diagn. services	% growth compared to FY23		% of reven. from diagn. services	% growth compared to FY22
Cost of materials consumed
Opening stock	26.03			23.00
Add: Adjustment on account of change in a/c policy	-			-
Purchases	173.76			153.09
	199.79			176.09
Less: Closing stock	44.39			26.03
Cost of material consumed [A]	155.40	29.66	3.56	150.06	30.85	(725)
Material consumed comprises:
Reagents/Diagnostics material	144.22	140.13	4.54	137.96	134.45	7.61
Consumables	11.18	8.62	(7.64)	12.1	10.48	(63.98)
	155.40	29.66	3.56	150.06	30.85	(725)

Cost of material consumed increased from 150.06 crore in FY23 to 155.40 crore in FY24 and the cost of material consumed to revenue from diagnostic services was 29.66% in FY24 (30.85% in FY23). Cost of material consumed includes the cost of reagents, diagnostic materials and other consumables instrumental in processing the samples.

Cost of material traded

	FY24			FY23
Rs In crore		% of reven. from diagn. services	% growth compared to FY23		% of reven. from diagn. services	% growth compared to FY22
Purchase of stock-in-trade
Point of care testing devices and strips	2.47			6.11
	2.47			6.11
Changes in inventories of stock-in-trade
Inventories at the end of the year:
Point of care testing devices and strips	1.30			1.02
	1.30			1.02
Inventories at the beginning of the year:
Point of care testing devices and strips	1.02			1.22
	1.02			1.22
Net change	(0.28)			0.20
Cost of material traded [B]	2.19	106.83	(65.29)	6.31	120.42	83.43

Cost of material comprises cost of point of care testing devices and consumables procured, the same are traded under the brand name ‘ThyroMart, mainly since the previous financial year. The cost of goods traded was at 2.19 crore in FY24 compared to 6.31 crore in FY24. This also includes the cost of material consumed for diagnostic business internally at discounted costs to the network.

Cost of Materials consumed/traded

	FY24			FY23
Rs In crore		% of reven. from sale	% growth compared to FY23		% of reven. from sale	% growth compared to FY22
Cost of Materials consumed/traded [A]+[B]	15759	30.07	0.78	156.37	32.14	(5.36)

The overall cost of material consumed/traded thus has increased from 156.37 crore in FY23 to 157.59 crore in FY24. The cost of material consumed/traded to income from operations was 30.07% (32.14% in FY23).

Employee benefits expense

	FY24		FY23
Rs In crore	% of Income		% of Income
Salaries, wages and bonus	74.93	14.30	71.90	14.78
Contributions to provident and other funds	4.58	0.87	4.88	1.00
Employees stock compensation expense	16.66	3.18	21.17	4.35
Gratuity	0.92	0.18	1.75	0.36
Compensated absences	2.07	0.40	0.93	0.19
Staff welfare expenses	3.76	0.72	1.98	0.41
	102.92	19.64	102.61	21.09

Total employee benefits expenses were 102.92 crore in FY24, as increased from 102.61 crore in FY23. The employees benefits expenses as percentage of income from operations was 19.64% in FY24 (21.09% in FY23). Employee benefit expenses increased Y-o-Y on account of additions in Senior Leadership, additions in the growth team to sustain growth and investments in quality personnel to fulfil NABL requirements over and above the average salary increments for employees of about 10% p.a.. Additionally, variable pay was introduced to the employees across the organisation for fostering performance-oriented appraisals for their contribution.

ESOP cost is recognised as share-based payment in the P&L and appropriately recognised in the balance sheet as Equity contribution from the parent.

Note: Total value of the ESOPs granted from parent group are 45.53 crore over a 6-year period (Year 1 - 39.7%, Year 2 - 31.4%, Year 3 - 16.2%, Year 4 - 9.0%, Year 5 - 3.5%, Year 6 - 0.2%)

Other expenses

	FY24		FY23
In crore	% of Income		% of Income
Healthcare service operation cost	33.80	6.45	39.21	8.06
Rent	2.29	0.44	3.93	0.81
Sales incentive	12.58	2.40	11.52	2.37
Business promotion	16.08	3.07	6.35	1.30
Advertisement expenses	0.00	0.00	0.00	0.00
Power and fuel and water	7.99	1.52	8.56	1.76
Printing and stationery	1.83	0.35	2.44	0.50
Postage and courier	3.44	0.66	3.48	0.71
Others	51.63	9.85	39.99	8.22
	129.64	24.74	115.47	23.74

Other expenses as percentage of revenue have increased to 24.74% in FY24 (23.74% in FY23). Other expenses primarily consisted of healthcare service operation cost, sales incentives, power & fuel, etc. Healthcare service operation cost contribute to 26% of the total costs (34% in FY23) which comprises costs incurred for collection & handling of samples. Sales incentives primarily represented incentives paid to Direct Sales Associates (DSAs) for patients referred to the Company and relates mainly to B2C business. Expenses in other categories have gone up due to various reasons such as investments in technology infrastructure, quality & accreditations, and business promotions.

Earnings before interest, tax, depreciation, and amortisation (EBITDA)

In FY24 the EBITDA (unadjusted) was 133.87 crore (25.55% of income from operations) as compared to 112.01 crore (23.03% of income from operations) in FY23. The normalised EBITDA after adjusting for provision for bad and doubtful debts and ESOPs costs was 158.02 crore as compared to 142.51 crore in FY23. The EBITDA has increased due to better gross margin realisation.

Other income (net)

	FY24		FY23
Rs In crore	% of Income		% of Income
Net gain on investments	4.28	0.81	3.56	0.72
Interest income	2.50	0.47	1.00	0.20
Others	0.4	0.08	0.83	0.17
	718	1.35	5.39	1.10

Depreciation and amortisation

Depreciation and amortisation increased from 34.08 crore in FY23 (7.01% of income from operations) to 39.11 crore in FY24 (7.46% of income from operations).

Profit before tax (PBT)

In FY24, PBT was 98.22 crore ( 81.07 crore in FY23). As a percentage of income from operations, PBT was at 18.74% in FY24 (16.67% in FY23).

Tax expense

The applicable tax rate for the Company is 25.17% and tax provision for the current year was 27.08 crore ( 24.10 crore in FY23).

Profit for the year (PAT)

The net profit in FY24 was 71.14 crore (13.58% of income from operations) as compared to 56.97 crore (11.71% of income from operations) in FY23.

FINANCIAL POSITION - STANDALONE

Share capital

	March 31,2024		March 31,2023
Rs In crore	Number of shares	Amount	Number of shares	Amount
(a) Authorised Equity shares of 10 each with equal voting rights	10,00,00,000	100.00	10,00,00,000	100.00
(b) Issued, subscribed and paid-up Equity shares of 10 each with equal voting rights	5,29,52,676	52.95	5,29,30,043	52.93
	5,29,52,676	52.95	5,29,30,043	52.93

The Company has a single class of equity shares of par value of 10/- each. The authorised share capital stood at 100.00 crore, divided into 10 crore equity shares of 10/- each. The issued, subscribed and paid up capital stood at 52.95 crore as at March 31, 2024. During the current fiscal, the Company has issued equity shares to eligible employees on conversion of stock options granted to employees.

The Company has issued share options plan for its employees, the details of the options granted as at March 31, 2024 are provided under the notes to the Standalone Financial Statement in the Annual Report.

Reserves and surplus

Reserves and surplus as at March 31, 2024 were 460.86 crore ( 468.11 crore as at March 31, 2023).

Capital reserve

Capital reserve as at March 31, 2024 amounted to 30.25 crore ( 30.25 crore as at March 31, 2023). Capital Reserve represents a) amounts received in earlier years from the selling shareholder at the time of the IPO towards reimbursement of certain expenses and b) fair value of the trademark "Whaters" (subsequently disposed of) assigned by Dr A Velumani (former promoter) in favour of the Company for no consideration.

Securities premium account

Securities premium as at March 31,2024 amounted to 74.26 crore ( 72.66 crore as at March 31,2023) after adjustment on account of transfer of accumulated balance in stock option premium after exercise of stock options and adjustment towards equity shares bought back at premium. Securities premium represents the premium received on issue of shares.

Share option outstanding account

The Company has established various equity-settled share- based payment plans for certain categories of employees of the Company. The balance in the share option outstanding account represents the expenses recorded pursuant to the aforesaid schemes for which the options are not yet vested or exercised.

The balance as at March 31, 2024 was 4.30 crore (As at March 31, 2023 it was 4.51 crore), after adjustment on account of transfer of accumulated balance in stock option premium after exercise of stock options.

General reserve

General reserve as at March 31, 2024 were 9.17 crore, which was the same as per the previous year.

Capital redemption reserve

The Company bought back 9,58,900 equity shares for an aggregate amount of 63.00 crore being 1.78% of the total paid up equity share capital, at an average price of 656.90 per equity share, during FY19. The equity shares bought back were extinguished on October 12, 2018 and October 22, 2018 and as per the provisions of the Companies Act, 2013, the Capital redemption reserve is used to record the reduction of the share capital of the Company on account of equity shares bought back out of the accumulated profits. It is created in accordance with the provisions of the Companies Act, 2013.

Surplus in the statement of profit and loss account

Balance in the statement of profit and loss as at March 31, 2024 was 307.74 crore ( 331.64 crore as at March 31, 2023) after appropriation towards dividend on equity shares.

Non-current liabilities

	Financial liabilities		Provisions		Total
Rs In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial liabilities
Lease liabilities	11.72	14.46	-	-	11.72	14.46
Borrowings	10.91	-	-	-	10.91	-
Others	-	-	-	-	-	-
	22.63	14.46	-	-	22.63	14.46
	Financial liabilities		Provisions		Total
In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Other than financial liabilities
Provision for employee benefits:
Provision for compensated absences	-	-	-	-	-	-
Provision for gratuity	-	-	2.87	3.17	2.87	3.17
	-	-	2.87	3.17	2.87	3.17
Total non-current liabilities	22.63	14.46	2.87	3.17	25.50	1763

Total non-current liabilities - lease liability decreased to 11.72 crore as at March 31, 2024 ( 14.46 crore as at March 31, 2023), with recognition of portion of long-term lease liability as current liabilities

Current liabilities

	Trade payables		Financial liabilities		Provisions		Others		Total
Rs In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial liabilities
Trade payables	35.95	22.14	-	-	-	-	-	-	35.95	22.14
Lease liabilities	-	-	7.33	6.71	-	-	-	-	7.33	6.71
Security deposits received	-	-	16.38	14.73	-	-	-	-	16.38	14.73
Employees dues	-	-	0.62	0.98	-	-	-	-	0.62	0.98
Unclaimed dividend	-	-	0.15	0.16	-	-	-	-	0.15	0.16
Creditors for capital goods	-	-	0.01	6.82	-	-	-	-	0.01	6.82
Borrowing	-	-	8.86	-	-	-	-	-	8.86	-
Interest accrued but not due on borrowing	-	-	0.07	-	-	-	-	-	0.07	-
	35.95	22.14	33.42	29.40	-	-	-	-	69.37	51.54
Other than financial liabilities
Provision for employee benefits:
Provision for CSR spend	-	-	-	-	-	1.36	-		-	1.36
Provision for compensated absences	-	-	-	-	2.58	2.02	-	-	2.58	2.02
Provision for gratuity	-	-	-	-	0.18	0.59	-	-	0.18	0.59
Current tax liabilities (net)	-	-	-	-	-	-	1.29	10.04	1.29	10.04
Contract liabilities	-	-	-	-	-	-	6.10	6.03	6.10	6.03
Statutory dues	-	-	-	-	-	-	1.45	1.62	1.45	1.62
	-	-	-	-	2.76	3.97	8.84	17.69	11.60	21.66
Total current liabilities	35.95	22.14	33.42	29.40	2.76	3.97	8.84	17.69	80.97	73.19

Total current liabilities increased to 80.97 crore as at March 31, 2024 ( 73.19 crore as at March 31, 2023). The deviation was mainly on account of -

• Increase in expenses/dues outstanding and payable as at the end of the financial year

• Decrease in payable to creditors for capital goods

• Increase in recognition of lease liabilities for the long-term arrangements entered into this year

• Decrease in current tax liabilities

• Decrease in employee benefit dues

• Addition in borrowings

Property, plant and equipment, capital work-in-progress and investment property

The additions to gross block in FY24 were:

• Plant and equipment 16.36 crore ( 29.56 crore in FY23)

• Furniture and fixtures 10.42 crore ( 4.13 crore in FY23)

• Office equipment 6.90 crore ( 1.95 crore in FY23)

• Computer, printer and scanner 3.44 crore ( 1.39 crore in FY23)

The capital work-in-progress on account of tangible assets was 0.76 crore as at March 31, 2024 ( 0.82 crore as at March 31, 2023).

Investment in associate

The Company owns 30% stake in Equinox Labs Private Limited (‘Equinox) for a total purchase consideration of 20 crore. The equity shareholding in Equinox is disclosed under Investment in associate as at March 31,2024.

Investment in Joint Venture

The Company own 50% stake in Thyrocare Laboratories (Tanzania) Limited for a total purchase consideration of 3.13 crore. The equity shareholding in Thyrocare Laboratories (Tanzania) Limited is disclosed under Investment in Joint Venture as at March 31, 2024.

Non-current assets

	Investments		Loans		Others		Total
Rs In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial assets
Investment in subsidiary	153.07	152.74	-	-	-	-	153.07	152.74
Loans to subsidiary	-	-	-	-	-	-	-	-
Security deposits	-	-	4.47	5.01	-	-	4.47	5.01
Bank balance in deposit accounts	-	-	-	-	0.19	0.19	0.19	0.19
Receivables for sub-leases	-	-	-	-	0.27	0.92	0.27	0.92
	153.07	152.74	4.47	5.01	0.46	1.11	158.00	158.86
Other than financial assets
Deferred tax assets	-	-	-	-	24.17	21.30	24.17	21.30
Other tax assets	-	-	-	-	5.58	17.36	5.58	17.36
Capital advances	-	-	-	-	2.34	0.09	2.34	0.09
Prepaid expenses	-	-	-	-	0.83	0.87	0.83	0.87
Balance with government authorities	-	-	-	-	0.52	0.52	0.52	0.52
	-	-	-	-	33.44	40.15	33.44	40.15
Total non-current assets	153.07	152.74	4.47	5.01	33.90	41.26	191.44	199.01

Investment in subsidiaries

The Company assessed the recoverable amount of investment in the wholly-owned subsidiary Nueclear Healthcare Limited, as at March 31,2024, as the higher of Fair Value less Cost of Disposal (the ‘FVCOD) and the Value in Use (the ‘VIU), in view of the accumulated business losses since inception and also considering the changes in the market conditions and business environment in India.

In FY23, the company entered 51% profit sharing partnership in Pulse Hitech Health Services (Ghatkopar) LLP for a total purchase consideration of 2.55 crore. The same is disclosed as investment in subsidiaries as at March 31, 2024.

In FY24, Thyrocare also had entered into a Share Purchase Agreement with Think Health Diagnostic Private Limited ("Think Health Care") and their existing shareholders to acquire 100% stake in Think Health Care by way of purchase of equity shares from all the existing shareholders of Think Health Care for a total purchase consideration of 0.32 crore. The same is disclosed as investment in subsidiaries as at March 31, 2024.

Current assets

	Investments		Inventories		Trade receivables		Loans		Cash and bank balance		Others		Total
Rs In crore	As at 31.03. 2024	As at 31.03. 2023	As at 31.03. 2024	As at 31.03. 2023	As at 31.03. 2024	As at 31.03. 2023	As at 31.03. 2024	As at 31.03. 2023	As at 31.03. 2024	As at 31.03. 2023	As at 31.03. 2024	As at 31.03. 2023	As at 31.03. 2024	As at 31.03. 2023
Financial assets
Investments in Mutual Funds & NCDs (Quoted & measured at FVTPL)	115.26	101.19											115.26	101.19
Inventories	-	-	45.69	27.05	-	-	-	-	-	-	-	-	45.69	27.05
Trade receivables	-	-	-	-	40.20	83.31	-	-	-	-	-	-	40.20	83.31
Cash and bank balance	-	-	-	-	-	-	-	-	3.56	12.37	-	-	3.56	12.37
Other bank balances	-	-	-	-	-	-	-	-	30.54	4.02	-	-	30.54	4.02
Security deposits	-	-	-	-	-	-	1.89	3.09	-	-	-	-	1.89	3.09
Loans and advances to employees	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Receivables for sub-leases	-	-	-	-	-	-	-	-	-	-	0.52	0.40	0.52	0.40
Interest accrued on deposits	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Other receivables towards sale of capital assets	-	-	-	-	-	-	-	-	-	-	-	-	-	-
	115.26	101.19	45.69	27.05	40.20	83.31	1.89	3.09	34.10	16.39	0.52	0.40	237.66	231.43
Other than financial assets
Advances for supply of goods and services	-	-	-	-	-	-	-	-	-	-	5.31	1.40	5.31	1.40
Prepaid expenses	-	-	-	-	-	-	-	-	-	-	2.68	2.54	2.68	2.54
	-	-	-	-	-	-	-	-	-	-	7.99	3.94	7.99	3.94
Total current assets	115.26	101.19	45.69	27.05	40.20	83.31	1.89	3.09	34.10	16.39	8.51	4.34	245.65	235.37

Inventories

Inventories as a percentage of income from operations were at 8.72% as at March 31, 2024 compared to 5.56% as at March 31, 2023. Inventories comprises reagents, diagnostic material, consumables and stock in trade.

Trade receivables

Trade receivables as a percentage of income from operations were at 7.67% as at March 31, 2024 compared to 17.13% as at March 31, 2023. Total provision provided in books for credit impairment was 22.65 crore in FY24 ( 21.41 crore in FY23). Trade receivables as at March 31, 2024 amounted to 40.20 crore (net off impairment).

Cash and bank balances

Cash and bank balances were 34.10 crore as at March 31, 2024 ( 16.39 crore as at March 31, 2023).

CASH FLOW - STANDALONE

Thyrocare business generates cash from operations every year that is sufficient to manage the working capital and capital expenditure requirements. As per the dividend policy, the net cash surplus after providing for tax, capital expenditure expected to be incurred during the next financial year, and any other anticipated requirement of funds, the surplus cash may be distributed among the shareholders as dividend for the financial year concerned.

Summary of cash flow statement is given below

Rs In crore	FY24	FY23
Net cash flows from / (used in) :
Operating activities	155.19	120.02
Investing activities	(80.29)	(31.65)
Financing activities	(83.71)	(87.50)
Net (Decrease)/ Increase in Cash and cash equivalents	(8.81)	0.87

Cash flow from operating activities

Rs In crore	FY24	FY23
Operating profit before working capital changes	161.99	144.47
Adjustment for increase in working capital	22.20	4.25
Net income tax paid	(28.99)	(28.70)
Net cash flows from operating activities	155.19	120.02

In FY24, Thyrocare generated net cash of 155.19 crore ( 120.02 crore in FY23) from operating activities. This is attributable to:

• Increase in operating profit before working capital changes to 161.99 crore in FY24 ( 144.47 crore in FY23)

• Increase in cash flow from working capital to the extent of 22.20 crore in FY24 (increase of 4.25 crore in FY23)

• Payment of taxes of 28.99 crore in FY24 ( 28.70 crore in FY23)

Cash flows from investing activities

Rs In crore	FY24 B	FY23
Property, plant and equipment, additions to capital work in progress and capital advances (net)	(43.27)	(21.12)
Proceeds from sale of property, plant and equipment	1.60	0.10
Purchase of equity shares in associates	-	-
Investment in joint venture	(3.46)	-
Proceeds from sale of business undertaking	-	-
Proceeds from liquidation of non-current investments	-	-
Current investments (net)	(9.71)	(8.41)
Dividend received	-	-
(Investment in subsidary) / Repayment of loans by subsidiary	-	(2.55)
Lease payments received from sub-leases	-	-
Bank deposits	(26.43)	(0.26)
Interest received/paid (net)	0.98	0.59
Net cash (used in) investing activities	(80.29)	(31.65)

In FY24, cash used in investing activities was 80.29 crore ( 31.65 crore in FY23).

During FY24, cash used in investing activities was primarily attributable to:

• Purchase of property, plant and equipment (net) 43.27 crore in FY24 ( 21.12 crore in FY23)

• Investment in Joint Venture (50:50 JV) and Think Health for 3.46 crore (Investment in subsidiary for 2.55 crore in FY23)

• Net investments of current investment to the tune of 9.71 crore (Additional (net) current investment of 8.41 crore in FY23)

• Investments in bank deposits during the year for 26.43 crore ( 0.26 crore in FY23)

Cash flows from financing activities

Rs In crore	FY24	FY23
Proceeds from issue of equity shares	0.02	0.03
Share issue expenses	-	-
Unsecured loans from related party	-	-
Payment towards lease liabilities	(6.54)	(8.18)
Dividend paid on equity shares	(95.27)	(79.35)
Interest paid	(1.68)	-
Proceeds towards contribution from non-controlling shareholders in subsidiary	-	-
Proceeds from borrowings	26.78	-
Repayment of borrowings	(7.02)	-
Net cash (used in) financing activities	(83.71)	(87.50)

The payment of dividend in FY24 was 95.27 crore ( 79.35 crore in FY23).

II. Consolidated Financial Performance

The Consolidated Financial Statements relate to Thyrocare Technologies Limited (‘the Company), its subsidiary companies, Nueclear Healthcare Limited (wholly-owned subsidiary), in which the Company has 100% equity holding as on March 31,2024 (100%: March 31,2023), Pulse Hitech Health Services (Ghatkopar) LLP (‘Subsidiary), in which the company has 51% stake as on March 31, 2024 (51% : March 31, 2023), Thyrocare Laboratories (Tanzania) Limited (‘Joint venture), in which the company has 50% stake as on March 31,2024 (Nil% : March 31, 2023) & Think Health Diagnostics Private Limited (wholly-owned subsidiary), in which the company has 100% stake as on March 31,2024 (Nil% : March 31, 2023) (hereinafter referred to as the "Group").

These consolidated Ind AS financial statements (hereinafter referred to as ‘consolidated financial statements) have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015, notified under Section 133 of Companies Act, 2013, (the ‘Act) and other relevant provisions of the Act.

Summary

Revenue from operations of the Group aggregated to 571.88 crore in FY24 as compared to 526.67 crore in FY23, registering a growth of 8.58%.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) of Group aggregated to 137.43 crore in FY24 as compared to 120.05 crore in FY23, registering a growth of 14.48%. The normalised EBITDA after adjusting for provision for bad and doubtful debts and ESOPs costs was 161.80 crore as compared to 150.50 crore in FY23.

Profit after tax and after exceptional items (PAT) of the

Group aggregated to 69.49 crore in FY24 as compared to 64.36 crore in FY23.

Total Assets of Group after netting off liabilities aggregated to 527.63 crore in FY24 as compared to 535.22 crore in FY23.

The following table provides the details of the consolidated financial performance of Group -

	FY24			FY23
Particulars (Rs In crore)		% of Income	% growth compared to FY23		% of Income	% growth compared to FY22
Income from Operations	571.88	100.00	8.58	526.67	100.00	(10.56)
Expenses
Cost of Materials consumed/traded	166.70	29.15	2.13	163.23	30.99	(3.81)
Employee benefits expense	107.86	18.86	1.61	106.15	20.15	73.65
Other expenses	159.89	27.96	16.51	137.24	26.06	11.44
Total Expenses	434.45	75.97	6.84	406.62	7721	14.87
Earnings before interest, tax, depreciation and amortisation (EBITDA)	137.43	24.03	14.48	120.05	22.79	(48.89)
Other income (net) excluding dividend & income from current investments	3.58	0.63	17.38	3.05	0.58	(87.31)
Dividend & income from current investments	5.79	1.01	7.82	5.37	1.02	2.87
Interest and depreciation & amortisation expense	51.21	8.95	24.71	41.06	7.80	13.31
Profit before exceptional item and tax	95.59	16.72	9.36	87.41	16.60	(61.65)
Share of profit in associate entity	0.39	0.07	(67.04)	1.18	0.22	(756.67)
Profit before tax (PBT)	95.98	16.78	8.34	88.59	16.82	(61.10)
Tax expense	26.49	4.63	9.31	24.23	4.60	(53.03)
Profit for the year (PAT)	69.49	12.15	797	64.36	12.22	(63.46)

Revenue from operations

Revenue from operations Increased from 526.67 crore in FY23 to 571.88 crore in FY24, registering a growth of 8.58%.

The Consolidated Revenue from operations primarily comprised income from diagnostic services, income from imaging services primarily 18F-FDG (Fluoro Deoxy Glucose) whole body PET-CT imaging service, sale of consumables for diagnostic services, trading of point of care testing devices and sale of excess radioactive bio-marker FDG required for PET-CT scanning.

Expenses

Cost of material consumed

	FY24			FY23
Rs In crore		% of income from operations	% growth compared to FY23		% of income from operations	% growth compared to FY22
Cost of materials consumed
Opening stock	26.65			23.31
Add: Adjustment on account of change in a/c policy	-			-
Purchases	184.09			160.26
	210.74			183.57
Less: Closing stock	46.23			26.65
Cost of material consumed [A]	164.51	28.77	4.83	156.92	29.80	(5.61)
Material consumed comprises:
Reagents/Diagnostics material	144.22	25.22	4.53	137.97	26.20	7.62
Radiopharmaceuticals	3.09	0.54	31.49	2.35	0.45	(47.31)
Consumables	17.20	3.01	3.61	16.60	3.15	(50.58)
	164.51	28.77	4.84	156.92	29.79	(5.61)

The Cost of material consumed increased from 156.92 crore in FY23 to 164.51 crore in FY24, the cost of material consumed to revenue from operations was 28.77% (29.79% in FY23).

The cost of material consumed primarily comprised (a) reagents for diagnostic testing and consumables used for processing, (b) Consumable for laboratory, (c) Consumption for FDG and consumables used for imaging centres such as contrast, films etc.

The % cost of material consumed to diagnostic services has increased during the year mainly on account of increased sales in FY24 vs last year and due to slight Rupee depreciation against the US Dollar.

Cost of material traded

	FY24			FY23
Rs In crore		% of income from traded goods	% growth compared to FY23		% of income from traded goods	% growth compared to FY22
Purchase of stock-in-trade
Point of care testing devices and strips	2.47			6.11
	2.47			6.11
Changes in inventories of stock-in-trade
Inventories at the end of the year:
Point of care testing devices and strips	1.30			1.02
	1.30			1.02
Inventories at the beginning of the year:
Point of care testing devices and strips	1.02			1.22
	1.02			1.22
Net change	(0.28)			0.20
Cost of material traded [B]	2.19	21.46	(65.23)	6.30	59.36	83.14

The discussions about the cost of material traded is already included under the discussion on standalone financial statement of Thyrocare.

Cost of Materials consumed/traded

	FY24			FY23
In crore		% of income from operations	% growth compared to FY23		% of income from operations	% growth compared to FY22
Cost of Materials consumed/traded [A]+[B]	166.70	29.15	2.13	163.23	30.99	(3.81)

The overall Cost of material consumed/traded thus has Increased from 163.23 crore in FY23 to 166.70 crore in FY24, the cost of material consumed/traded to income from operations was 29.15% (30.99% in FY23).

Employee benefits expense

	FY24		FY23
In crore	% of income from operations		% of income from operations
Salaries, wages and bonus	79.47	13.90	75.17	14.27
Contributions to provident and other funds	4.77	0.83	5.05	0.96
Employees stock compensation expense	16.67	2.91	21.17	4.02
Gratuity	1.01	0.18	1.79	0.34
Compensated absences	2.14	0.37	0.98	0.19
Staff welfare expenses	3.80	0.66	1.99	0.38
	10786	18.86	106.15	20.15

Total employee benefits expenses were 107.86 crore in FY24, increased from 106.15 crore in FY23. The employee benefits expenses as percentage of income from operations were 18.86% in FY24 (20.15% in FY23).

Employee benefit expenses increased Y-o-Y on account of additions in Senior Leadership, additions in the growth team to sustain growth and investments in quality personnel to fulfil NABL requirements over and above the average salary increments for employees of about 10% p.a.. Additionally, variable pay was introduced to the employees across the organisation for fostering performance-oriented appraisals for their contribution.

ESOP cost is recognised as share-based payment in the P&L and appropriately recognised in the balance sheet as Equity contribution from the parent.

Note: Total value of the ESOPs granted from parent group are 45.53 crore over a 6-year period (Year 1 - 39.7%, Year 2 - 31.4%, Year 3 - 16.2%, Year 4 - 9.0%, Year 5 - 3.5%, Year 6 - 0.2%)

Other expenses

	FY24		FY23
In crore	% of income from operations		% of income from operations
Healthcare service operation cost	33.73	5.90	39.21	7.44
Rent	4.15	0.73	5.61	1.07
Sales incentive	13.75	2.40	12.75	2.42
Legal and professional fees	25.57	4.47	16.93	3.21
Power and fuel and water	10.15	1.77	10.70	2.03
Advertisement expenses	-	-	-	-
Business promotion	16.74	2.93	6.44	1.22
Postage and courier	3.47	0.61	3.48	0.66
Printing and stationery	1.99	0.35	2.60	0.49
Repairs and maintenance	18.32	3.20	12.73	2.42
Others	32.02	5.60	26.79	5.09
	159.89	2796	137.24	26.06

Other expenses as percentage of revenue had marginally increased from 26.06% in FY23 to 27.96% in FY24.

Earnings before interest, tax, depreciation, and amortisation (EBITDA)

In FY24, EBITDA was 137.43 crore (24.03% of income from operations) as compared to 120.05 crore (22.79% of income from operations) in FY23. The normalised EBITDA after adjusting for provision for bad and doubtful debts and ESOPs costs was 161.80 crore as compared to 150.50 crore in FY23.

Other income (net)

Rs In crore	FY24		FY23
	% of Income		% of Income
Net gain on investments	5.77	0.99	5.37	1.00
Interest income	2.71	0.47	1.38	0.26
Others	0.89	0.15	1.67	0.31
	9.37	1.61	8.42	1.57

Depreciation and amortisation

Depreciation and amortisation was 47.01 crore in FY24 (8.22% of income from operations) compared to 38.71 crore in FY22 (7.35% of income from operations).

Profit before tax (PBT)

In FY24, PBT was 95.98 crore ( 88.59 crore in FY23).

Tax expense

Tax expenses were at 26.49 crore in FY24 compared to 24.23 crore in FY23.

Profit for the year (PAT)

The net profit in FY24 was 69.49 crore (12.15% of income from operations) as compared to 64.36 crore (12.22% of income from operations) in FY23.

FINANCIAL POSITION - CONSOLIDATED

Share capital

	March 31,2024		March 31, 2023
Rs In crore	Number of shares	Amount	Number of shares	Amount
a) Authorised Equity shares of 10 each with equal voting rights	10,00,00,000	100.00	10,00,00,000	100.00
b) Issued, subscribed and paid-up Equity shares of 10 each with equal voting rights	5,29,52,676	52.95	5,29,30,043	52.93
	5,29,52,676	52.95	5,29,30,043	52.93

The Group has a single class of equity shares of par value of 10/- each. The authorised share capital of the Company stood at 100.00 crore, divided into 10 crore equity shares of 10/- each. The issued, subscribed and paid-up capital stood at 52.95 crore as at March 31, 2024.

The Group has disclosed the issued, subscribed to and paid-up capital net-off the equity shares held by the Employees Stock Option Trust. The Group has also issued shares on exercising of options by employees.

Reserves and surplus

Reserves and surplus as at March 31, 2024 were 473.82 crore ( 481.37 crore as at March 31, 2023).

Capital reserve

Capital Reserve represents a) amounts received in earlier years from the selling shareholder at the time of the IPO towards reimbursement of certain expenses and b) fair value of the trademark "Whaters" (subsequently disposed of) assigned by Dr A Velumani (former promoter) in favour of the Company for no consideration. Capital reserve as at March 31, 2024 amounted to 31.71 crore.

Securities premium account

Securities premium represents the premium received on issue of shares. Securities premium as at March 31,2024 amounted to 74.26 crore.

Share option outstanding account

The Group has established various equity-settled share-based payment plans for certain categories of employees of the Group. The balance in the share option outstanding account represents the expenses recorded pursuant to the aforesaid schemes for which the options are not yet vested or exercised.

The balance as at March 31,2024 was 4.32 crore (As at March 31,2023 it was 4.53 crore), after adjustment on account of transfer of accumulated balance in stock option premium after exercise of stock options.

General reserve

General reserve is used to record the transfer from retained earnings of the company. It is utilised in accordance with the provisions of the Companies Act, 2013. General reserve as at March 31, 2024 were 9.17 crore, which was the same as per the previous year.

Surplus in the statement of profit and loss account

Balance in the statement of profit and loss as at March 31,2024 was 319.19 crore ( 343.42 crore as at March 31,2023) after appropriation towards dividend on equity shares and tax on dividend.

Non-current liabilities

	Financial liabilities		Provisions		Total
In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial liabilities
Borrowings	10.91	-	-	-	10.91	-
Lease liabilities	11.80	16.12	-	-	11.80	16.12
	22.71	16.12	-	-	22.71	16.12
Other than financial liabilities
Provision for employee benefits:
Provision for compensated absences	-	-	0.09	-	-	-
Provision for gratuity	-	-	2.97	3.30	3.06	3.30
	-	-	3.06	3.30	3.06	3.30
Total non-current liabilities	22.71	16.12	3.06	3.30	25.77	19.42

Total non-current liabilities increased to 25.77 crore as at March 31,2024 ( 19.42 crore as at March 31,2023), with recognition of long-term lease liability on account of new arrangement entered into in the current financial year.

Current liabilities

	Trade payables		Financial liabilities		Provisions		Others		Total
Rs In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial liabilities
Trade payables	40.11	23.99	-	-	-	-	-	-	40.11	23.99
Borrowings	-	-	10.69	-	-	-	-	-	10.69	-
Lease liabilities	-	-	8.94	7.19	-	-	-	-	8.94	7.19
Security deposits received	-	-	15.50	15.58	-	-	-	-	15.50	15.58
Employees dues	-	-	1.20	1.02	-	-	-	-	1.20	1.02
Unclaimed dividend	-	-	0.01	0.16	-	-	-	-	0.01	0.16
Creditors for capital goods	-	-	0.27	7.17	-	-	-	-	0.27	7.17
Expenses payable - Others	-	-	0.34	-	-	-	-	-	0.34	-
Other provisions	-	-	0.09	-	-	-	-	-	0.09	-
Interest accrued on borrowings	-	-	0.07	-	-	-	-	-	0.07	-
	40.11	23.99	37.11	31.12	-	-	-	-	77.22	55.11

 

	Trade payables		Financial liabilities		Provisions		Others		Total
Rs In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Other than financial liabilities
Provision for employee benefits:
Provision for CSR spending	-	-	-	-	-	1.36	-	-	-	1.36
Provision for compensated absences	-	-	-	-	2.60	2.09	-	-	2.60	2.09
Provision for gratuity	-	-	-	-	0.21	0.59	-	-	0.22	0.59
Current tax liabilities (net)	-	-	-	-	-	-	1.29	10.04	1.29	10.04
Contract liabilities	-	-	-	-	-	-	6.16	6.08	6.16	6.08
Advance received towards consideration for sale of capital assets held for sale
Other payable - group companies	-	-	-	-	-	-	0.36	-	0.36	-
Other payables	-	-	-	-	-	-	0.20	-	0.20	-
Statutory dues	-	-	-	-	-	-	2.44	1.83	2.44	1.83
	-	-	-	-	2.81	4.04	10.45	17.95	13.26	21.99
Total current liabilities	40.11	23.99	37.11	31.12	2.81	4.04	10.45	17.95	90.48	77.10

Total current liabilities increased to 90.48 crore as at March 31, 2024 ( 77.10 crore as at March 31, 2023).

The deviation was mainly on account of -

• Increase in trade payables and outstanding

• Decrease in creditors for capital goods

• Slight decrease in the security deposits paid to parties for surety against short-term contracts

• Increase in advances received from customers against which services were provided in the next fiscal

• Decrease in current tax liabilities of FY24

• Addition in borrowing during the year

Property, plant and equipment, capital work-in-progress and investment property

The additions to gross block in FY24 were:

• Plant and equipment 27.01 crore ( 32.19 crore in FY23)

• Furniture and fixtures 12.19 crore ( 4.28 crore in FY23)

• Office equipment 7.57 crore ( 2.39 crore in FY23)

• Computer, printer and scanner 3.55 crore ( 1.39 crore in FY23)

The capital work-in-progress on account of tangible assets was 2.55 crore as at March 31, 2024 ( 1.61 crore as at March 31, 2023).

Investment in associate

The Company owns 30% stake in Equinox Labs Private Limited (‘Equinox) for a total purchase consideration of 20 crore. The equity shareholding in Equinox is disclosed under Investment in associate as at March 31,2024.

Investment in Joint Venture

The Company own 50% stake in Thyrocare Laboratories (Tanzania) Limited for a total purchase consideration of 3.13 crore. The equity shareholding in Thyrocare Laboratories (Tanzania) Limited is disclosed under Investment in Joint Venture as at March 31, 2024.

Non-current assets

	Loans		Others		Total
In crore	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial assets
Security deposits	5.01	6.08	-	-	5.01	6.08
Bank balance in deposit accounts	-	-	0.21	0.21	0.21	0.21
	5.01	6.08	0.21	0.21	5.22	6.29
Other than financial assets
Deferred tax assets	-	-	14.82	12.27	14.82	12.27
Other tax assets	-	-	7.58	18.55	7.58	18.55
Capital advances	-	-	2.34	3.69	2.34	3.69
Prepaid expenses	-	-	0.84	0.86	0.83	0.86
Balance with government authorities	-	-	0.52	0.52	0.52	0.52
Advances for supply of goods	-	-	-	-	-	-
	-	-	26.10	35.89	26.10	35.89
Total non-current assets	5.01	6.08	26.31	36.10	31.31	42.18

Current assets

Rs In crore	Investments		Inventories		Trade receivables		Cash and bank balance		Others		Total
	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023	As at 31.03.2024	As at 31.03.2023
Financial assets
Investments in Mutual Funds &	136.75	122.30	-	-	-	-	-	-	-	-	136.75	122.30
NCDs (Quoted & measured at
FVTPL)
Inventories	-	-	47.52	27.67	-	-	-	-	-	-	47.52	27.67
Trade receivables	-	-	-	-	43.47	85.12	-	-	-	-	43.47	85.12
Cash and bank balance	-	-	-	-	-	-	9.30	17.77	-	-	9.30	17.77
Other bank balances	-	-	-	-	-	-	30.59	10.70	-	-	30.59	10.70
Security deposits	-	-	-	-	-	-	-	-	2.63	3.51	2.62	3.51
Loans and advances to employees	-	-	-	-	-	-	-	-	-	-	-	-
Other receivables	-	-	-	-	-	-	-	-	0.69	0.35	0.69	0.35
Interest accrued on deposits	-	-	-	-	-	-	-	-	-	0.20	-	0.20
	136.75	122.30	47.52	27.67	43.47	85.12	39.90	28.47	3.31	4.05	270.95	267.60
Other than financial assets
Advances for supply of goods and services	-	-	-	-	-	-	-	-	4.81	2.56	4.81	2.56
Balance with government authorities	-	-	-	-	-	-	-	-	0.05	0.20	0.05	0.20
Prepaid expenses	-	-	-	-	-	-	-	-	2.70	2.56	2.70	2.56
	-	-	-	-	-	-	-	-	7.56	5.32	7.56	5.32
Total current assets	136.75	122.30	47.52	27.67	43.47	85.12	39.90	28.47	10.87	9.37	278.51	272.92

Inventories

Inventories as a percentage of income from operations were at 4.84% as at March 31,2024 compared to 5.25% as at March 31, 2023. Inventories comprises reagents, diagnostic material, consumables and stock in trade.

Trade receivables

Trade receivables as a percentage of income from operations were at 7.60% as at March 31, 2024 compared to 16.16% as at March 31,2023.

CASH FLOW - CONSOLIDATED

The Group business generates cash from operations every year that is sufficient to manage the working capital and capital expenditure requirements. The Group has not availed any credit/overdraft facility from any of the banks since its inception.

Summary of cash flow statement is given below

Rs In crore	FY24	FY23
Net cash flows from / (used in) :
Operating activities	167.63	129.31
Investing activities	(91.28)	(38.99)
Financing activities	(84.81)	(86.18)
Net (Decrease)/ Increase in Cash and cash equivalents	(8.48)	4.14
Cash flow from operating activities
Rs In crore	FY24	FY23
Operating profit before working capital changes	166.46	151.98
Adjustment for increase in working capital	30.16	5.79
Net income tax paid	(28.99)	(28.46)
Net cash flows from operating activities	167.63	129.31

In FY24, the Group generated net cash of 167.63 crore ( 129.31 crore in FY23) from operating activities.

Cash flows from investing activities

Rs In crore	FY24	FY23
Property, plant and equipment, additions to capital work in progress and capital advances (net)	(61.58)	(43.65)
Proceeds from sale of property, plant and equipment	0.72	2.10
Purchase of equity shares in associates	-	-
Investment in joint venture	(3.52)	-
Proceeds from sale of business undertaking	-	-
Proceeds from liquidation of non-current investments	-	-
Current investments (net)	(7.99)	8.45
Dividend received	-	-
(Investment in subsidary) / Repayment of loans by subsidiary	-	-
Lease payments received from sub-leases	-	-
Bank deposits	(19.89)	(7.19)
Interest received/paid (net)	0.98	1.30
Net cash (used in) investing activities	(91.28)	(38.99)

In FY24, cash used in investing activities was 91.28 crore ( 38.99 crore in FY23). During FY24, cash used in investing activities was primarily attributable to:

• Purchase of property, plant and equipment (net) 61.58 crore ( 43.65 crore in FY23)

• Sale of current investment of 7.99 crore

• Investments in Bank deposits for 19.89 crore ( 7.19 crore in FY23)

Cash flows from financing activities

Rs In crore	FY24	FY23
Proceeds from issue of equity shares	0.02	0.03
Share issue expenses	-	-
Unsecured loans from related party	-	-
Payment towards lease liabilities	(8.16)	(7.78)
Dividend paid on equity shares	(95.27)	(79.35)
Interest paid	(4.20)	-
Proceeds towards contribution from non-controlling shareholders in subsidiary	1.21	0.92
Proceeds from borrowings	28.62	-
Repayment of borrowings	(7.03)	-
Net cash (used in) financing activities	(84.81)	(86.18)

The payment of dividend in FY24 was 95.27 crore ( 79.35 crore in FY23).

III. Segment performance

The Group has identified business segments as its primary segment. Revenue and expenses directly attributable to segments are reported under each reportable primary segment. The following table presents a summary of revenue by industry segments.

Rs In crore	Segment revenue (% aggregate revenue)
	FY24	FY23	FY24	FY23	% Growth
Diagnostic Testing Services	522.23	481.22	91.32	91.37	8.52%
Imaging Services	47.60	40.21	8.32	7.63	18.38%
Others	2.05	5.24	0.36	0.99	(60.88%)
	571.88	526.67	100.00	100.00	8.58%

I n FY24, revenue from diagnostic testing services contributed the largest share to revenue (91.32%) at a growth rate of 8.58%.

IV. Related Party Transaction

These have been discussed in detail in the Notes to the Standalone Financial Statements in the Annual Report.

V. Key financial ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirement 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes, if any in key sector-specific financial ratios. Apart from this the Company has also disclosed the ratios as prescribed pursuant to the amendment to Schedule III of the Companies Act, 2013, in the notes to the financial statement.

The Company has identified the following ratios as key financial ratios:

Dorti/iilarc	Standalone		Consolidated
Par uculais	FY24	FY23	FY24	FY23
Revenue growth (%)	7.72	(13.37)	8.58	(10.56)
EBIDTA margin (%)	25.55	23.03	24.03	22.79
Net profit margin (%)	13.58	11.71	12.15	12.22
Price / Earnings (times)	NA	NA	41.78	51.91
Basic EPS (?)	13.44	10.80	13.4 2	12.16
Liquid cash as a % of revenue from operations	28.50	24.17	30.89	28.63
Return on net worth	13.85	10.93	13.17	12.03
Return on capital employed (ROCE) (%) $	18.13%	16.77%	17.89%	14.92%
Market capitalisattion to revenue from operations (?)	NA	NA	5.19	6.34

VI. Outlook, risks and concerns

This section lists forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties associated with respect to, but not limited to, regulatory changes pertaining to the industry in India in which our Company operates and our ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes, our Companys exposure to market risks, general economic and political conditions in India which have an impact on its business activities or investments, the monetary and fiscal policies of India, inflation or deflation, unanticipated turbulence in any or all of interest rates or foreign exchange rates or both, equity prices and other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in the competitive environment.

Certain important factors that could cause actual results to differ materially from our Companys expectations include, but are not limited to, the following -

• operating highly competitive and fragmented industry and our business, financial condition and results of operations may be adversely affected if we are not able to compete effectively

• negative publicity or other harm to our reputation, brand or customer perception of our brand

• disruption in the operations of any of our laboratories or offerings of particular tests

• delay or interruption in transportation of samples to the laboratory and regional processing laboratories and our dependence on hub-and-spoke business model complemented by the regional processing laboratories

• failure to attract and retain authorised service providers

• failure of our equipment, information technology and other technological systems; and

• changes in technologies and/or the introduction of new technology could reduce demand for our pathology testing services

• operational risk associated with molecular imaging business may have an effect on results of operations and financial conditions

• Changing laws, rules, regulations and government policies with reference to our businesses

VII. Internal control systems and their adequacy

The CEO and CFO certification provided in the CEO and CFO certification section of the Annual Report discusses the adequacy of our internal control systems and procedures