Leading clinical diagnostics company Thyrocare Technologies is understood to be exploring several options for its radiology business, including the possibility of divesting it, according to multiple sources.
Thyrocare’s radiology business, which carries out imaging diagnostics services such as PET-CT scan, nuclear scanning, ultrasonography and MRI scans, has not been contributing much to the margins or the profitability of the company, though revenue growth is in the mid to high teens.
The radiology business, under its wholly owned subsidiary Nuclear Healthcare, was making losses earlier. Pharmeasy took a couple of years to turn it around after its acquisition of Thyrocare in 2021 through its parent API Holdings. In 2022, it also acquired a 51 per cent stake in a small company engaged in the radiology business called Pulse Hitech Health Services. However, the operating profit of the business is low due to the high maintenance costs for the equipment.
In talks
Sources said it is looking at divesting the business altogether, as making it a significant contributor to the bottomline will involve considerable investments. They added that it was in talks with some companies that had a sizeable presence in the radiology business.
Thyrocare did not respond to emails from businessline seeking clarification on its plans for the radiology business.
Focus on pathology
In the analyst call after announcing the first quarter results for FY25, the management said it would not bank much on the radiology business “becoming a substantial contributor of profits.” The management also made it clear that the company’s focus would be on the more profitable and larger pathology business, which was its core, and there were no plans for any new capex in the radiology business.
In Q1 of FY25 the radiology business contributed over 8 per cent to revenue but only 2.9 per cent to EBITDA.
Industry sources said the diagnostics segment had turned into a buyers’ market and Thyrocare may find it difficult to find buyers. Some of the large radiology-focused diagnostics companies are Vijaya Diagnostics and Krsnaa Diagnostics.