Thyrocare plans about Rs 141 crore Nueclear sale after decline

Thyrocare Technologies Limited plans to sell its entire Nueclear Healthcare Limited radiology business for about Rs 141 crore after management cited an approximately 9% revenue decline over five quarters, 6.95% return on capital employed and a 2-percentage-point drag on consolidated revenue growth. The transaction still requires shareholder approval and execution of a share-purchase agreement.

Why is Thyrocare selling NHL?

Thyrocare is selling NHL because management said its pathology business offers higher growth, profitability and return on capital employed (ROCE) than the radiology subsidiary. Thyrocare reported ROCE of 34.9%, compared with 6.95% for NHL, whose stand-alone positron emission tomography/computed tomography, or PET/CT, business faces competition from integrated radiology providers.

Management said NHL revenue declined by about 9% during the past five quarters, while Thyrocare stand-alone recorded average growth above 22% over that period. In Q2 FY27, Thyrocare’s pathology business grew 27%, supported by its franchisee and partnership businesses.

NHL also requires substantial equipment investment because much of its equipment is at the end of its life, management said on the October 29, 2026 earnings call. The proposed disposal therefore addresses both the subsidiary’s recent revenue trajectory and the future capital spending needed for its PET/CT network.

What are the terms of Thyrocare’s NHL sale?

Thyrocare has proposed selling its entire holding in NHL to Trovera for aggregate consideration of about Rs 141 crore. The consideration comprises Rs 81.9 crore in cash and Rs 59.5 crore in equity, according to management’s Q2 FY27 call remarks.

Thyrocare’s board approved the proposed disinvestment at its Q1 meeting, and the shareholder-approval process had begun by the October 29 call. The transaction was incomplete at September 30, 2026 because shareholder approval and execution of the share-purchase agreement remained pending.

Trovera is seeking to consolidate India’s fragmented radiology market through acquisitions of doctor-run centres, centralised radiology reporting, shared procurement and back-office operations, management said. Excluding NHL, Trovera had executed definitive binding agreements to acquire 39 radiology centres.

How has NHL affected Thyrocare’s results?

NHL has reduced Thyrocare’s consolidated revenue-growth rate by 2 percentage points and its earnings before interest, tax, depreciation and amortisation, or EBITDA, margin by 1 percentage point, management said. Management also described NHL’s operating profit after tax as low.

The contrast is visible in Q2 FY27 results. Thyrocare reported consolidated revenue of Rs 271 crore, up 25% year on year, while stand-alone revenue was Rs 256 crore, up 26.7%. Consolidated EBITDA margin was 33%, and gross margin rose by more than 190 basis points year on year to 74.2%.

Thyrocare added about 1,180 franchisees in Q2 FY27, taking its active franchisee base to 12,911, and opened five laboratories. Management linked the expanding pathology network to the 27% quarterly pathology growth, compared with NHL’s five-quarter revenue decline.

What accounting impact has Thyrocare recorded before the sale?

Thyrocare recorded a non-cash impairment of Rs 9 crore in its stand-alone accounts and Rs 45 crore in consolidated financial statements after reassessing NHL’s carrying value using the latest valuation and term sheet. Management described both charges as non-recurring, with no effect on operating performance or cash flow.

Thyrocare did not classify NHL as held for sale or as a discontinued operation under Indian Accounting Standard, or Ind AS, 105 in Q2 FY27. Since shareholder approval and the share-purchase agreement were outstanding, NHL continued to be consolidated as a wholly owned subsidiary in the quarter and H1 FY27 financial statements.

Management said NHL’s book value was written down to about Rs 150 crore in both stand-alone and consolidated books in FY20. The stand-alone value remained at about Rs 150 crore, while consolidated carrying value grew with NHL profits from FY20 to FY26, resulting in different impairment amounts in FY27.

Thyrocare reported net cash and equivalents of more than Rs 211 crore and zero debt at September 30, 2026. During H1 FY27, it generated Rs 133 crore from operating activities and invested Rs 30 crore in capital expenditure for laboratory expansion and capacity supporting 27% volume growth.

Where will Thyrocare focus after the NHL exit?

Thyrocare plans to concentrate management attention and investment on pathology, including specialty diagnostics and consumer products. Specialty diagnostics, including allergy and genomics testing, accounted for around 4% of pathology revenue in Q2 FY27 and were commercially live, according to management.

Thyrocare operated 49 laboratories, comprising 48 in India and one in Tanzania, after adding four regional processing laboratories and one hybrid partnership laboratory in Q2 FY27. Its test menu had expanded to more than 1,420 tests, while 96% of samples were processed in National Accreditation Board for Testing and Calibration Laboratories-accredited labs during the quarter.

Thyrocare also launched a pregnancy test kit that produces a result in five minutes and has stated accuracy of 99% when used as directed. The kit has a maximum retail price of 60 rupees and includes a coupon for a Beta human chorionic gonadotropin blood test at 399 rupees rather than 800 rupees; Thyrocare said it was present in more than 10,000 pharmacies.

Conclusion

The proposed sale would remove a radiology subsidiary that management said declined about 9% over five quarters, had ROCE of 6.95% and reduced consolidated growth and EBITDA margin. It would focus Thyrocare on pathology, where Q2 FY27 growth was 27% and the network added five laboratories and about 1,180 franchisees.

The next events are shareholder approval and execution of the share-purchase agreement, both of which were pending at September 30, 2026. Management also expects capital expenditure in the remainder of FY27 to be similar to the Rs 30 crore invested in H1 FY27 for laboratory capacity and business growth.