Four decades later, that single idea has matured into Aarthi Scans and Labs, a diagnostics chain that operates more than 100 centres across India and handles over 17,000 patient visits daily.
Low-Cost, Scaling Blueprint
Aarthi Scans scaled primarily through internal accruals and controlled costs while maintaining margins by reducing unnecessary expenses in utilities, maintenance and staffing, without compromising quality or equipment standards. “Affordable price does not mean poor quality. Our high patient volumes helped negotiate better deals with equipment suppliers and consumable vendors,” highlights Govindarajan. This has allowed the business to keep prices affordable while sustaining scale. At the base of this cost discipline was Govindarajan’s own upbringing in an agricultural family. He learnt to build conservatively from the beginning. In its early years, the company hired extensively from rural Tamil Nadu and operated with lean structures. “Whatever profit I earned, I put it back into the business,” recalls Govindarajan, Founder and Managing Director, Aarthi Scans and Labs.
The Turning Point
Earlier, Govindarajan was associated with the manufacturing of aluminium caps for pharmaceuticals and liquor bottles. However, one of the biggest turning points came when he realised diagnostics offered a far more scalable framework than hospitals. “A diagnostic centre is a cut-copy-paste model. It can be centrally monitored but that is not possible with a chain of hospitals,” points out Govindarajan. This realisation altered the company’s trajectory. In 2000, Aarthi Scans and Labs launched its first integrated diagnostics centre in Tirunelveli, bringing MRI, CT and ultrasound services under a single roof. Over the next two decades, the model expanded into major metros and regional hubs, including Chennai, Bengaluru, Hyderabad, Mumbai and several northern markets.
Preventive Healthcare
Instead of relying heavily on traditional bank loans for expensive imaging equipment, Aarthi Scans negotiated deferred payments directly with manufacturers, helping the company avoids large interest costs. That repayment discipline helped the company build long-term trust with suppliers, allowing the diagnostics chain to continue expanding without becoming debt-heavy. Today, Aarthi Scans and Labs adds nearly one new centre, every month across India.
To improve productivity across its network of around 300 radiologists and nearly 3500 employees, the company has also invested in AI-assisted reporting systems. “Earlier, one doctor may report 100 cases but now they can report 500,” says Govindarajan. The company has recently entered preventive healthcare and longevity diagnostics through Vital Insights, which offers services such as VO2 max analysis and DEXA testing aimed at premium urban consumers.
Rs 400 crore turnover
As Aarthi Scans and Labs prepares for public markets, Govindarajan points to the present GST structure as a challenge for organised healthcare players. “We are fully GST exempt. But we pay GST for equipment and consumables, and that cannot be claimed,” he explains. Govindarajan argues that the current GST structure places organised diagnostic chains and hospitals at a disadvantage. According to him, large investments in MRI, CT and diagnostic infrastructure continue to attract GST at the procurement stage, but healthcare providers cannot offset those taxes because patient services themselves fall outside the GST framework. He asserts that bringing healthcare under GST, while keeping the effective burden on patients minimal or neutral, could help organised healthcare players reduce operating costs and improve reinvestment capacity.
Despite those hurdles, Govindarajan indicates the company could potentially raise around Rs 1000 crore through its proposed Initial Public Offering. The company expects turnover to cross Rs 400 crore this year and has outlined ambitions of reaching nearly Rs 800 crore by 2030. “Other industries may have ups and downs. But healthcare will continue to grow steadily,” ends Govindarajan.