Carving a Different 'Path'

He is a second generation entrepreneur who infused life into Dr Phadke's Lab. Recently, he has sold his stakes to Piramal Healthcare to expand the business further

Dr Avinash Phadke (54) Director & Chief, Pathology Services, Piramal Diagnostic Services Private Limited, Mumbai

Born in 1954 in Mumbai, he did his MD (Pathology) from Tata Memorial Hospital (TMH) and DPB from KEM Hospital, Mumbai. He ranked first and received gold medals in both the examinations.

The first move

After completing his education in 1980, he took charge of a small pathology lab that was started by his father Dr AM Phadke in 1963 in Mumbai. When the junior Dr Phadke took charge, the lab had only eight people and it was focusing on infertility-related tests only.

So, from 1980 to 2000, Dr Phadke introduced specialised cancer tests like fine-needle aspiration cytology test, cancer markers and hormone tests (for thyroid and epilepsy). He introduced more tests like specialised sperm function tests, sperm morphology and also emphasised on full automation of the lab. Many of these tests were introduced for the first time in Mumbai. "This expansion of services was done through loan from banks and internal accruals," says he.

Why an entrepreneur

Though at one point of time, he was practicing as a pathologist at Prince Aly Khan Hospital, he always wanted to focus on growing his propriety business. "Because of the oncology-related diagnosis that I did at TMH, I was determined to introduce cancer-related diagnostic tests in India. Even four years back, we had to send slides to the US for lymphoma. Basically wanted to offer more high-end tests in oncology in my lab," he says. Today, the group does over 40,000 cancer tests in a year, equivalent to what TMH does. The centre offers radiology services, besides introducing centers of excellence for histopathology and genetics.

Over the years

From one lab in Central Mumbai in 1963 with employee strength of eight people, by 2000 the laboratory had employee strength of 130 and turnover of Rs 2 crore. So, to scale up operations, he formed a JV with Piramal Healthcare (then called Nicholas Piramal) in 2000 called Wellspring-Dr Phadke's Lab. When the JV ended in 2006, the group clocked a turnover of Rs 30 crore in pathology vertical from Rs 2 crore in 2000. It was then that Dr Phadke made a difficult choice. To pump in more working capital, he decided to sell his remaining 40 per cent stake to Piramal Healthcare, the parent company. Dr Phadke assumed the position of Director and Chief of Pathology Services at Piramal Diagnostic Services, supervising quality and expansion of the group.

His risk paid off. Today, the Piramal Diagnostic has 100 labs in 45 cities employing over 2,000 people. "The revenue has also shot up to Rs 130 crore, last fiscal in its pathology division. We now offer more than 1,000 tests," says Dr Phadke.

He claims he was not afraid of losing the brand name (Dr Phadke's Lab) that he took years to create. "We wanted to grow into areas like radiology, oncology, clinical trials, and hospitalbased pathology laboratories, providing highest quality pathology investigations of international standards at prices affordable to the local population. Raising more money was required and thus I had to sell my stake. By this, I am also more focused in what I am doing," says he.

The labs received the NABL accreditation for immunology, histopathology, genetic testing, microbiology, biochemistry and hematology on the basis of international quality control programmes, technical evaluation and ISO 15189 guidelines.

Overcoming roadblocks

He found it challenging to recruit and retain good pathologists for his various branches. "Having a chain of path labs is not similar to opening a food chain. Pathologists play a crucial role in manning the lab. We had to part ways with some of them as I was unhappy with their work," he shares. He found a way around by doing more background check before recruiting a pathologist. He also managed to retain them by giving them a percentage of the profit if they attained their target. Another challenge that he is grappling with today is accreditation of labs at remote places.

Fears and apprehensions

"There were apprehensions in working with a big company like Piramal Healthcare, but because of support from Ajay Piramal and Dr Swati Piramal, funding and administrative backup was excellent," he adds.

Awards

He has won several awards. The last one was 'Yashshree' award from Maharashtra Times in 2008.

Mistakes made and lessons learnt

Sometimes choice of partner in starting a new project was not satisfactory. "This has taught me the importance of detail reference check in any type of association," he says.

Tips for entrepreneurship

Choice of partner and mutual trust is the key to any large venture, according to him.

An entrepreneur that he admires

“Ajay Piramal as I have seen his dedication and hard work from close quarters,” says he.

Way ahead

He aspires that Piramal Diagnostics should become the largest diagnostic company: both in pathology and radiology services in the next three years. "Target is to get NABL accreditation for 20 labs within a year. Right now, only seven labs have NABL accreditation. We also want to become a Rs 500 crore company by 2012," says he.