V Govindarajan, Founder and Managing Director of Aarthi Scans & Labs, has spent more than two decades proving that advanced diagnostics need not be expensive or limited to metros. Starting with a single centre in Tamil Nadu and no external funding, he built a nationwide network by treating affordability as a core value, not a discount strategy.
In a conversation with IndiaMedToday, Govindarajan explained how growing through internal accruals shaped every decision, from lean operations to measured expansion. He spoke about keeping prices low without compromising on quality, the discipline of staying self-sustaining in a capital-heavy sector, and the conditions under which he would consider institutional investors or an eventual IPO. For him, patient trust remains the non-negotiable anchor of Aarthi Scans’ growth story.
1. When you started Aarthi Scans, what gaps did you see in diagnostic healthcare, and how did building the organisation without external funding shape your early decisions?
A: When I started Aarthi Scans in 2000, the most visible gap in diagnostic healthcare was access, especially in the southern districts of Tamil Nadu. Advanced imaging, like CT and MRI were largely concentrated in metros. Patients from Tier 2 and Tier 3 towns had to travel long distances, incur high costs, and lose valuable time simply to get a diagnosis. Diagnostics, which ideally should enable faster treatment, had ironically become a bottleneck.
My belief was simple, diagnostics should come closer to the patient. From the beginning, we decided to offer all essential modalities under one roof, from MRI and CT scans to X-rays and blood tests, so patients did not have to seek multiple centres. This integrated approach was uncommon at that time, but it addressed a real patient pain point.
Building the organisation without external funding had a profound influence on my early decisions. There was no buffer capital, so every rupee mattered. The initial years were truly hand-to-mouth. I was personally involved in every aspect, patient interactions, dispatching reports, coordinating with radiologists, hiring technicians, and even making sales calls. That phase grounded the organisation in operational realism and humility.
Because survival depended on cash flow, we learned discipline early. We avoided excess, focused only on essentials, and built systems gradually. This constraint-driven approach created a culture of accountability and respect for patients’ money – values that continue to define Aarthi Scans even today.
2. Aarthi Scans expanded primarily through internal accruals rather than external capital. How did this influence the pace, direction, and discipline of your growth compared to funded peers?
A: Growing through internal accruals forced us to adopt a measured and deliberate expansion strategy. Unlike our funded peers who often expand rapidly to capture valuation milestones, our growth was firmly anchored in profitability, free cash flow, and sustainability. Every new centre had to justify itself operationally before the next one could be considered.
This approach naturally slowed the pace of expansion, but it also brought clarity. We expanded only where there was genuine demand and where we could maintain quality and operational control. There was no pressure to scale for optics or investor presentations. Instead, our direction was guided by patient needs and long-term viability.
The absence of external capital also instilled in us a strong financial discipline. We consciously avoided expensive interiors, flashy branding, or high-profile hires. Aarthi Scans remained a simple, family-owned and professionally run organisation, where roles evolved organically, and leadership emerged from within. This kept our cost structure lean, a major competitive advantage in diagnostics.
When private equity interest in diagnostics peaked in the 2010s, we chose not to participate. I did not need funding either to expand or to take money home. Our growth was already self-funded and stable. Looking back, this discipline protected us from overextension and allowed us to build resilience.
3. The company is known for affordable pricing. Was this a deliberate business strategy, and what operational choices made it viable without compromising sustainability?
A: Yes, affordable pricing was a deliberate and strategic choice, not an afterthought. I strongly believe that in a competitive and increasingly transparent healthcare environment, diagnostics need a clear point of differentiation. As internet penetration increased in India and patients became more informed, the Indian healthcare system began shifting towards a B2C decision-making model, where patients actively compared options and had a plethora of options.
Hence, it became an intentional strategy to offer transparent, affordable pricing directly to the public, without hidden costs or unnecessary upselling. This transparency helped build trust and encouraged volume-led growth. We focused on operational efficiency, automation, and standardisation across centres.
At a personal level, timing also mattered. By the time we fully leaned into this model, my children were grown and studying radiology, and I did not have personal financial pressures. That gave me the freedom to experiment, refine the model, and stay patient. Ultimately, affordability worked because it was backed by volume, efficiency, and trust, not compromise. It strengthened our brand and created a self-reinforcing growth engine.
4. Lower pricing often raises concerns around diagnostic accuracy and clinical standards. How do you ensure quality remains non-negotiable while operating within tight cost structures?
A: In healthcare, quality is non-negotiable. Without it, no organisation can survive in the long run. From the start, I was clear that affordability should never come at the cost of accuracy or trust. Our philosophy has always been that clinical credibility is the strongest long-term differentiator.
In radiology, quality begins with two fundamentals: excellent imaging and reliable reporting. We invest only in brand-new equipment sourced directly from Siemens (Germany). We do not buy refurbished machines or compromise on specifications. High-quality machines ensure consistent imaging, lower repeat scans, and greater diagnostic confidence.
Equally important is reporting quality. We have seven radiologists in the family who oversee report accuracy and clinical governance. Their involvement ensures consistency, accountability, and continuous learning across centres. In pathology, our approach is similarly rigorous. All testing is fully automated using platforms from Roche (Switzerland) and Bio-Rad (USA). Automation reduces manual errors and improves reproducibility. Additionally, in this AI era, every lab report now passes through an AI-based validation layer before getting final pathologist approval, adding another safeguard against errors.
Cost control comes from efficiency, not shortcuts. We optimise workflows, standardise processes, and invest upfront in the right technology.
5. Advanced diagnostic technology is capital-intensive. How do you prioritize investments and upgrades while remaining self-sustaining?
A: Technology decisions in diagnostics are long-term commitments and not impulse purchases. When we invest in CT or MRI equipment, we follow a thorough evaluation process. This includes technical validation, factory visits to Germany, and direct discussions with engineers to understand machine longevity, imaging quality, and serviceability.
We prioritise machines that offer long-term reliability and consistent OEM support. Our preference is always to buy new-generation equipment rather than upgrading older machines. While upgrades may seem cheaper upfront, they often lead to higher maintenance costs, downtime, and compromised performance over time. Replacing outdated technology with newer machines is actually more cost-effective in the long run. Newer systems consume less electricity, have lower helium requirements and deliver faster throughput with better image quality. These efficiencies directly impact operating costs and patient experience.
Because we fund investments internally, every purchase must make economic sense. We evaluate expected utilisation, demand patterns, and service costs before committing capital. This discipline ensures that technology enhances sustainability rather than straining it.
Our philosophy is simple: technology should serve patients and clinicians first, and finances second, but both must align. By staying patient, informed, and selective, we have been able to remain technologically advanced without compromising financial independence.
6. Has Aarthi Scans ever taken external funding, or considered it seriously, and how did those discussions influence your growth or strategy?
A: Aarthi Scans has not taken external funding so far. For most of our journey, we did not feel the need for it. The organisation was growing steadily, generating sufficient internal accruals, and maintaining strong financial health. Funding was never a prerequisite for our expansion or personal financial security.
However, as we look ahead, particularly towards a potential IPO in the next four to five years, our thinking has evolved. At this stage, having an institutional investor on board could be beneficial, not for capital alone, but for strengthening governance, compliance, and reporting structures ahead of a public listing.
That said, our core strategy is non-negotiable. Affordable, high-quality diagnostics will remain our central mission. Any investor engagement would have to respect this philosophy. We are not interested in growth that compromises pricing ethics, quality standards, or organisational culture.
Discussions around funding have reinforced the importance of clarity. Knowing what you will not change is just as important as knowing what you want to scale. If and when we bring in external capital, it will be to prepare the organisation for its next institutional phase, not to alter our ethos’ DNA.
7. Under what conditions would Aarthi Scans consider an IPO or external funding, and what would such a move need to protect above all else?
A: The diagnostics sector has matured significantly, and today we see several integrated players receiving private equity backing and going public. For organisations that have stayed disciplined and patient-focused, this represents a natural evolution rather than an exit.
For Aarthi Scans, an IPO would be a moment of pride, recognising decades of hard work by our teams across locations. It would also provide long-term liquidity and institutional credibility. However, funding or listing will only be considered under conditions that protect what we value most.
First, our closely-knit leadership team, many of whom have grown with the organisation, must remain intact. Second, our lean cost structure, which enables affordable pricing, must not be diluted. Third, decision-making autonomy in clinical quality and patient pricing must be preserved.
Whether funded or not, we will not chase unsustainable expansion or margin inflation at the cost of patients. The purpose of capital, in our view, is to support scale with responsibility, not to redefine success purely in financial terms.
8. The diagnostics sector has seen aggressive investor-led expansion. Do you see this model posing any risks when we talk about patients, pricing, and ethical decision-making?
A: The Indian diagnostics market is highly competitive, and that competition has largely benefited patients. When multiple players compete, prices fall, service improves, and innovation accelerates. Indian diagnostic pricing today is among the most affordable globally. From free home collections to mobile app-based reports, consumerism has empowered patients. In that sense, investor-led expansion has helped professionalise and scale access.
That said, the risks emerge when growth targets override clinical judgment. Diagnostics must remain a healthcare service first, not just a business. Ethical decision-making, test appropriateness, and reporting integrity cannot be compromised in the pursuit of scale. In our experience, the safeguard lies in culture and leadership intent. If patient trust is the core metric, expansion can coexist with ethics. If valuation alone becomes the goal, distortions are inevitable.
At Aarthi Scans, competition pushes us to be better, more efficient, and more transparent. As long as patient interest remains central, competition and capital can coexist productively in Indian healthcare.
9. How did your role evolve as the organization grew from a single center to a multi-city network, and what systems became essential to manage scale responsibly?
A: As the organisation scaled, my role naturally shifted from execution to guidance and supervision. Today, I focus more on long-term direction, values, and governance, while the next generation leads day-to-day operations with conviction.
My daughter, Dr. Aarthi, oversees clinical report quality and doctor hiring. My son-in-law, Dr. Prasanna, manages operations and new projects. My son, Dr. Arunkumar, leads IT, marketing, and our longevity vertical – Vital Insights. Seeing them take ownership gives me immense pride.
To manage and scale responsibly, two systems became critical: HR training and IT orchestration. Standardised training ensures consistency across our centres, while strong IT controls enable monitoring, reporting, and efficiency without micromanagement. These systems allow us to scale without losing our operational soul.
10. Looking back, do you believe a self-sustaining, affordable diagnostics model is an exception in India or a replicable alternative to capital-heavy healthcare expansion?
A: I firmly believe it is replicable. My consistent advice to entrepreneurs is: do not build your business model expecting funding. Start small, give it everything, focus on patients, and do well, funding will eventually come to you if you need it.
India has many small and mid-sized diagnostic centres and hospitals that are self-sustaining despite being capital-intensive. What keeps them alive is patient trust. When one patient refers another, you create a flywheel that reinforces itself.
Capital can accelerate growth, but trust sustains it. If you chase funding first, you risk losing focus. If you chase trust, growth follows naturally. That philosophy has guided Aarthi Scans from the beginning, and continues to do so today.
