Metropolis Healthcare Ltd. share price target

Metropolis’ Q1FY26 result was largely in line with our expectations. Consolidation of the three recently acquired businesses led to robust revenue growth of ~23% YoY (organic growth of ~13% YoY).

We met with Ameera Shah, Promoter and Executive Chairperson of Metropolis Healthcare (MHL), to gain insights into management strategy of growing organically (via network expansion) and inorganically (revenue synergies following the integration of recent acquisitions).

Quarterly Update Q4FY25

Network expansion to drive growth

Metropolis’ Q3FY25 result was impacted by lower sales from institutional biz (2% impact on revenue) and muted growth in acute ailment tests. In last 4 years, Metropolis has widened its lab network by 68% to 209 labs in 9MFY25.

MHL’s Q3FY25 EBITDA missed street/our estimates by 9%/4%, with revenue growing 11% YoY driven by B2C revenue improving 15% YoY.

Company Update

MHL announced its acquisition of Core Diagnostics—an oncology focused diagnostics chain with majority of its revenue derived from North/East India— for Rs2.47bn, thus valuing the company at ~2.24x EV/Sales on FY24 revenue

Quarterly Update Q2FY25

MHL’s Q2FY25 print was in line with our estimates, with revenues growing 13% YoY, driven by B2C revenues improving 21% YoY.

Quarterly Update Q1FY25

Quarterly Update Q4FY24

Quarterly Update Q3FY24

Quarterly Update Q2FY24

Network expansion to drive growth

Quarterly Update Q1FY24

Metropolis’ Q1FY24 revenue growth (-1%) and EBITDA margin (-180bps) were impacted by discontinuation of a PPP contract (Q1FY23 sales of INR 200mn) while the core business grew 12% YoY. Metropolis remains committed to expand its network by: 1) deepening its presence in existing cities and venturing into newer ones, 2) connecting directly with consumers to increase B2C share, 3) M&As to improvise scale and restore margins to pre-covid levels.

Network expansion to drive growth

Initiating Coverage Report

Metropolis Healthcare’s (Metropolis) efforts to boost revenue growth through acquisitions and network expansion have taken a hit due to non-recurring covid- linked tests and PPP contracts.