Metropolis Healthcare Ltd. share price target

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

Network expansion to drive growth

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.

Metropolis Healthcare’s (Metropolis) reported Q3FY23 performance was a mixed bag. Revenue declined 2.6% YoY (-5% QoQ) at Rs2.9bn (I-Sec: Rs2.8bn). Excluding Hi-Tech and government contract revenues, non-covid revenue grew ~13% YoY (+1,000bps from volume growth and +300bps from higher realisations).

Metropolis Healthcare’s (Metropolis) reported Q2FY23 performance was broadly in line with our estimates. Revenue remained flat YoY (+7.3% QoQ) at Rs3bn (I- Sec: Rs3.1bn) on a high base which had benefited from covid-related business.