Summary
Metropolis Healthcare Limited - Q3 FY26 Earnings Call Summary Thursday, February 05, 2026 11:00 AM
Event Participants
Executives 4 Ameera Shah (Chairperson & Whole-Time Director), Avadhut Joshi (Chief Business Development Officer), Sameer Patel (CFO), Surendran Chemmenkotil (MD)
Analysts 8 Anshul Agrawal, Kaustav Bubna, Lokesh Manik, Naman Bagrecha, Nisha Shetty (Moderator), Shyam Srinivasan, Sudarshan Agarwal, Surya Narayan Patra, Tausif Shaikh
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Group) | ₹405 crores | +26% YoY; Driven by acquisitions and 15% organic growth. |
| Patient Volumes (Group) | 3.5 million | +14% YoY; Strong contribution from B2B and specialty segments. |
| Test Volumes (Group) | 7.3 million | +13% YoY; Healthy mix of Preventive (TruHealth) and Specialty tests. |
| EBITDA Margin (Organic) | 25.0% | +280 bps YoY; Attributed to material cost efficiencies and operating leverage. |
| EBITDA Margin (Group) | 23.4% | Lower than organic due to Core Diagnostics integration (currently lower margin). |
| PAT (Group) | ₹51 crores | +63% YoY (excl. exceptional items); Strong operational performance despite seasonality. |
| Net Debt | ₹0 (Net Cash) | ₹127 crores cash reserves; Maintained net debt-free status to fund future growth. |
| Capex (9M FY26) | ₹40 crores | On track for full-year guidance of ₹55–60 crores for IT and lab expansion. |
Geographic & Segment Commentary
- North India: This region now contributes 17% of overall revenue, up from 9% previously, following the integration of Core Diagnostics. It is currently the fastest-growing geography for the company.
- B2C Segment: Accounted for 60% of total revenue, growing at 19% YoY (Group). TruHealth (wellness) grew 29% in B2C, driven by digital engagement and high-value bundled packages.
- B2B & Institutional: Contributed 40% of revenue, growing 35% YoY (Group). Management successfully pivoted to high-quality institutional partnerships after exiting low-margin accounts last year.
- Specialty & Genomics: Specialty testing grew 16% YoY. The newly launched Centre of Genomics in Delhi is positioned as a high-end hub for oncology and neurology, leveraging Core Diagnostics’ capabilities.
Company-Specific & Strategic Commentary
- Core Diagnostics Integration: Core is transitioning from outsourcing genomic tests to in-house processing as of January 2026. This shift is expected to move Core to a high single-digit EBITDA margin exit run rate in Q4 FY26.
- Science-led Innovation: Metropolis received its first patent for a TB-related infection management system. This distinguishes the company in the clinical space and deepens ties with prescribing clinicians.
- Network Rationalization: The company added 110 centers in Q3 (300 in 9 months) reaching 750 towns. Concurrently, 4 labs were closed during the quarter to eliminate duplicate infrastructure following acquisitions.
- Capital Allocation: The Board approved a 3:1 bonus share issue. This move aims to reward shareholders and improve market liquidity, reflecting confidence in the company’s financial reserves.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Organic Revenue Growth | 12% - 13% for FY26 | Management expects to hit the higher end of this range given Q4 seasonality. |
| Margin Expansion | 70 - 100 bps for FY26 | Driven by material productivity and operational efficiencies in the organic business. |
| Core Diagnostics Margin | High single-digit EBITDA | Expected exit run rate for Q4 FY26 following the insourcing of genomics tests. |
| Pricing | Deferred Price Hikes | While the environment allows for increases, hikes were deferred in Jan 2026 to pass on GST benefits. |
Risks & Constraints
| Risk | Context |
|---|---|
| Labor Code Implementation | A one-time impact of ₹9 crores was recorded in Q3, with a recurring impact estimated at ₹5–6 crores annually. |
| Margin Dilution from M&A | Recent acquisitions, specifically Core Diagnostics, currently operate at lower margins than the group average, weighing on consolidated profitability. |
| Competitive Intensity | While routine testing faces price pressure from digital players, management notes that premium genomics and specialty tests require higher “trust” barriers. |
Q&A Highlights
Genomics Strategy
- Question: How will genomics contribute given high competition and low volumes? (Surya Narayan Patra)
- Answer: Genomics is essential for oncology and neurology, the fastest-growing therapeutic areas. While gross margins on stand-alone tests are lower, they significantly increase EBITDA per patient when part of a battery of tests (Ameera Shah).
Margin Drivers
- Question: What drove the 280 bps organic margin expansion? (Anshul Agrawal)
- Answer: It was primarily material productivity and procurement efficiencies, not GST changes. GST impact on reagents was marginal as some were already at 5% (Surendran Chemmenkotil).
Pricing and GST
- Question: Will you increase prices given the current environment? (Shyam Srinivasan)
- Answer: The market can absorb hikes, but we deferred the usual January price revision to observe the market and pass on GST benefits from reagent cost reductions (Surendran Chemmenkotil).
Radiology Foray
- Question: What are the plans for the radiology segment? (Anshul Agrawal)
- Answer: We are scaling low-end radiology (ECG, X-ray) across centers and exploring a pilot for high-end radiology to leverage brand trust with doctors (Ameera Shah).
Key Takeaway
Metropolis Healthcare delivered a robust Q3 FY26 with group revenue increasing 26% YoY to ₹405 crores, underpinned by 15% organic growth and the successful integration of North-based acquisitions. Despite Q3 being a seasonally soft quarter, the company maintained a strong 25.0% organic EBITDA margin through disciplined cost management and a strategic shift toward high-quality B2B partnerships. A material milestone was the insourcing of genomic testing in January 2026, which is projected to improve Core Diagnostics’ margins to high single digits in Q4. Strategically, the company is moving deeper into 750 towns via a franchisee-led model while rationalizing its lab footprint. With a net debt-free balance sheet and a 3:1 bonus issue announced, management remains confident in achieving the upper end of its 12-13% organic growth guidance for FY26 while maintaining a focus on high-complexity specialty diagnostics.
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