Metropolis Healthcare Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

Metropolis Healthcare delivered a strong Q3 FY26, with robust revenue growth across both group and organic segments, coupled with significant margin expansion for the organic business. The company announced a 3:1 bonus issue and reported progress on acquisitions, despite a one-time impact from Labor Code implementation and a delay in the genomics platform launch for Core Diagnostics.

Highlights

  • Metropolis Healthcare Ltd. reported strong Q3 FY26 performance with Group revenues growing 26% YoY and Organic revenues growing 15% YoY.

  • Organic EBITDA margin expanded by 280 bps YoY to 25%, driven by material cost efficiencies and operating leverage.

  • PAT (excluding exceptional items) for the Group grew 63% YoY to INR 51 crores, with Organic PAT growing 52% YoY.

  • The company announced a bonus issue in the ratio of 3:1, reflecting strong financial position and confidence in long-term growth.

  • Integration of Core Diagnostics and other smaller acquisitions is progressing well, with Core expected to achieve high single-digit EBITDA margin by Q4 FY26.

Concerns

  • Q3 FY26 Group EBITDA margin at 23.4% was lower than organic (25%) due to the lower margin profile of Core Diagnostics.

  • The launch of the genomics platform for Core Diagnostics was delayed by 3 months to January 2026, impacting Q3 gross margins for Core.

  • A one-time impact of INR 9 crores was incurred at the group level due to Labor Code implementation, affecting profitability.

Key financials

  1. Group Revenue Growth — +26%YoY
  2. Group 9-Month Revenue Growth — +24%YoY
  3. Group Patient Volume Growth — +14%YoY
  4. Group Test Volume Growth — +13%YoY
  5. Group EBITDA Margin 23.4%
  6. Group PAT (ex-exceptional) ₹51 Cr +63%YoY
  7. Group PAT Margin (ex-exceptional) 12.6%
  8. Organic Revenue Growth — +15%YoY
  9. Organic 9-Month Revenue Growth — +13%YoY
  10. Organic Patient Volume Growth — +9%YoY
  11. Organic Test Volume Growth — +8%YoY
  12. Organic EBITDA Growth — +29%YoY
  13. Organic EBITDA Margin 25%
  14. Organic PAT (ex-exceptional) Growth — +52%YoY

What they filed

Q1 FY27: revenue up 14.8%, net profit up 41.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue322 297 312 324 356 +11%335 +13%352 +13%372 +15%
EBITDA82 65 53 77 91 +11%80 +23%90 +70%94 +22%
Net profit42 27 24 36 47 +12%32 +19%43 +79%51 +42%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • B2C (Group)
    — Revenue Growth
  • B2B (Group)
    — Revenue Growth
  • North Region (Group)
    17% Revenue Contribution
  • B2C (Organic)
    — Revenue Growth60% Revenue Contribution
  • B2B (Organic)
    — Revenue Growth40% Revenue Contribution
  • TruHealth (Organic)
    — Revenue Growth
  • Specialty (Organic)
    — Revenue Growth
  • TruHealth (B2C Segment)
    — Revenue Growth
  • Specialty (B2C Segment)
    — Revenue Growth
  • Routine (Organic)
    — Revenue Growth
  • Semi-special (Organic)
    — Revenue Growth

Capital allocation

high confidence
  • Capex ₹60 Cr
    • Strengthening and expanding pan-India network
    • Upgrading IT systems and processes
    • Scaling up high-end equipment for advanced and super specialty test capabilities
    Estimated capex for the year is INR 55 crores to INR 60 crores. This is largely towards strengthening and expanding our pan-India network, upgrading IT systems and processes, scaling up high-end equipment to support advanced and super specialty test capabilities.
  • Debt Debt disclosed
    Speaking about liquidity position and cash strength, the company remains net debt-free with a current cash reserves of INR 127 crores.
  • M&A Core Diagnostics Acquisition · Integrated

    Integration progressing well, primary focus on operational alignment, process standardization and cost synergy.

    Q3 margins for Core were lower due to delayed genomics platform launch (now in Jan '26). Expect meaningful improvement in gross margin and high single-digit EBITDA margin in Q4.

    On the inorganic front, our recent acquisitions are progressing well and are well integrated into the Metropolis system. At Core Diagnostics, the primary focus over the past quarters has been on operational alignment, process standardization and cost synergy. The Q3 margins for Core were expected to be slightly higher than Q2 because the plan was to launch the genomics platform in Q3 '25, which would have meant higher gross margins for these genomics tests. However, due to delay of machine arrival into India, these got launched 3 months later in January '26. And these tests were therefore outsourced at lower gross margins earlier, resulting in a lower EBITDA. However, now these tests have started in-house as of January 26. And in Q4, we expect a meaningful improvement in gross margin, supporting a high single-digit EBITDA margin for Core in Q4 of this year.
  • M&A DAPIC, Dehradun Acquisition · Integrated

    Performing as expected, delivering margins better than the group average.

    Expected to demonstrate visible synergy benefits across revenue growth and test mix improvement and channel diversification by year-end.

    Our smaller acquisitions, including Dehradun, Agra and Kolhapur continue to perform as expected, delivering margins better than the group average. Overall, by year-end, we expect our acquisition portfolio to demonstrate visible synergy benefits across revenue growth and test mix improvement and channel diversification.
  • M&A Scientific Pathology, Agra Acquisition · Integrated

    Performing as expected, delivering margins better than the group average.

    Expected to demonstrate visible synergy benefits across revenue growth and test mix improvement and channel diversification by year-end.

    Our smaller acquisitions, including Dehradun, Agra and Kolhapur continue to perform as expected, delivering margins better than the group average. Overall, by year-end, we expect our acquisition portfolio to demonstrate visible synergy benefits across revenue growth and test mix improvement and channel diversification.
  • M&A Ambika Diagnostics, Kolhapur Acquisition · Integrated

    Performing as expected, delivering margins better than the group average.

    Expected to demonstrate visible synergy benefits across revenue growth and test mix improvement and channel diversification by year-end.

    Our smaller acquisitions, including Dehradun, Agra and Kolhapur continue to perform as expected, delivering margins better than the group average. Overall, by year-end, we expect our acquisition portfolio to demonstrate visible synergy benefits across revenue growth and test mix improvement and channel diversification.
  • Liquidity Cash ₹127 Cr
    Speaking about liquidity position and cash strength, the company remains net debt-free with a current cash reserves of INR 127 crores.

Guidance & targets

Organic Revenue Growth

  • Organic Growth Rate Organic Revenue Growth · FY26 · High confidence 12% to 13%
    With sustained traction across channels, improving productivity and better mix, we remain confident of delivering on our guidance of 12% to 13% organic growth rate and expanded margins for FY '26, along gradual uptick in margins on the back of scale and operational efficiencies, material productivity and prudent cost management.

    — Ameera Shah

Margins

  • Expanded Margins Margins · FY26 · Medium confidence expanded margins
    With sustained traction across channels, improving productivity and better mix, we remain confident of delivering on our guidance of 12% to 13% organic growth rate and expanded margins for FY '26, along gradual uptick in margins on the back of scale and operational efficiencies, material productivity and prudent cost management.

    — Ameera Shah

EBITDA Margin

  • Core Diagnostics EBITDA Margin (exit run rate) EBITDA Margin · Q4 FY26 · High confidence high single-digit
    And in Q4, we expect a meaningful improvement in gross margin, supporting a high single-digit EBITDA margin for Core in Q4 of this year.

    — Ameera Shah

Organic EBITDA Margin

  • Organic EBITDA Margin Improvement Organic EBITDA Margin · FY26 · High confidence 70 to 100 bps
    And the margin expansion is largely on the back of the material productivity improvement and other productivity initiatives we have taken in the organization. And at the beginning of the year, we have made an estimate of 70 to 100 bps improvement in the margins, and we stay put with that. You can see that coming in the coming quarter as well.

    — Surendran Chemmenkotil

Organic Patient Volume Growth

  • Organic Patient Volume Growth Organic Patient Volume Growth · near future · High confidence 7% to 8%
    Yes, 7% to 8% volume growth has always been our aspirations in the near future, and we are working towards it, and we have started seeing the early successes on our programs, and we continue to believe that 7% to 8% is a range that we can strike up in the days to come.

    — Surendran Chemmenkotil

Capex

  • Total Capex Capex · FY26 · High confidence INR 55-60 crores
    Estimated capex for the year is INR 55 crores to INR 60 crores. This is largely towards strengthening and expanding our pan-India network, upgrading IT systems and processes, scaling up high-end equipment to support advanced and super specialty test capabilities.

    — Sameer Patel

What to watch in Q4 FY26

Core Diagnostics EBITDA Margin

Q4 FY26
Current Lower than organic average in Q3 FY26
Target High single-digit exit run rate

Why it matters

Indicates successful integration and improved profitability of a key acquisition.

And in Q4, we expect a meaningful improvement in gross margin, supporting a high single-digit EBITDA margin for Core in Q4 of this year.

Risks & concerns

  • Competition and disruptive pricing in genomics

    medium

    Analyst raised concerns about high competition and disruptive pricing in the genomics space, especially with new entrants. Management emphasized focus on quality and non-commoditized tests.

    Analyst acknowledged

  • Currency volatility impacting reagent costs

    low

    Analyst asked about potential impact of rupee volatility on reagent costs. Management stated no anticipated impact at present as most vendors are EU/Japan-based, not US, but acknowledged potential for renegotiations if currency runs away.

    Analyst downplayed

  • Impact of Labor Code implementation

    low

    A one-time impact of INR 9 crores was incurred at the group level due to Labor Code implementation, affecting profitability in Q3.

    Management acknowledged

Q&A highlights

7 direct
Organic Test Volume Growth Direct
Organic test volume growth is 8% for this quarter.

Provides a key organic volume metric not explicitly detailed in prepared remarks.

Asked by Surya Narayan Patra

Genomics Initiatives and Value Contribution Direct
Genomics, if you look at the therapeutic areas which are growing the fastest in the world are actually oncology and neurology over the next 10 years, and the same situation is going to be in India. And for cancer and for any brain or nervous system areas, finally, the most important tests are going to be genomics.

Clarifies management's strategic rationale for investing in genomics despite competitive pricing concerns, focusing on high-value, non-commoditized segments.

Asked by Surya Narayan Patra

Network Expansion Strategy and Lab Closures Direct
Well, I think all the laboratories we had closed down in the last 2 quarters are largely because of integration. Wherever there are duplicate labs available in a town, we have just decided to go with only 1 of the 2. And that's always been the stated strategy that we had. And there are a couple of more labs that we may shut down in the quarter 4 as well and the numbers could be a little more lower than what we are starting the quarter with by the end of this year, right? So, you can expect maybe 2, 3 more labs getting integrated.

Explains the rationale behind recent lab closures as part of integration and consolidation, providing forward-looking insight into further closures.

Asked by Sudarshan Agarwal

GST Impact and Price Revision Strategy Direct
So, there's a marginal benefit that we actually get comes into our results. But if you also know that in January, every year, we used to do a price revision. So, this year, we have delayed the price revision and it did not happen in January, basically so that at least the customers continue to get the benefits of these revisions.

Reveals a strategic decision to delay price revisions to benefit customers, indicating a nuanced approach to pricing amidst GST changes and competitive environment.

Asked by Shyam Srinivasan

Reliance's Entry into Genomics and Competitive Landscape Direct
I think Metropolis' positioning is very different, which is we are all in the diagnostic space, which means we work very closely with prescribing doctors for very complex diseases to say that, look, this is definitely what's happening in the genome in the body, and therefore, this is the action that you can take from it.

Addresses concerns about a new large competitor by differentiating Metropolis's focus on clinical diagnostics for complex diseases versus a potential screening/data-driven approach.

Asked by Kaustav Bubna

Labor Code Impact on Unorganized Sector Direct
Look, I mean, I think, definitely, with government coming in with stronger regulatory frameworks, whether it's on the wage code, whether it's on the quality framework, certainly will help organize the unorganized sector. Obviously, but this depends on enforcement, and it depends on whether people follow the rules on the ground in the unorganized sector.

Discusses the potential long-term positive impact of regulatory changes like the Labor Code on organizing the diagnostics sector and reducing unorganized competition, contingent on enforcement.

Asked by Kaustav Bubna

Organic Revenue Growth in Northern India Partial
Well, at this point of time, I won't be able to give you the specifics, but I think it's growing faster than the company's revenue growth, I can tell you that.

While not providing specific numbers, management confirms that the Northern region is growing faster than the overall company, indicating regional strength.

Asked by Tausif Shaikh

Margin Accretive Nature of Genomics/Specialty Tests Direct
Just to clarify, what I mean by margin accretive or higher EBITDA is, today, if you look at the group margin of the organization, close to about 25% on the MHL organic business, right? And if the question is that is genomics margin going to be higher than that on an individual stand-alone test, maybe at this point, no. The reason for that is because the gross margins on these super specialized tests are lower than they are on the routine tests.

Clarifies that while specialized tests like genomics may not have higher gross margins individually, they contribute significantly to EBITDA when bundled with routine tests, impacting the overall mix.

Asked by Aakash

3 min read 6 chapters

Detailed narrative

Industry Landscape and Strategic Focus

The diagnostics industry continues to see stable demand, with growth increasingly driven by specialty diagnostics, preventive healthcare, and complex testing. Metropolis emphasizes accuracy, depth of insight, and precision-led decision-making, aligning with shifting clinician and patient awareness. The Union Budget's focus on healthcare infrastructure and workforce development is expected to create new opportunities, especially in smaller markets. The sector is also consolidating, with a renewed focus on long-term growth and strong economics rather than discount-led revenue.

Q3 FY26 Performance Highlights

Metropolis Healthcare reported strong Q3 FY26 results, with group revenues growing 26% year-on-year and 9-month revenues increasing by 24%. Organic revenue growth remained healthy at 15% for the quarter and 13% for the 9 months, supported by 9% patient volume growth and 8% test volume growth. The organic EBITDA margin expanded by 280 basis points year-on-year to 25%, driven by material cost efficiencies and operating leverage. Group PAT, excluding exceptional items, grew 63% year-on-year to INR 51 crores, with a PAT margin of 12.6%.

Acquisitions and Integration Progress

Recent acquisitions, including Core Diagnostics, DAPIC (Dehradun), Scientific Pathology (Agra), and Ambika Diagnostics (Kolhapur), are progressing well and are integrated into the Metropolis system. Core Diagnostics' Q3 margins were impacted by a 3-month delay in the launch of its genomics platform, which began in January 2026. Management expects a meaningful improvement in Core's gross margin and a high single-digit EBITDA margin by Q4 FY26. Smaller acquisitions are performing as expected, delivering margins better than the group average, with overall synergy benefits anticipated by year-end.

Genomics and AI Initiatives

A key milestone was the launch of the Center of Genomics in Delhi, integrating Core Diagnostics as a national reference hub for advanced molecular testing. This platform aims to deliver clinically-actionable genomic insights across oncology, reproductive health, and inherited disorders, a category expected to grow rapidly. In AI, Metropolis is focusing on selective high-impact use cases like enhanced test interpretation and quality monitoring, rather than broad-based deployment. The company also secured its first patent for a system focused on monitoring and managing TB-related infections.

Capital Allocation and Shareholder Returns

The company remains net debt-free with current cash reserves of INR 127 crores. Estimated capex for FY26 is between INR 55-60 crores, with approximately INR 40 crores spent in the first 9 months, primarily for network expansion, IT upgrades, and high-end equipment. The Board of Directors approved a bonus issue in the ratio of 3:1 (3 fully paid-up equity shares for every 1 existing share), subject to necessary approvals. This bonus issue reflects the company's strong financial position and confidence in its long-term growth prospects.

Regulatory Environment and Pricing Strategy

Management noted that the healthcare and diagnostics sector is predominantly domestic, making it largely neutral to global tariff actions and trade policies. The recently announced Union Budget reinforces a long-term policy commitment to expanding healthcare access and quality. Regarding pricing, while there was a marginal benefit from GST changes, the company delayed its annual price revision in January to pass benefits to customers. Management believes the market is conducive for price increases and will decide on implementation at an appropriate time.

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