Metropolis Healthcare Limited — Q4 FY25 earnings call

Call held 14 May 2025

Management summary

Metropolis Healthcare delivered robust FY25 results with 12% revenue growth and 14% adjusted EBITDA growth, driven by strong B2C performance and strategic acquisitions. While Q4 reported EBITDA was affected by one-time costs, the company is poised for significant expansion in North India and aims for 100 bps margin expansion and 25-26% overall revenue growth in FY26 through organic growth and seamless integration of new assets.

Highlights

  • FY25 Revenue grew 12% YoY, driven by 6% patient volume growth and 6% from pricing/mix improvements.

  • B2C segment showed strong performance with 17% YoY revenue growth in FY25, contributing 55% of total revenue.

  • Successfully signed 3 strategic acquisitions (Core Diagnostics, Scientific Pathology, DAPIC) to strengthen North India presence.

  • Management targets 100 bps EBITDA margin expansion for the organic business in FY26, reflecting focus on efficiency.

  • Overall revenue growth, including acquisitions, is projected to be 25-26% for FY26.

Concerns

  • Q4 FY25 reported EBITDA was impacted by INR 21 crores in one-time expenses related to acquisitions and tax cases.

  • Lower-than-usual revenue in February and a decline in acute testing volumes due to seasonal weather changes impacted Q4 operating performance.

  • Core Diagnostics, while acquired, was at breakeven in Q4 FY25 and is expected to reach high single-digit EBITDA in FY26, implying initial margin dilution.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹345 Cr
    YoY +10%
  • Adjusted EBITDA
    ₹84 Cr
    YoY +5%
  • Adjusted EBITDA Margin
    24.3%
  • PAT (excl. one-time costs)
    ₹45 Cr
    YoY +24%

FY25

  • Revenue
    —
    YoY +12%
  • Adjusted EBITDA
    ₹325 Cr
    YoY +14%
  • Adjusted EBITDA Margin
    24.4%
  • PAT (excl. one-time costs)
    ₹161 Cr
    YoY +26%

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
    ₹735 Cr Revenue (FY25)₹193 Cr Revenue (Q4 FY25)55% Share of Total Revenue (FY25)
  • B2B
    ₹477 Cr Revenue (FY25)₹120 Cr Revenue (Q4 FY25)
  • TruHealth
    24% Revenue Growth (FY25)19% Share of Total Revenue (FY25 exit run rate)
  • Specialty
    13% Revenue Growth (FY25)37% Share of Total Revenue (FY25)

Capital allocation

high confidence
  • Capex ₹50 Cr Cut — rapid lab expansion phase completed
    • Organic business ₹50 Cr
    • Strengthen genomics portfolio in Core Diagnostics

    Previously planned ₹60 Cr

    See, from a capex basis, certainly, the capex numbers will come down. While we have spent probably between INR 60 crores to INR 70 crores in the last couple of years, we believe that the capex numbers will be closer to INR 50 crores for the organic business for this year. So you can say INR 50 crores, INR 55 crores. And in terms of acquisitions, look, I mean, I don't think we are at this point looking to go out and do another 3 deals in the first quarter of this year. I don't think we are in that place. Having said that, there are always multiple discussions going on in terms of funnel that we keep building. And if and when we find something that meets our priorities, on we mentioned on the financial priorities, on the strategic priorities, on the good quality business, then it would be difficult to either wait or to delay because these opportunities don't always come exactly at the time you want. So I would say, broadly, we are not actively looking to close any deals in the next 3 to 6 months. But if any of the discussions conclude into something, we may look at something. And yes, the idea would be to continue to build more in the North, but opportunities can come from across the country. There are still markets even in West and South in which we don't have a strong B2C connect, where if something interesting came, we would be open to it as long as it met our criteria.
  • M&A Core Diagnostics Acquisition · Closed · Consideration ₹[object Object] (mixed)

    Leader in pan-India oncology testing, premier oncology platform, opportunity for genomics across the country.

    Breakeven in Q4 FY25, expected to reach high single-digit EBITDA in FY26. Integration under Metropolis brand expected in 12 months.

    Number one is Core Diagnostics, the leader in pan-India oncology testing, which we closed also end of March. ... So I think it's about 20%, 30% of the revenue is genomics and which is all specifically oncogenomics. ... So I mean, if you look at industry-wide, you will find that even at sort of INR 100 crores, the new entities which have built businesses over the last 7, 8, 10 years have not really managed to make profits because it's either subscale. In Core case, it's also completely driven by specialty revenues, right? ... So actually, within the Metropolis Group, even at this INR 110 crore level, it will start to make profit. It's already a breakeven business. ... Core will take about 12 months for it to come under the Metropolis brand. ... So Anshul, sir, the 100 basis points is on the organic business that we talked about it, okay? And Core from a breakeven, they'll get into a single-digit EBITDA during this year. ... One more thing you have to remember on Core that while we had signed the deal at about INR 247 crores of acquisition value, finally, what we booked in our books is INR 218 crores of acquisition value on closing. So that's just information for you.
  • M&A Scientific Pathology (Agra) Acquisition · Signed

    Leading chain in Agra, positioning Metropolis as second largest player in Western Uttar Pradesh. B2C-focused lab known for scientific rigor and high-quality diagnostics.

    At company-level margins, no dilution. Expected to be integrated under Metropolis brand in few months.

    The other 2 we have signed and not closed yet, Scientific Pathology, which is the leading chain in Agra, positioning us as the second largest player in Western Uttar Pradesh; ... And Scientific and DAPIC, both are at company level margins, Metropolis company level margins. So therefore, there should be no dilution from those. ... So for example, the Scientific and Dehradun will immediately come under Metropolis brands as soon as we sign the deals and we close them and we integrate them in the few months. ... And then for Scientific, I think it's about INR 25 crores to INR 26 crores for the whole year in FY '25.
  • M&A Dr. Ahujas' Pathology and Imaging Center (DAPIC, Dehradun) Acquisition · Signed

    Dehradun's premier diagnostic provider, giving leadership in Dehradun and entry into Uttarakhand. B2C-focused lab known for scientific rigor and high-quality diagnostics.

    At company-level margins, no dilution. Expected to be integrated under Metropolis brand in few months.

    and Dr. Ahujas' Pathology and Imaging Center, DAPIC, which is Dehradun's premier diagnostic provider, giving us leadership in Dehradun and entry into Uttarakhand. ... And Scientific and DAPIC, both are at company level margins, Metropolis company level margins. So therefore, there should be no dilution from those. ... So for example, the Scientific and Dehradun will immediately come under Metropolis brands as soon as we sign the deals and we close them and we integrate them in the few months. ... And Dehradun is approximately INR 10 crores to INR 11 crores of revenue.
  • Liquidity Cash ₹118 Cr Net cash surplus as of March 31, 2025.
    Moving on the balance sheet. We have a net cash surplus of INR 118 crores as at 31, March 2025.

Guidance & targets

Volume

  • Patient Volume Growth Volume · FY26 · High confidence 7% range
    So this current year, we are confident of getting back to the 7 percentage range on patient volume growth.

    — Surendran Chemmenkotil

Margin

  • Adjusted EBITDA Margin Expansion (Organic) Margin · FY26 · High confidence 1 percentage point
    We expect the EBITDA to expand by about 1 percentage in this financial year.

    — Surendran Chemmenkotil

Revenue Mix

  • B2C Revenue Contribution Expansion Revenue Mix · FY26 · Medium confidence 1-2 percentage more
    And I think with a similar growth, we expect the expansion to be in the range of 1 to 2 percentage more in this financial year.

    — Surendran Chemmenkotil

Revenue Growth

  • Overall Revenue Growth (Organic + Inorganic) Revenue Growth · FY26 · High confidence 26-27%
    I mean if you put the 2 together, we'll be closer to a 26%, 27% growth overall in the year '25, '26.

    — Ameera Shah

  • Organic Revenue Growth Revenue Growth · FY26 · High confidence 12%
    As Suren mentioned, the idea is to grow organically about 12% and then to grow the acquired assets also at about 13%, 14%.

    — Ameera Shah

  • Acquired Entities Revenue Growth Revenue Growth · FY26 · High confidence 13-14%
    And of course, the acquired entities will also grow about 13, 14 percentage in this year.

    — Surendran Chemmenkotil

  • Core Diagnostics Revenue Growth Revenue Growth · FY26 · High confidence >13%
    And I am also saying this year, we will be growing in excess of 13 percentage. So financial '25 was INR 116 crores. So it's on growing. It's not a steady state.

    — Surendran Chemmenkotil

  • B2B Revenue Growth Revenue Growth · FY26 · High confidence 10-12% levels
    No B2B growth levels will be like 10% to 12% levels of growth.

    — Surendran Chemmenkotil

Profitability

  • Core Diagnostics EBITDA Profitability · FY26 · Medium confidence High single-digit
    The first year, we are hoping for a high single-digit EBITDA, and then that will sort of keep expanding over the next 3 years.

    — Ameera Shah

Network Expansion

  • Lab Additions Network Expansion · FY26 · High confidence Single-digit number
    So we may add some single-digit number of labs based on just filling in some of the markets to improve the turnaround time, etc. But otherwise, we don't have plans to increase the number of labs in this coming year.

    — Surendran Chemmenkotil

Capex

  • Organic Business Capex Capex · FY26 · High confidence INR 50-55 crores

    Previously INR 60-70 crores → INR 50-55 crores

    While we have spent probably between INR 60 crores to INR 70 crores in the last couple of years, we believe that the capex numbers will be closer to INR 50 crores for the organic business for this year. So you can say INR 50 crores, INR 55 crores.

    — Ameera Shah

What to watch in Q1 FY26

Organic Patient Volume Growth

Next quarter
Current 6% (FY25)
Target 7% range

Why it matters

Patient volume growth is a fundamental driver of organic revenue growth for diagnostics companies.

So this current year, we are confident of getting back to the 7 percentage range on patient volume growth.

Risks & concerns

  • One-time costs impacting reported profitability

    medium

    INR 21 crores in Q4 FY25 due to acquisition-related transaction fees, diligence, tax cases, and inventory provisioning.

    Management acknowledged

  • Integration challenges for new acquisitions

    medium

    Seamless integration of Core Diagnostics, Scientific Pathology, and DAPIC requires onboarding, aligning systems, and cultural alignment, with Core integration taking 12 months.

    Management acknowledged

  • Temporary de-operating leverage

    low

    Lower-than-usual revenue in February and rapid lab/center rollout in H2 FY25 led to temporary de-operating leverage impacting Q4 margins, but expected to normalize.

    Management acknowledged

  • Competition from new entrants

    low

    New tech-driven wellness players are either pivoting to traditional models or low-margin B2B, and Metropolis's omnichannel approach is working well.

    Management downplayed

Q&A highlights

8 direct
Volume & Margin Guidance for FY26 Direct
So this current year, we are confident of getting back to the 7 percentage range on patient volume growth. ... We expect the EBITDA to expand by about 1 percentage in this financial year.

Management provided specific numerical guidance for patient volume growth and EBITDA margin expansion for the upcoming fiscal year.

Asked by Raman KV

Core Diagnostics Financials and Integration Direct
Core has got, obviously, I don't remember the exact number, but I think it's about 20%, 30% of the revenue is genomics and which is all specifically oncogenomics. ... The first year, we are hoping for a high single-digit EBITDA, and then that will sort of keep expanding over the next 3 years.

Clarified Core's revenue contribution from genomics, its current profitability status (breakeven), and the target for achieving high single-digit EBITDA within the first year of integration.

Asked by Amey Chalke

North India Expansion Strategy and Brand Integration Direct
So for example, the Scientific and Dehradun will immediately come under Metropolis brands as soon as we sign the deals and we close them and we integrate them in the few months. Core will take about 12 months for it to come under the Metropolis brand.

Management detailed the integration timeline for the new acquisitions and confirmed the strategy of bringing them under the Metropolis brand in a phased manner.

Asked by Amey Chalke

Breakup of One-time Costs in Q4 FY25 Direct
The majority of that is coming from M&A-linked costs. ... Plus, like we said that we had some costs which came for the tax cases. ... And the last one was a small provisioning for inventories at the end of the year, which we believed were slow moving or close to expiry, etc.

Provided a clear breakdown of the INR 21 crores one-time expenses, reassuring that M&A-related costs are non-recurring for Q1 FY26.

Asked by Anshul Agrawal

Impact of Lab Expansion on Margins Direct
See, what happens, like we always maintain a lab when we expand the labs, it takes a couple of years for us to get into the company levels of margin or sometimes a little more than 2 years. So the last 2 years, we have done a very high number of labs. So a little bit of impact will be there in this financial year also and maybe in some part of the next financial year.

Explained the lag effect of lab expansion on margins, indicating that the benefits of past investments will materialize over time and impact FY26.

Asked by Rishi Mody

Sustainability of B2C Growth Drivers Direct
Really, it's coming from a combination of 3 things. It's coming from an expansion of our collection center networks in our core markets, which we will continue to do. Second, it's coming from the product mix and being able to really customers wanting to do sort of larger packages and therefore, having a higher revenue per patient. And it's also coming thirdly from the additional services that we are providing in our centers...

Management clearly articulated the three sustainable drivers of B2C growth, providing confidence in its continued trajectory.

Asked by Rishi Mody

Capital Allocation Priorities and Future Capex Direct
While we have spent probably between INR 60 crores to INR 70 crores in the last couple of years, we believe that the capex numbers will be closer to INR 50 crores for the organic business for this year. So you can say INR 50 crores, INR 55 crores.

Management outlined a reduced capex plan for FY26, signaling a shift from aggressive expansion to optimization and efficiency.

Asked by Surya Patra

Core Diagnostics Revenue Growth and Gross Margins Direct
The revenue is growing at -- yes, we said last year, we ended with about INR 110 crores, which came at a 15 percentage, 16 percentage growth. And we are also saying this year, we will be growing in excess of 13 percentage. So financial '25 was INR 116 crores. ... Core gross margins at 60% levels.

Clarified Core Diagnostics' revenue growth trajectory and confirmed its gross margin levels, addressing concerns about its scaling and profitability.

Asked by Gaurav

2 min read 6 chapters

Detailed narrative

Strategic Acquisitions Bolster North India Presence

Metropolis Healthcare successfully acquired three key entities: Core Diagnostics, Scientific Pathology (Agra), and Dr. Ahujas' Pathology and Imaging Center (DAPIC) in Dehradun. These acquisitions are pivotal for expanding the company's footprint in North India, with the region's revenue contribution projected to increase from 8% to 14-15% in FY26. Core Diagnostics, a leader in oncology testing, also provides a platform for genomics expansion, aligning with Metropolis's vision for deep technical expertise and doctor connect.

Strong FY25 Performance Driven by B2C and Operational Focus

For FY25, Metropolis reported a robust 12% year-on-year revenue growth, supported by a 6% increase in patient volumes and strategic pricing/mix improvements. The B2C segment was a key growth driver, expanding 17% YoY and now contributing 55% to total revenue. Adjusted EBITDA for FY25 grew 14% YoY to INR 325 crores, achieving a margin of 24.4%, reflecting the company's focus on profitable growth and a strategic shift away from low-margin institutional contracts.

Q4 FY25 Impacted by One-time Costs and Seasonal Factors

Q4 FY25 revenue reached INR 345 crores, a 10% YoY increase, but reported EBITDA was INR 63 crores, impacted by INR 21 crores in one-time expenses. These costs were primarily associated with M&A transaction fees, diligence, tax cases, and a small inventory write-off. Additionally, lower-than-usual revenue in February and a decline in acute testing volumes due to seasonal weather changes temporarily affected Q4 operating performance, though March saw a healthy recovery.

Shift from Infrastructure Build-out to Efficiency and Optimization

After a period of significant investment, including adding almost 90 labs and 2,000 centers in the last four years, Metropolis is now transitioning its focus to execution and optimization. The company plans to slow down new lab additions to a single-digit number in FY26, while accelerating collection center expansion. This strategic shift is expected to ease margin pressure and drive operational efficiencies, with a target of 100 basis points EBITDA margin expansion for the organic business in FY26.

Integration and Profitability Outlook for Acquisitions

Core Diagnostics, with FY25 revenue of approximately INR 108 crores, was at breakeven in Q4 FY25 and is expected to achieve high single-digit EBITDA in FY26, with full integration under the Metropolis brand anticipated within 12 months. Scientific Pathology (FY25 revenue ~INR 25-26 crores) and DAPIC (FY25 revenue ~INR 10-11 crores) are already operating at company-level margins and are expected to integrate within months. The combined EBITDA contribution from these three acquisitions is projected to be INR 20-25 crores in FY26.

Capital Allocation and Future Growth Projections

Metropolis maintains a strong financial position with a net cash surplus of INR 118 crores as of March 31, 2025. Organic business capex is projected to decrease to INR 50-55 crores in FY26, down from INR 60-70 crores in previous years, reflecting the completion of the rapid lab expansion phase. The company anticipates an overall revenue growth of 25-26% for FY26, driven by approximately 12% organic growth and 13-14% contribution from the acquired entities.

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