Brokerages Bullish On Metropolis Healthcare On Strong Expansion Prospects

Brokerages were impressed by the performance of Metropolis Healthcare in the March quarter and the firm's expansion plans.

What Happened: The diagnostic company's net profit gained 8% year on year to ₹36 crore in the March quarter. Revenue went up 11% to ₹313 crore.

The firm’s reported EBITDA margin was at 25.5% while core business patient volume grew 7.3% to 29.8 lakh. 

In its guidance for FY25, the company said it will have a mid-teen revenue growth with 8-9% volume growth and 5-6% growth in realisation. The company plans to add 25 labs in FY25

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Brokerage Views: Nuvama Institutional Equities gave a "buy" call and raised the target price to ₹2,300. Nuvama sees a revenue and profit compound annual growth rate of 14% and 32% respectively over FY24-FY26 on the back of margins increasing to 26% by FY26, powered by the company's aggressive expansions, price hikes in business-to-customer (B2C) and share in B2C and speciality segment growing and premium business doing well.  The brokerage said the B2C, premium wellness and specialised testing segments are growing around 15-20%. 

HDFC Securities maintained its "add" call and increased the target price to ₹2,050 on steady growth, improving lab infra maturity, price hikes, scale-up in B2C and wellness segment although there will be moderation in expansion due to 5-6 lab additions from FY26 from the current trajectory of 20-30 labs. 

Kotak Institutional Equities maintained its "sell" call and increased the target price to ₹1,750 reasoning the current valuations limit the upside for the stock. The EBITDA for Metropolis also came 7% lower than the brokerage's estimates due to lower gross margins and expansion-linked capex. 

Price Action: Metropolis Healthcare stock was trading flat at ₹1,957, up 0.04% on Thursday's session. 

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