• Revenue Growth: 10.8% year-on-year increase to INR 323 crore for Q3.

• Patient Volume Growth: 4% increase in Q3.

• Test Volume Growth: 6% increase in Q3.

• B2C Revenue: INR 178 crore, a 15% year-on-year increase.

• B2B Revenue Growth: 10% year-on-year increase for Q3.

• EBITDA: INR 71.6 crore, a 9.4% year-on-year growth with a margin of 22.2%.

• Net Profit (PAT): INR 31.5 crore, a 15% year-on-year growth with a margin of 9.8%.

• Net Cash Surplus: INR 205 crore as of December 31, 2024.

• Working Capital Cycle: 13 days.

• Core Diagnostics Acquisition: INR 135 crore from internal cash and balance via stock swap.

• Warning! GuruFocus has detected 3 Warning Signs with BOM:542650.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Metropolis Healthcare Ltd (BOM:542650) reported a strong 11% year-on-year revenue growth in Q3, driven by a 4.1% increase in patient volumes and strategic adjustments in product mix and pricing.

• The company's B2C portfolio continues to gain momentum, achieving eight consecutive quarters of steady growth, with a 15% year-on-year increase in Q3.

• Metropolis Healthcare Ltd (BOM:542650) is actively pursuing inorganic growth opportunities, with several potential acquisitions under consideration, particularly in northern markets.

• The acquisition of Core Diagnostics is expected to be EPS accretive from year one, with strong ROI anticipated.

• The company is focused on expanding its specialty diagnostics segment, particularly in genomics and molecular oncology, to drive scientific progress and maintain leadership in the field.

Negative Points

• Q3 has historically been a challenging quarter for Metropolis Healthcare Ltd (BOM:542650), with lower patient footfall and diagnostic volumes due to the festival and holiday season.

• The margin profile of Core Diagnostics is expected to be lower than Metropolis for the first twelve months post-acquisition, potentially diluting overall margins temporarily.

• The company experienced a surprising low volume of acute patients in Q3, attributed to seasonal fluctuations.

• Employee costs have increased, with a reported 17% rise in Q3, which could impact profitability if not managed effectively.

• The institutional business, which is not a priority for Metropolis Healthcare Ltd (BOM:542650), continues to be a drag on overall growth.

Q & A Highlights

Q: Could you provide insights on your pricing strategy and the competitive landscape? A: We have implemented a micro-marketing strategy, adjusting prices based on market conditions. This involves increasing prices where possible and correcting them downwards where necessary, resulting in a net positive impact of about 2%. In the B2B segment, we have maintained our discount structure despite competitive pressures. - Surendran Chemmenkottil, CEO