Strong Q4 performance and full-year finish
Speaking on the quarterly results, C Surendran, MD, Metropolis Healthcare highlighted the company’s strong finish to the financial year.
“We have had a very excellent quarter, quarter four and a grand end to the year. We have had 23 percentage revenue growth and the margins, of course, on the very high side, 70 percentage plus kind of margin growth we had in quarter four and we ended the year very well.”
He attributed this performance to a combination of strategic focus areas and successful integration of recent acquisitions.
“There are two or three things which is really helping us to get this kind of a growth. One, of course, our continuous focus on the speciality segment and our focus on the TruHealth, these two are segments which is growing faster than the company’s growth. Now, this is definitely helping us to grow. And also, the integration that we have done of all the acquired entities, four entities we have acquired during the last 12 months and the acquisitions almost in the last phase, they all started performing well, that is helping us to grow.”
Looking ahead, the company has laid out a steady medium-term growth path.
“In terms of the guidance for the coming years, we definitely see that a revenue growth of 14 to 15 percentage CAGR is definitely possible in the next two-three years, that is what our estimate at this point of time and our margins will also come closer 27-28 percentage in the next two to three years’ time.”
Demand shift toward speciality and preventive testing
On the demand environment, Surendran pointed to a clear structural shift in diagnostics consumption.
“In fact, in the last two quarters, we have seen improved need for the high-end speciality testing and also like you know that we have launched the genomics testing in the last quarter and we have also seen very high uptake on the genomics testing.”
He added that preventive healthcare continues to gain traction.
“So, all the speciality segments is really doing well and also, the preventive health is another segment which is really seeing good amount of traction. So, the overall diagnostics is moving away from a concentration on the routine and semi-special testing to more of speciality and preventive healthcare kind of a testing, that is a real moment that is happening in the industry and that is really what is driving us the growth.”
Margin expansion and operational efficiency gains
The company’s sharp improvement in margins has been a key highlight over the past year. Surendran explained the structural drivers behind the expansion from around 18% last year to 25.5% currently, and confidence in further improvement ahead.
He said three major initiatives have driven profitability gains.
“See, three big initiatives have happened during this year. One, of course, at the end of last year we mentioned that our massive lab expansion has come to an end and now, it is time for us to go and bring in productivity from the labs that we already set up.”
He added that operational improvements have significantly enhanced throughput.
“So, our actions around improving the number of centres around each lab has really taken up very well and we are seeing a very good throughput coming and the productivity of each of the labs getting better and with no more new labs getting added, there is no erosion in the margins, that is one big step that we have taken.”
Technology upgrades have also played a key role.
“Second one is, we have really relook at our lab tech platforms, the platforms in which the testing happens. We looked at upgrading this platform, some vendor consolidations that we have done and we have also brought in the best of technology in the labs, that is really giving us improved material consumption and also we have introduced some technology enablers in the labs to reduce our material consumption.”
He further noted ongoing automation and digital improvements.
“So, this definitely is helping us and there are many other productivity enablers through the digital and the automation path that we are taking. So, all these are giving us very sustainable margin upside.”
Integration nearing completion
On the integration of acquired businesses, the company said most of the heavy lifting is already done.
“Well, like I said, we are on the last phase of the integration, technology part of integration almost over, people integration is over, all the synergies that we want to bring in are all over. Maybe the next three to four months’ time we will complete the full integration in terms of aligning the product portfolios, the sales strategy, etc. So, more or less we are done with integration. Next two to three months we will bring it to a closure and then it would be business as usual for us.”
Acquisitions, growth contribution and future strategy
Acquired entities currently contribute around 8% to FY26 revenue. The company expects stronger growth ahead as integration stabilises.
“So, the year one like we mentioned in the past is all about cleaning up the business and bringing into in tune with the Metropolis ways of working, so that part. So, we did not concentrate too much on the volume growth or the revenue growth in year one, but we concentrated on the synergies and the integration of the platforms, which we have completed and this year will be a year where we will definitely take off with respect to the revenues and volume growth, etc, that will happen and that will be in line with the rest of the organisation’s growth.”
On future acquisitions, management remains open.
“So, we are always in the hunt for suitable opportunities for us to come and buy out. So, we are looking out for it. We have a pie and then once this integration of the already existing acquired integrities are over, we will have the time and energies to go and do the next set of integration of the newly acquired entities.”
Tier-wise growth strategy
On geographic mix, tier I cities currently dominate revenue, but tier II and III are also growing steadily.
“Well, our tier II cities are growing at the same time at around 20 percentage. We have brought in some new labs in the past and some of the acquired entities are sitting in the tier II. So, tier II will also definitely will grow as in there are some cities that we identified we need to put some extra focus, which we will do it. So, our plan will be all the three tiers, tier I, tier II, tier III all the three segments should grow in the days to come.”
Why guidance has been moderated
Addressing the apparent moderation in revenue growth guidance to 14–15%, Surendran clarified the base effect from acquisitions.
“No. Well, I mean in the year 26, you got the additional revenue from the acquired entities which you likely mentioned sometime back is about 8 percentage. So, 8 percentage has come out over 13.5 percentage that we did last year, 13.7 percentage we did on organic level and the remaining about 8 to 9 percentage come because of the newly acquired entities. Now, for the coming year the revenue of the acquired entity will be already there in the baseline, that is not going to come on top of it, that is the reason you will find that the revenue guiding for the coming year is in the range of 14-15 percentage.”
