Metropolis Healthcare Shares Surge on Growth, Margin Expansion

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Metropolis Healthcare on course of major expansion amid acquisitions: Analyst

By S JHA

Mumbai, July 9, 2025 — Shares of Metropolis Healthcare Ltd rallied over 10% on Wednesday, hitting their highest level in several months, after a bullish report by JM Financial Services projected robust earnings growth, margin expansion, and strategic advantages across key geographies.

The stock surge comes in response to investor optimism following a meeting between JM Financial analysts and CEO Surendran Chemmenkotil, who outlined the company’s strategy for sustainable growth and operational efficiency. Analysts cited volume-led growth, improving margins, and strong positioning in core markets as key drivers behind the positive sentiment.

📈 Strong Growth & Margin Visibility

According to the JM Financial report, Metropolis expects to achieve 13–14% organic growth, slightly above its official guidance of 12%+. Margins are projected to improve by 70–100 basis points annually, signaling a turnaround in profitability as the company exits a heavy investment phase.

“Metropolis is entering a more stable capex cycle. With a sharper focus on enhancing penetration through franchise-led centers and digital integration, we see room for margin expansion and consistent growth,” the report said.

🏥 Capex Shift, Lab Expansion Strategy

The company has concluded its aggressive lab expansion phase and is now pivoting to a “hub-and-spoke” model, with plans to add 100–150 centers annually. The capex guidance of ₹50 crore for FY26 will primarily support maintenance, IT upgrades, and equipment renewal, rather than new lab setups.

Currently, Metropolis’ lab network can cater to over 800 towns in India, with plans to add 5–8 labs annually where necessary.

🧬 Wellness and Genomics: New Growth Engines

One of the key growth areas identified is the TruHealth wellness portfolio, which is gaining traction by converting prescription-led tests to preventive and wellness-based diagnostics. This segment, while under competitive pressure from online platforms like Amazon, continues to grow due to rising awareness and brand loyalty.

The company is also betting big on genomics, positioning it as a margin-sustaining segment by integrating it into Metropolis’s broader diagnostic offering. Unlike standalone genomic ventures that often face profitability challenges, Metropolis aims to leverage its network and scale to drive returns.

🔬 Acquisitions Helping Margin Gains

The acquisition of Hi-Tech Diagnostic in Chennai has led to 14–15% growth and 300–400 bps margin expansion, thanks to synergies between Hi-Tech’s mid-market positioning and Metropolis’s high-end capabilities.

Additionally, the strategic buyout of CORE Diagnostics—known for its advanced oncology and genetic testing—is expected to unlock new value levers. Management anticipates the CORE business to grow at 13–14% annually, reaching company-level margins in 3–4 years.

🌍 Regional Strengths: West India Leads, North Emerging

Metropolis maintains a dominant market presence in Western India, with a lab in every district of Maharashtra. The region outperforms company averages by 4–5% due to strong brand equity and a widespread network.

In Northern India, recent acquisitions and organic growth in Uttar Pradesh and Bihar are set to unlock new operational efficiencies. The company sees these as key markets for future scale and margin improvements.

🛡️ Limited Impact from Online Players

Despite the entry of e-commerce players into the diagnostics space, Metropolis has managed to maintain its market share. Management noted that online entrants are primarily targeting the wellness segment and have, in some cases, helped grow overall awareness without aggressively undercutting prices.

📊 Investor Confidence Surges

With a diversified growth strategy, geographic dominance, margin recovery, and disciplined capex, investors responded positively, sending Metropolis shares up over 10% intraday, nearing its all-time high.

As the diagnostic major enters what could be a golden consolidation phase, analysts believe the stock may continue to deliver short- to medium-term gains, especially if it sustains margin improvement and volume growth.

Stock Summary

Stock Move: +10.3% intraday on July 9
52-Week Range: Nearing all-time high
Brokerage View: Positive on earnings visibility, margin expansion
Sectors in Focus: Diagnostics, Genomics, Wellness Testing
Key Risks: Rising competition, pricing pressure, slow integration of acquisitions

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)

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