BackMetropolis Healthcare aims to expand to 1,000 towns, eyes north and east India
The Mumbai-based diagnostic chain has a strong foothold in the southern and western parts of India. It's now targeting Uttar Pradesh, Madhya Pradesh, Assam, and Andhra Pradesh. It is present in 23 states across India, and operates in international markets such as South Asia, Africa, and west Asia.
PremiumNew Delhi: Diagnostic chain Metropolis Healthcare aims to increase its presence to 1,000 towns in the next two years through a blend of organic and inorganic expansion, particularly in the country's northern and eastern markets, chief executive officer Surendran Chemmenkotil said.
“We are currently strongly positioned in 600 towns, but over the next two years, we plan to extend our services to around 1,000 towns. Now, the growth will be a blend of organic and inorganic projects, not just in our existing geographies but also in newer ones that we are exploring," Chemmenkotil told Mint.
The Mumbai-based company has a strong foothold in the southern and western parts of the country, and is planning to bolster its presence in the northern and eastern regions. It's targeting Uttar Pradesh, Uttarakhand, Madhya Pradesh (MP), Assam, Telangana, and Andhra Pradesh (AP). It is currently present in 23 states across the country as well as internationally in south Asia, Africa, and west Asia.
“We are reinforcing our strategy of expanding our footprints venturing into tier 3 and tier 4 towns, while also concentrating efforts in vital clusters across our core geographies. We are targeting these states after careful consideration. UP and MP are vast markets while Assam and the northeast remain underserved, so, there are a lot of good opportunities available in these markets. AP and Telangana, also have great opportunities to grow," he added.
The diagnostics industry has a lot of space to grow, as the sector is currently fragmented and dominated by small and regional players, which are under financial stress, and as awareness about health grows in the country.
The Indian diagnostics industry is projected to nearly double to $25 billion by FY28, up from $13 billion in FY23, according to a Praxis Global Alliance report.
The company is looking to start with 2-3 bolt-on acquisitions during FY25, with a deeper penetration through organic growth. The company will deploy around ₹70 crore as capital expenditure for organic growth.
A bolt-on acquisition refers to acquisition of a smaller firm that presents a strategic fit.
“We are looking for M&A opportunities not only in these new markets but also the existing ones and will allot capital as and when an acquisition is in motion. But we have plans to set up 25 new labs this year," he added. It currently has 199 labs and 4,150 collection centres.
Metropolis Healthcare will finance the acquisitions through internal accruals, equity, or debt. “We already have exceeded with roughly ₹120 crore of cash available on the books. So, according to the requirement and while remaining conservative in our approach we will utilize any of the three mediums available (for acquisitions)," Chemmenkotil added.
This comes as the company is witnessing a rise in patient volumes again, after covid-19, basis which Metropolis plans to outperform the market with 11-12% growth in the top line. According to Chemmenkotil, the industry guidance is 10%.
in Q4FY24, the company reported a revenue of ₹313 crore, a y-o-y rise of 11%, with earnings before interest, tax, depreciation, and amortization (Ebitda) margin rising by 70 basis points to 26.4%. It profit rose 8% ₹36.1 crore.
For the full financial year ended 31 March, its profit declined 10% to ₹127.81 crore, on a revenue of ₹1,207 crore.
3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!
