Emkay Global Financial' research report onMetropolis Healthcare
We attended the investor and analyst meet of Metropolis Healthcare (MHL) and came back enthused by the profitable growth prospects presented by the company. KTAs: 1) Management reiterated its FY27 guidance of 14-15% revenue growth (assuming no price increase) and EBITDA margin expansion of 100-150bps on the back of accelerating network expansion and improving center-to-lab ratio, resulting in better utilization. 2) Management believes the growth will be primarily volume-led, with increasing share of TruHealth (up to 25% of revenue) and Specialty testing portfolio (up to 45% of revenue) as MHL invests in cutting edge technology and clinician engagement. 3) Focus on the digital channel (25% of revenue) has started yielding meaningful results, with customers secured via the digital medium providing almost 2x LTV vs offline channels. 4) MHL maintains discipline while executing M&As and will continue with a similar playbook as in the past (strong regional brand, lab/scientific credibility and scalability). 5) Shift toward quality organized players, along with growing awareness about preventive testing, is likely to benefit market leaders like MHL.
Sep-27E TP of Rs675 is unchanged (DCF-based), implying FY28E PER of 45x (~5% discount to DLPL) and FY28E EV/OCF of 29x; maintain BUY.
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