The company said the revenue and volume growth will be driven by network expansion, growth in wellness and specialty testing, and focus on consolidating hospital business.
Ameera Shah, managing director at Metropolis Healthcare, told ET in an interview that the competition intensity is moderating and the test numbers have been increasing for several quarters.
Shah said increasing volumes will help in operating leverage and improvement in margins.
In the first half of 2023-24, the company’s core revenue, excluding Covid-19 and allied tests and government contracts, grew 13%. The volume growth is higher than the pre-pandemic level of 9%, signifying some stability to the sector. The EBITDA margin in the first half of this fiscal stood at 24.7%. The company expects the EBITDA margin would be 26-27% for the next few quarters.
Metropolis Healthcare is looking at a potential price hike next year, she said.”We have not seen any new competitor enter in the last 12-15 months,” Shah said.She said the competitors that have entered in the past two-three years are either from healthtech (e-pharmacies) or from bricks-and-mortar entrants such as pharma companies and hospitals.
“The guys who have come through the healthtech route basically focused on wellness; they were able to get some traction during Covid. But post-Covid, the world has changed again, the growth that was there during Covid was over,” said Shah. “Now people have to compete on fair grounds. That’s where the incumbents have a bigger advantage where trust and credibility from doctors and customers, compared to healthtech, is going to take a lot of time.”
The new competitors from hospitals and pharma companies, which were hoping that diagnostics would open a new revenue stream in a big way, have yet to see it materialise, said Shah. “The numbers that they were talking about in their own public results didn’t come out to be as exciting as they were hoping, whether on revenue or profits. The investors understood that it is not so easy.”
Shah said Metropolis Healthcare has been focused on improvement of execution and lab expansion.
Metropolis Healthcare plans to add 30 labs each in this financial year and in 2024-25. So far it has added 12 labs, mostly in northern and eastern India.
