What does the next phase of growth look like for Metropolis?
Ameera Shah: I think there are three broad opportunities for us. One is continuing to do more of what is already working. There is still a large structural runway to go deeper into markets we are already present in and expand into more towns and cities. That opportunity will continue to remain strong. The second opportunity is industry aggregation and consolidation. We will continue to look at acquisitions strategically. The third opportunity is around the consumer. Out of our 5,000-plus centres, around 700 are owned and operated directly by us. These centres give us a significant opportunity to expand beyond pathology.We are trying to reimagine what Metropolis can become beyond diagnostics. We have already piloted services like X-ray, ECG, sonography and non-pathology-based health check-ups in some centres. We now feel it is time to scale these models and make them a bigger contributor to our growth story.
How important are genomics and next-generation sequencing for Metropolis?
Shah: It is very relevant because we all have to remain relevant in the scientific world and fulfil what doctors and patients need. As oncology and neurology continue to be among the fastest-growing therapeutic areas, both of these therapeutic segments require next-generation sequencing, not only to diagnose diseases accurately but also to guide doctors on which therapies to apply.Genomics and all kinds of next-generation sequencing are going to define the next decade in diagnostics. Today, specialty diagnostics already contribute about 38-39% of our mix and are growing faster than routine pathology. It would not be a surprise for us if specialty diagnostics move closer to 45% of revenues in the next few years.
Will Metropolis continue to pursue acquisitions aggressively?
Shah: Our primary strategy has always been organic growth and that has not changed. Acquisitions are not meant to simply add revenue or bulk up scale. We do acquisitions for strategic reasons. Either we acquire distressed but scientifically strong assets, like we did with Core Diagnostics, or we acquire leading regional labs in markets where we want to strengthen our presence, like Agra and Dehradun.We are also very clear that we will not do deals at massive valuations. They have to be sensible deals with sensible people and high-quality businesses. We would like to do four-five acquisitions over the next three years if the right assets become available.Competition has intensified with digital-first healthcare players entering diagnostics. What gives incumbents an edge?
Shah: We have already seen a wave of new competitors enter this industry over the last five-seven years. What has been validated is that you can have companies come in with large amounts of money, strong technology, big ambitions or even strong pharma relationships, but none of that gives anybody an immediate right to win in diagnostics. You still have to earn doctors’ trust. Accuracy and scientific expertise are critical. As illnesses become more serious, the importance of precision, interpretation and scientific knowledge becomes even more critical. That expertise takes years to build. The incumbents are only getting stronger
What are your next operational priorities?
Surendran Chemmenkotil: Over the last three years, we expanded from operations in around 300 cities to nearly 750 cities and added about 75-80 labs. The next phase is about increasing throughput and improving productivity from these assets. We moved from a one-lab-to-20-centres ratio to around one-to-24 this year. Over the next couple of years, we want to take that ratio closer to one-to-35. So, the strategy now is not necessarily going wider but going deeper within the markets where we are already present.
How are you looking at preventive healthcare as a growth segment?
Chemmenkotil: Preventive healthcare currently contributes around 20% of our portfolio and we would like to take that to around 25% over the next couple of years.
What would success look like for Metropolis over the next 24 months?
Shah: We would like to sustain organic growth in the 14-15% range and ideally move beyond that. We would also like to achieve sustainable Ebitda margins of 27-28%. Beyond numbers, success for us would also mean building stronger consumer brands in newer markets, strengthening our direct-to-consumer and digital engine, and expanding our leadership in genomics and specialty diagnostics.
