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ICICI Securities Report
Metropolis Healthcare Ltd.'s Q4 FY24 results benefitted from a change in accounting year of its overseas subsidiary; adjusting for this, Metropolis' result undershot our expectation marginally.
To further profitability, Metropolis took a ~4% price hike in January 2024; even so, volume growth (7% in Q4 FY24) has been steady. Impact of network expansion is in its last leg; it may add 25 labs in FY25E and 6–7 labs in FY26E.
Ebitda impact from new centres addition has softened, shrinking 30 bps QoQ in Q4 FY24. Via price hikes/better volumes, Metropolis is likely to restore its Ebitda margins to ~27–28% by FY26E.
Management is also actively pursuing an merger and acquisition, which may lift near-term earnings growth. We raise our FY26E Ebitda by ~5%. Retain Add with a higher DCF-based target price of Rs 2,160.
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