Metropolis Healthcare, a leading player in the diagnostics sector, is strategically positioning itself to cater to the top end of the market focusing on high-quality services and specialised tests. Despite the competitive intensity in the industry, Metropolis has been able to maintain its growth and plans to repay its outstanding debt of ₹40 crore before pursuing new acquisitions.
The diagnostics sector experienced a surge in business during the pandemic as people prioritized getting tested for Covid-19. As new players entered the market to capitalize on the boom, the stocks of these companies rallied between 25-35% in the past six months. However, Metropolis has differentiated itself targeting high-end customers and prioritizing quality services.
Ameera Shah, the promoter and Managing Director of Metropolis Healthcare, explained that the company’s focus on top hospitals, doctors, and corporates has established it as a trusted partner in the industry. Despite the entry of tech players offering home services, the demand for such services has declined post-pandemic, affecting these companies. Metropolis remains committed to its high-touch model, emphasizing customer needs and human expertise.
Competition in the diagnostic sector has been increasing, leading to price competition among players. However, Metropolis has chosen to focus on the top end of the market and has not engaged in a price war. Instead, the company has invested in infrastructure, technology, pathologists, and logistics to provide the best services to its customers.
In its latest analysis, Kotak Institutional Equities stated that the worst of the pricing-led competition in diagnostics is behind the industry. Reliance’s Netmeds has offered lower prices compared to other national incumbents, but Metropolis has strategically raised its prices in certain cities while remaining largely unchanged in others.
Metropolis has outlined its future plans to drive growth and maintain its position as a leader in the diagnostic sector. The company aims to increase its reach opening new labs and service centres, with a target of establishing 90 labs within 13 months. Additionally, Metropolis plans to expand geographically and enhance its wellness services, aiming to increase wellness revenue from 14% to 20% in the coming years.
Surendran Chemmenkotil, the CEO of Metropolis Healthcare, highlighted the company’s focus on geographic expansion and increasing wellness revenue. By offering comprehensive wellness packages, Metropolis aims to build a sustainable revenue stream.
Despite the challenges posed expansion, Metropolis remains confident in its financial performance. The company plans to repay its ₹40 crore debt the end of this fiscal year and has the capacity for potential acquisitions due to its robust cash flow.
Metropolis Healthcare’s strategic positioning and focus on high-quality services and specialised tests allow it to avoid engaging in a price war with new age players. By expanding its portfolio and targeting the top end of the market, Metropolis continues to drive sustainable growth in the diagnostics sector.