Stock Of The Day: Metropolis Healthcare Turns Debt Free, Sees Strong Q4—Key Levels To Watch
Metropolis Healthcare repaid all its debt in the March quarter, as revenue in core business grew 15% on-year during the period.
Shares of Metropolis Healthcare Ltd. surged over 7% on Friday after it reported a 15% year-on-year rise in revenue growth in its core business, excluding revenue from Covid, Covid-allied tests and PPP contracts in the fourth quarter ended March 2024. This was driven by volume growth of about 8% and revenue per patient growth of 7%, according to an exchange filing.
Revenue per patient growth was largely driven by growth in the specialty testing segment, the premium wellness segment, and price increases, the filing said.
Despite the prolonged holiday period, especially in March 2024, the company experienced around a 10% annual increase in overall revenue, alongside mid-teen year-on-year growth in revenue for its core business, maintaining a consistent rise in sales volumes across various segments.
The company repaid its debt in Q4, resulting in a debt-free status as of March 31, 2024. The gross debt of the company stood at Rs 12.7 crore as of December 2023, while cash and cash equivalents were Rs 89 crore.
The company's B2C revenues grew by around 18% year-on-year in Q4 FY24. The company's target was for a 60–65% revenue contribution from B2C, compared with 53% in Q3 FY24.
Investments made in expanding the network, acquiring talent, upgrading information technology, and refining processes are proving fruitful, as shown by the rise in sales volumes across both the B2C and B2B sectors, the company said in an exchange filing.
Ebitda margins showed a consistent upward trend both quarter-over-quarter and year-over-year in the fourth quarter, driven mainly by the surge in volumes and the implemented price hike, the company said in the filing.
"Competition intensity has been easing over the past six to 12 months, particularly as new industry entrants prioritise unit economics and profitability over deep discounting strategies. However, competition remains moderate in specific pockets of metropolitan markets, particularly within the B2B segment."
Despite this competitive environment, the company has enhanced its market share in its core geographies and is successfully expanding its presence in new territories with an aggressive lab and network expansion strategy.
Key Levels To Watch
Support Levels: Rs 1,558.25 apiece (Three-week low).
Resistance Levels: Rs 1,933.50 apiece (Today's high)
Expansion
The company plans to add 30 labs in FY25.
Effective January 2024, the company implemented a price increase in the B2C segment across India, which will result in increased revenues and margins in Q4 FY24 and FY25.
The company is planning a price increase in the B2B segment, specifically for the specialised and super-specialised tests in Q1 FY25, which will further boost revenues and the margin profile.
The company is expecting Ebitda margins of 26% to 27% until FY25.