ICICI Securities's research report on Metropolis Healthcare
Metropolis delivered a strong beat in operational performance in Q2FY26 led by renewed focus on margin improvement. Metropolis is unlikely to pursue any acquisition in the near term, until the company completes the integration of its recently acquired assets like Core Diagnostics. In Q2FY26, margins of its base biz improved by 70bps YoY to 26.8% while margins of Core Diagnostics scaled to high-single digits. Improving mix of preventive and specialty tests, along with expanding Tier 2–3 presence and operational efficiencies from the integration, are likely to be key growth drivers for the company in the near term. We raise our FY26–27E EPS by 1–2% to factor in better synergies from the acquired businesses. Maintain BUY with a DCF-based unchanged TP of INR 2,400.
Outlook
The stock currently trades at valuations of 38.7x FY27E and 31.8x FY28E earnings and EV/EBITDA multiple of 20.8x FY27E and 17.5x FY28E. We maintain BUY on the stock with a DCF-based unchanged target price of INR 2,400.
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