Mumbai-based diagnostic chain Metropolis Healthcare expects margin dilution in the next financial year ending March 2026 following its acquisition of Core Diagnostic. CEO Surendran Chemmenkotil said, “Core Diagnostic is relatively on a lower single-digit margin, so you can say 10% of the next year’s revenue coming at a much lower margin. Maybe there will be a little bit of margin dilution because of Core Diagnostic.
However, the company’s goal is to bring Core Diagnostic in line with Metropolis’ overall margin levels by the third year.
The company acquired Core Diagnostics to expand its oncology offerings and strengthen its position in India’s growing cancer testing market.
The acquisition is nearing completion and the integration process will begin soon. Core Diagnostics’ revenue will start reflecting in Metropolis group financials by the start of the next financial year.
In October–December 2024 (Q3FY25), Metropolis reported revenue of ₹322 crore, with margins at 22% and profit after tax at ₹31 crore.
“Year-to-date (YTD) quarter three we are done at 12.5% growth in our revenues and earnings before interest, taxes, depreciation, and amortisation (EBITDA) is around 24.5%. We expect the year to be ending in the similar trends as we have been trending in the YTD quarter three,” Chemmenkotil said.
He noted that the third quarter is typically a slow period for the company’s business, particularly in diagnostics and overall healthcare.
However, the fourth quarter tends to see a recovery, with increased activity in the wellness segment as people complete their health checkups before the year ends.
Metropolis Healthcare is also in the final stages of discussions with several potential acquisition targets, particularly in northern India. Once these deals are finalised, they are expected to further enhance growth in the coming year, building on the 12-13% increase already seen this year.
Overall growth for the company will come from a combination of the company’s existing organic expansion, revenue contributions from the Core Diagnostics acquisition, and any additional acquisitions that are completed.
Metropolis Healthcare’s current market capitalisation is ₹8,460 crore. Its shares have declined 2% over the last year. CNBCTV18