Metropolis Healthcare: Completing a Five-Year Journey Since IPO

Metropolis Healthcare is engaged in providing diagnostic services. It offers a range of clinical laboratory tests and profiles used for prediction, early detection, diagnostic screening, confirmation, and monitoring of diseases. The company completed its five-year listing journey, marking the same day in the year 2019 when the company’s shares debuted in the Indian market.

IPO Flashback

Metropolis Healthcare, a Mumbai-based diagnostic company, offered its IPO in 2019 with a share price range of Rs 877 to Rs 880 per share, with a lot size of 17 shares. The total issue size of the IPO was Rs 1204 crore. The IPO was subscribed nearly 5.83 times on the final day, and the stock debuted in the market on April 15, 2019, at Rs 960 per share, representing a premium of 9% over its final issue price of Rs 880 per share.

Share Performance

As we discussed during the IPO, the company’s shares debuted at a premium. Before the COVID market turmoil, the shares reached a high of around Rs 2109 per share in March 2020 but fell to a low of Rs 998 per share in the same month. When the demand for diagnostic, pathology, and pharmaceutical companies surged in the market, companies from these sectors started recovering first. They showcased a significant rally of around 258% in around 650 days, hitting an all-time high of Rs 3579.90 per share in December 2021. However, the shares faced selling pressure from these levels, which can be considered as profit booking, eventually bringing the company’s shares back to the same levels where the rally started during COVID. Currently, the shares of the Metropolis are trading at Rs 1777 per share, representing a return of around 102% from its final issue price of Rs 880 per share.

Financial Performance

In Q3 FY24, Metropolis Healthcare reported a revenue of Rs 291 crore, representing a year-on-year growth of 2.10% from Rs 285 crore in the same quarter last year. The operating profit of the company stands at Rs 65 crore, with an operating profit margin of 22% compared to Rs 70 crore in the same quarter last year. The net profit of the company stood at Rs 27 crore in the December quarter, registering a decline compared to a net profit of Rs 36 crore.

The five-year Sales CAGR growth stands at 12%, while the Profit CAGR growth stands at 7%. The ROCE and ROE stand at 17.4% and 15.2% respectively. The company’s shares are trading at a PE of 73 times in the market.

Business Overview

Metropolis Healthcare Limited is an India-based company engaged in providing diagnostic services. The company operates through the pathology services segment. It offers a range of clinical laboratory tests and profiles used for prediction, early detection, diagnostic screening, confirmation, and monitoring of diseases. The company also provides analytical and support services to clinical research organizations for their clinical research projects. Its services include pathology testing services, corporate wellness, lab services in hospitals, and clinical research services. The company offers a range of tests and profiles that include advanced tests for the diagnosis of cancer, neurological disorders, infectious diseases, and an array of genetic abnormalities. It owns a chain of diagnostic centers across India, South Asia, Africa, and the Middle East. The company has spread its footprint across 20 Indian states and over 220 cities.

Peer Comparison

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.