Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessCompanies

Metropolis Healthcare MD sees strong FY22 as COVID tests surge, other tests undented

Metropolis Healthcare is planning to expand its network and remains optimistic about sustaining the strong performance it reported in FY21. Non-COVID testing remains strong unlike the disruption caused by the complete lockdown last year.

June 01, 2021 / 04:24 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Metropolis Healthcare, one of India’s largest diagnostic chains, expects strong performance in FY22 as the number of tests for COVID-19 has surged in the first quarter of the fiscal, while testing for other diseases remains strong, its Managing Director Ameera Shah said.

"In terms COVID-19 business for diagnostics, I would say the maximum number of tests have been in this wave. Non-COVID-19 testing has not been as bad as last year when it was impacted, particularly in the first quarter, because of complete lockdown patients were not leaving their house, even for medical care, which is not the case now," told Moneycontrol in an interview.

"So, I think the system has matured from that perspective. Lockdown is matured. So, there is some dent of non-COVID testing but not very significant," Shah said.

The price of RT-PCR tests, an important revenue stream for the company, has dropped 80 percent from Rs 4,500 last year to about Rs 1,000 now, but Shah said volumes had increased and the company had the capacity to test 25,000 samples a day.

"Prices have kept coming down so realizations are low but obviously volumes are higher. So it's about you know which organizations have the capacity and capability to do large volumes and there are very few of us who have capability to do large numbers of tests. I think from that perspective you have to work very hard on your costing and efficiency to be able to make some sort of break-even profit at the current prices. Because we are large and efficient, we are able to find the way," she said.

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

COVID-19 testing has benefited Metropolis as 8 lakh new customers used services of the diagnostic chain for the first time COVID tests. Ten percent of those customers began using non-COVID tests offered by Metropolis Healthcare in H2FY21, and the company expects higher conversions in future.

"In FY21, if you look at the reported EBITDA margin, it is 28.9 percent, if you look at the normalized it is 30.1 percent. In FY22 I think we should be able to sustain or do better than that," Shah said.

In FY21 the company’s revenue rose 17 percent year on year to Rs 998 crore, while net profit was up 44 percent at Rs 183 crore in FY21. The number of tests fell 3 percent to 19 million.

Expansion plans

Metropolis will expand testing capacity by 30-35 percent across its existing network including one global and 13 regional reference labs, 90 testing laboratories and 1,800 collection centres. This will be done in the next three years with a capex investment of Rs 35 crore.

"We will do a rapid expansion of brick and mortar labs, and along with that we also expand our home services business. Our home services network is in 60 cities, we are planning to expand to 100 cities," Shah said.

Shah said the company was scouting for selective buyouts of pathology labs to expand further in regions where it is already present and fill the vacuum in states such Madhya Pradesh, Maharashtra, Gujarat, Uttar Pradesh, Orissa, Jharkhand, Telangana and Andhra Pradesh.

Metropolis is a zero-debt company with growing cash and cash equivalents year on year basis. Cash and Cash Equivalents as on Mar 2021 stood at Rs 428 crores.

Metropolis recently acquired South India-based Hitech Diagnostics for Rs 511 crore.

Hitech Diagnostics has a network of 31 laboratories including 3 NABL and ICMR accredited laboratories and 68 collection centres strategically spread across the states of Tamil Nadu, Karnataka, Kerala, Andhra Pradesh and the Union Territory of Pondicherry.

Viswanath Pilla
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Jun 1, 2021 04:24 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347