Metropolis Healthcare sees strong Q4 performance driven by specialty and preventive testing push

Metropolis Healthcare has reported a robust performance in the fourth quarter, with strong growth across revenue, patient volumes, and profitability, supported by a clear shift in diagnostics demand toward speciality and preventive healthcare segments.Strong Q4 performance and full-year finishSpeaking on the quarterly results, C Surendran, MD, Metropolis Healthcare highlighted the company’s strong finish to the financial year.“We have had a very excellent quarter, quarter four and a grand end to the year. We have had 23 percentage revenue growth and the margins, of course, on the very high side, 70 percentage plus kind of margin growth we had in quarter four and we ended the year very well.”He attributed this performance to a combination of strategic focus areas and successful integration of recent acquisitions.“There are two or three things which is really helping us to get this kind of a growth. One, of course, our continuous focus on the speciality segment and our focus on the TruHealth, these two are segments which is growing faster than the company's growth. Now, this is definitely helping us to grow. And also, the integration that we have done of all the acquired entities, four entities we have acquired during the last 12 months and the acquisitions almost in the last phase, they all started performing well, that is helping us to grow.”Looking ahead, the company has laid out a steady medium-term growth path.“In terms of the guidance for the coming years, we definitely see that a revenue growth of 14 to 15 percentage CAGR is definitely possible in the next two-three years, that is what our estimate at this point of time and our margins will also come closer 27-28 percentage in the next two to three years’ time.”Demand shift toward speciality and preventive testingOn the demand environment, Surendran pointed to a clear structural shift in diagnostics consumption.“In fact, in the last two quarters, we have seen improved need for the high-end speciality testing and also like you know that we have launched the genomics testing in the last quarter and we have also seen very high uptake on the genomics testing.”He added that preventive healthcare continues to gain traction.“So, all the speciality segments is really doing well and also, the preventive health is another segment which is really seeing good amount of traction. So, the overall diagnostics is moving away from a concentration on the routine and semi-special testing to more of speciality and preventive healthcare kind of a testing, that is a real moment that is happening in the industry and that is really what is driving us the growth.”Margin expansion and operational efficiency gainsThe company’s sharp improvement in margins has been a key highlight over the past year. Surendran explained the structural drivers behind the expansion from around 18% last year to 25.5% currently, and confidence in further improvement ahead.He said three major initiatives have driven profitability gains.“See, three big initiatives have happened during this year. One, of course, at the end of last year we mentioned that our massive lab expansion has come to an end and now, it is time for us to go and bring in productivity from the labs that we already set up.”He added that operational improvements have significantly enhanced throughput.“So, our actions around improving the number of centres around each lab has really taken up very well and we are seeing a very good throughput coming and the productivity of each of the labs getting better and with no more new labs getting added, there is no erosion in the margins, that is one big step that we have taken.”Technology upgrades have also played a key role.“Second one is, we have really relook at our lab tech platforms, the platforms in which the testing happens. We looked at upgrading this platform, some vendor consolidations that we have done and we have also brought in the best of technology in the labs, that is really giving us improved mate