A brokerage house has expressed confidence in a leading company linked to the healthcare sector. According to the report, the company's management has a positive outlook for the coming quarters. Due to better growth prospects, a b order book, and efficient operational management, the brokerage has maintained its BUY rating on this stock.
Metropolis Healthcare, a well-known diagnostics company in the healthcare sector, has once again come into focus for investors. Brokerage firm MK Global recently met with the company's top management and maintained its positive view on the stock. Keeping a 'BUY' rating on the company, a target price of ₹2050 has been set for the stock, which is approximately 18 percent higher than the current market price.
Share movement, investors' focus on Metropolis
On July 4, Metropolis Healthcare's share started trading at ₹1736.50. During the trading session, it climbed up to ₹1785. Currently, the share is trading around ₹1735. In the last one week, the share has seen a rise of about 5 percent.
The company's 52-week high was ₹2306.85, while the low was ₹1383.70. Its market capitalization is over ₹9158 crore, which makes it special among midcap healthcare companies.
Brokerage's confidence in management's growth planning
MK Global recently held a meeting with Amira Shah, the promoter and executive chairperson of Metropolis Healthcare. The company's current situation and strategy for the coming years were discussed in detail in the meeting.
Management says that the company is working to achieve 12 to 13 percent organic growth in the next 2 to 3 years. For this, focus is being given to expanding the collection center network and the complete utilization of existing labs.
Expansion will also be done through acquisitions
Not just organic, Metropolis Healthcare is also focusing on inorganic growth. The company is paving the way for growth through revenue benefits and cost control from recent acquisitions.
The management said that their aim is to reduce infrastructure overlap, which will reduce operating costs and improve margins. This strategy can further strengthen Metropolis' financial position in the long run.
Improvement will be seen in the margin
According to the report of MK Global, the impact of the company's efforts can be clearly seen by FY26. The report states that the EBITDA margin of Metropolis Healthcare may increase by approximately 100 basis points in FY26.
The company is currently working towards controlling costs and making better use of existing resources. The brokerage believes that these steps can be beneficial for the shareholders.
How much will the game change with Amazon's entry
There is a discussion in the market regarding the entry of Amazon and other tech companies into the diagnostic sector. But the management of Metropolis is full of confidence in this matter.
The company says that healthcare is not a general service that any company can easily enter. Expertise, experience, and brand value are needed in this field.
The management also said that many companies have tried to enter this field before, but they have achieved limited success. They did not affect experienced players like Metropolis.
Target price and valuation
The target price set by MK Global for Metropolis Healthcare is based on DCF (Discounted Cash Flow) valuation. This target is set at 45x P/E multiple of FY27E.
This report says that the company's current strategy, customer trust, and long-term focus make it capable of reaching this target.
