Metropolis Healthcare expansion and TruHealth mix support margin-led earnings growth

Investment View and Valuation

Kotak Securities Private Client Group’s August 28, 2026 company update on Metropolis Healthcare retains an ADD recommendation. The report sets a 12-month fair value of Rs 655 against a current market price of Rs 576.

Kotak’s positive view is based on expected growth from network expansion, deeper penetration in Tier III markets, traction in specialty testing and TruHealth, and a gradually improving margin profile.

Network Expansion and Market Growth

Metropolis Healthcare plans to increase its owned-centre network from 750 to 1,000 centres over the next three years. Management also plans to establish 100 mini hubs over the same period and offer allied services. Kotak expects these actions to increase customer engagement and support business-to-consumer growth.

The company is seeing improving traction in Tier III markets, which account for about 26 per cent of sales, while North India has become its fastest-growing region. Metropolis Healthcare also remains open to inorganic opportunities that could extend its geographical reach and capabilities.

Growth and Margin Outlook

Management continues to guide for 14-15 per cent year-on-year sales growth in FY27E, supported by stronger positioning in specialty services, a higher TruHealth mix and improving throughput. Management is targeting EBITDA margin expansion of 100-150 basis points in FY27E.

Kotak forecasts about 19 per cent EBITDA CAGR and about 26 per cent EPS CAGR for FY26-29E. Its expectation of approximately 300 basis points of EBITDA margin expansion over FY26-29E is supported by the increasing maturity of the expanded network, a better margin profile in the Core business, cross-selling and optimisation. Kotak also cites traction across both business-to-consumer and business-to-business channels as support for its outlook.

Key Risks and Investment Dependencies

The report’s stated negative is Metropolis Healthcare’s FY26 dividend yield of 0.3 per cent. The investment case is therefore dependent on successful execution of the planned owned-centre and mini-hub rollout, sustained specialty and TruHealth traction, ongoing Tier III growth, and delivery of the guided sales growth and margin improvement.

The report does not provide detailed reported quarterly financial results or a detailed valuation methodology.