Letter from the Managing Director

We are enhancing diagnostic value with innovative testing to bring greater trust and confidence to healthcare. And by co-creating new values with our stakeholders, we strive to contribute to the development of healthcare and the healthy lives of people.

Dear Shareholders,

Since the novel coronavirus disease (Covid-19) broke out in 2020, mutant strains have continued to emerge, and it is unclear when the pandemic will abate. Covid-19 tested us yet again in 2021, and we once again rose to the challenge. We met the pandemic head-on with our evolved strategies. Amid this ongoing crisis, many people are doing their utmost to protect and maintain the essential health services and systems. I offer my heartfelt thanks to everyone working on the front lines of this pandemic.

The Indian Diagnostics sector has been one of the fastest-growing service segments in the Indian healthcare space. With India witnessing three waves of the Covid-19 pandemic and the fact that people with existing comorbidities were at a higher risk of dying from the pandemic, there was a phenomenal rise in demand for diagnostic testing. Emerging self-care trends have been driving a large number of people to go for preventive checks on a periodical basis. This phenomenon is likely to continue over a longer period of time as people become more cautious and increasingly receptive to the need to have regular health examinations. With this change in consumer behaviour, the ease of getting diagnostic tests done from home has also improved significantly with trained technicians coming for home sample collections, with better coverage and turnaround time.

The rigors of the pandemic environment have helped highlight all the strengths that make us such an enduringly successful company. The continual shifts and disruptions to normal business patterns — supply chain functioning, fluctuating demand, workplace operations — require companies to be resourceful and adaptable, with the ability to anticipate, improvise, and draw on deep reserves of experience, relationships, and know-how. Our over four -decade-long heritage and experience with the right blend of values have underpinned our efforts in tackling these issues.

Financial Performance

FY 2021-22 was an exceptional year with Covid-19 income contributing 16% of the top line. Our non-Covid-19 business grew at a robust 35% year-on-year in FY 2021-22. Despite the turbulent environment, I am very pleased to share that our Company recorded our highest-ever revenue, EBITDA and PAT during FY 2021-22. Revenue increased by 23% year-on-year to 1,228 Crores, EBITDA before CSR and ESOP increased by 20% year-on-year to 362 Crores and PAT increased by 17% year-on-year to 215 Crores. FY 2O21-22 has truly been a transformational year for the industry. I am glad to share that we progressed as per our strategic goals during the year to make Metropolis a stronger, more agile, and higher value-creating organization.

Our digitalizing strategies are centered around using convenient devices and bettering services for efficient management. This eventually results in cost optimization, patient footfall management, and timely diagnosis without compromising quality.

Digital Presence and Engagement

We have improved brand and service discover across all our digital platforms, like Google search, social media to reach maximum customers. We have been offering an omni-channel experience to all our customers across all digital touch points like Website, App, Chatbot, WhatsApp and IVR. We have upgraded and launched our Mobile Patient App by adding new features like quick home visit booking, track phlebotomist, rating of phlebotomists, test recommendations and so on. We have built various robust digital platforms to engage with our stakeholders such as B2B partners, aggregators and doctor partners. On the business impact front in FY 2021-22, we have witnessed 173% increase in digital users year-on-year, faster growth in home visit revenue, 151% increase in website views yearon-year and 61% increase in digital driven revenue.

Key achievements

  • Built a stronger senior and middle management team to capitalize on the market’s growth opportunities with a clear and more focused approach
  • Established and strengthened the distribution network of Patient Collection Centers across the country and extended Home Visit Coverage to 100+ locations
  • Visualized and started the process of building a new API-led tech architecture for future readiness to enable us to seamlessly work with industry’s all players, including the Government and insurance companies
  • Engaged with healthcare startups and health aggregators to cater to the new market of budget wellness, reaching out to customers through digital platforms
  • Strengthened our services and quality and created new ways of engaging with doctors and customers through initiatives such as: Rolling out ‘MetroBot’ to engage with the medical community via online and offline mediums; and launching a ‘Partner Platform’ for our B2B partners and franchisors to get ready access to services from Metropolis
Our M&A strategy revolves around acquiring high-quality, profitable B2C businesses with a scientific approach to diagnostics. We will continue to evaluate such high-quality profitable and scalable opportunities and take a pragmatic view on M&A.

I am delighted to share that our acquisition of Hitech Diagnostic Center is one of the key milestones in the last financial year. As per our growth strategy, this acquisition will enable Metropolis to gain market share, strengthen our leadership position in the Southern India market and increase our share in B2C business. Currently, in Chennai, we have 400-500 tests and plan to add another 100-200 tests to the list. We anticipate that this acquisition will enable Metropolis to cater to the market’s mid-segment while leveraging scale benefits.

Acquisition Synergies

  • Strengthening the Leadership Position:
    Through Hitech Diagnostics’ acquisition, we will strengthen our position as the 2nd largest diagnostics company in India and the largest brand in Southern and Western India
  • Increased B2C Contribution in Focus Cities:
    Hitech Diagnostics – a focused B2C player with 65% revenue contribution from B2C business – will enable Metropolis to increase our B2C business in focus cities of Chennai and Bengaluru. Thereby, enhancing our direct-to-customer business
  • Deeper Penetration in Mid-segment of the Market:
    Metropolis is focused on the market’s premium end. We also anticipate accessing the market’s mid-segment, primarily catered to by Hitech. Thus, expanding our addressable market size
  • Enhance Profitability through Revenue and Cost Synergies:
    We expect to enhance our revenue through the product offerings of our combined businesses, improve customer experience and achieve cost synergies. We anticipate achieving this through optimization of operational costs in procurement, better efficiencies in supply chain, administration and support resource, laboratory network and back-office infrastructure

Our Way Forward

  • Focus on Network Expansion:
    As part of our ongoing 90:30 expansion plan outlined in the last year FY 2O20-21, we will target 100-200 Indian cities and laboratories in at least 70-80 Indian cities and collection centers in 225 cities. Thereby, catering to people through different patient service networks
  • Continued Strengthening of Acute Illness Business:
    Over the years, Metropolis’s major focus has always been on the 6% of acute illness patients, the ones that doctors highly recommend. We enjoy a significant brand equity among the healthcare community and are renowned for delivering quality, accurate and reliable reports. Our goal for FY 2O22-23 is to further strengthen the acute illness business segment by penetrating in tier 2 and tier 3 cities
  • Creating a Category for Chronic and Wellness Testing for Growth:
    The industry has undergone several structural changes and consumers’ behavioural changes towards health to a significant extent. With people growing more health conscious, our goal is to focus on the 100% of the population, including chronic and wellness patients. We aim to target our country’s population by offering wellness packages at good price points, and loyalty programs, among others. Digitization and automation, home testing services and stakeholder engagement will further complement our efforts in building this growth segment
  • Strengthening Scientific Reputation & Medical Engagement:
    At Metropolis, we will continuously engage with clinicians and Healthcare industry associations through different networking platforms. With the support of automation and digitization, we facilitate smart reports to clinicians for better and effective clinical decisionmaking. In addition to this, we will continue to host a series of CMEs, webinars, and round table meetings to share and exchange information and latest trends on diagnosis and testing

I would like to conclude by expressing my gratitude to our valued customers and shareholders for their loyalty and continued support and to the Metropolis team for their consistent hard work and dedication during the year. Finally, I would like to use this opportunity to thank all the members of the Board of Directors for their invaluable leadership and deep insights through their wide-ranging experiences

Sincerely,

Ameera Shah

Managing Director