Broker’s call: Metropolis Healthcare (Add)

Metropolis will acquire and operate on a slump sale basis the pathology and radiology businesses of DAPIC
| Photo Credit:
gevende

Target: ₹2,250

CMP: ₹1540.65

Metropolis Healthcare Ltd (MHL) announced the acquisition of Dehradun-based Dr. Ahujas’ Pathology and Imaging Centre to build a robust and regionally diverse network across North India.

MHL announced that its subsidiary, Metropolis Histoxpert Digital Services Pvt. Ltd (100 per cent owned), will acquire Dehradun’s leading diagnostic chain – Dr. Ahujas’ Pathology and Imaging Centre (DAPIC). The acquisition is aimed at building a robust and regionally diverse diagnostic network across North India.

Metropolis will acquire and operate on a slump sale basis the pathology and radiology businesses of DAPIC (a partnership firm); Dr. Alok Ahuja’s sole proprietorship firm; and Dr Alka Ahuja’s sole proprietorship firm situated at Dehradun, Uttarakhand. The transaction is expected to be completed within 45 days.

The consideration for the acquisition will be in cash at ₹35 crore which is at about 3x of FY24 sales. We understand the transaction is at a reasonable valuation.

MHL’s acquisition of DAPIC is in-line with its strategic vision of acquiring and scaling strong B2C brands in north Indian cities.

We understand the acquisition will help to accelerate expansion across Uttarakhand – a high growth market with significant potential. We maintain our ADD rating on MHL with a target price of ₹2,250.

Downside risks: Slowdown in patient volume & inability to generate synergy benefits from the acquisitions.

Published on April 8, 2025