<ul><li>Metropolis is committed to expanding its reach, strengthening its portfolio, and driving sustainable growth.</li><li>Even though Reliance’s Netmeds is offering lower prices, Metropolis has strategically positioned itself to cater to the top end of the market, focusing on high-quality services and specialised tests.</li><li>Company plans to repay ₹40 crore outstanding debt by the end of this fiscal before it goes after new acquisitions. </li></ul> The one sector that did brisk business during the pandemic was diagnostics, as people queued up to get tested for Covid. As the healthcare sector’s capacity came under enormous strain, new players entered the <keyword id="10985234" type="General" weightage="60" keywordseo="diagnostics-sector" source="Orion">diagnostics sector</keyword> to capitalise on the boom, as Indians became more conscious about health and wellness. The stocks of these companies have also rallied between 25-35% in the last six months, even though competitive intensity has sharply risen with new players entering the sector. Business Insider caught up with <keyword id="584350" type="General" weightage="70" keywordseo="ameera-shah" source="Orion">Ameera Shah</keyword> promoter and Managing Director of <keyword id="178996" type="General" weightage="80" keywordseo="Metropolis-Healthcare" source="Orion">Metropolis Healthcare</keyword> along with the company’s CEO <keyword id="15740822" type="General" weightage="40" keywordseo="Surendran-Chemmenkotil" source="Orion">Surendran Chemmenkotil</keyword> to understand if the sector is still in the pink of health after the pandemic. Typically, private equity investments in a sector and increased competitive intensity inevitably leads to a price war, but Shah says Metropolis has strategically positioned itself to cater to the top end of the market, focusing on high-quality services and specialised tests. In a recent interview with BI India, Shah shed light on the impact of competition in the sector and the company's future plans to create more value for customers and investors. Despite all the noise around new age tech players that are doing a lot of bundling of tests at significantly lower prices, Shah says, Metropolis is committed to expanding its reach, strengthening its portfolio, and driving sustainable growth. Impact of Competition in the Diagnostic Sector Competition in the diagnostic sector has been steadily increasing since 2010, with the first private equity investment occurring in 2006. As the industry started to grow, more private equity companies began investing, and numerous new players entered the market. To compete effectively, many local and regional players have resorted to price competition, leveraging lower prices as a means to attract customers. While this has led to a decline in net prices, the distribution margin has increased. Shah emphasises that Metropolis has chosen to focus on the top hospitals, doctors, and corporates as its core customer base, thereby targeting the top end of the market. By providing the best infrastructure, technology, pathologists, and logistics, Metropolis has established itself as a trusted partner for these high-end customers. However, Shah highlighted that talent scarcity was a significant challenge in the sector till recently and attrition rates were high. Furthermore, the entry of tech players during the COVID-19 pandemic, offering home services, temporarily disrupted the market. However, the demand for home services has declined post-pandemic, affecting these tech companies. Shah also mentioned that certain healthcare and non-healthcare companies have set up diagnostic chains, primarily focusing on the lower-margin segment of the market. In contrast, Metropolis remains committed to its high-touch model, prioritising customer needs and human expertise. In its latest quarterly analysis, Kotak Institutional Equities says that the worst of the pricing-led competition in diagnostics is behind the industry, but it is still far from a benign pricing environment. Reliance’s Netmeds has upped the ante in the last few months with pricing now 25-65% lower than Tata 1mg and other national incumbents, respectively. KIE says that after dropping prices in Delhi NCR by 15% in 1QFY24, seemingly on an experimental basis, Metropolis has raised prices in 2QFY24. Its pricing remained largely unchanged in other cities. Metropolis' Future Plans: Metropolis has outlined several strategies to drive growth and maintain its position as a leader in the diagnostic sector. The company aims to increase its reach by opening new labs and service centres, with a target of establishing 90 labs within 30 months. Already having added 30 labs, Metropolis plans to add another 60 in the near future. Additionally, the company plans to expand geographically, both deeper in existing markets and wider in new geographies. Metropolis has 180 labs in all and the company has added 45 ew labs in the last one year and will be adding another 45 labs in the coming months. It has 3700 collection centres every year it plans to add 700 new centres. Explaining the company’s growth plans, Surendran Chemmenkotil says:“We plan to increase reach by opening new labs and service centres. We are strong in the West and South. Expansion geographically is one key strategy to grow. We will go deeper in our existing markets and wider in new geographies. We want to increase wellness revenue in the coming years. Once a consumer takes a wellness package, quite likely they will keep coming back from more, which will help build a sustainable revenue stream.” Recognizing the potential of wellness services, Metropolis aims to increase wellness revenue from the current 14% to 20% in the coming years. By offering comprehensive wellness packages, the company aims to build a sustainable revenue stream, as customers who opt for wellness packages are likely to return for further services. Metropolis also continues to strengthen its portfolio of specialised tests by engaging with specialty doctors and adding new tests, including genetic testing for critical illnesses. Despite the challenges posed by the accelerated rate of expansion, Metropolis remains confident in its financial performance. Explains Shah: “While margins have slightly declined, primarily due to the opening of new labs, the core EBITDA remains unaffected. We plan to repay Rs 40 crore debt we have on our books by the end of this year.” The company is not just content expanding across new and existing markets, it is also on the lookout for <keyword id="30334" type="General" weightage="40" keywordseo="acquisition" source="Orion">acquisition</keyword>s to boost market-share. The company's robust cash flow allows for debt repayment and provides opportunities for potential acquisitions. Says Shah: “We have debt of Rs 40 crore from the acquisition of Hitech Diagnostics, which we will repay by end of fiscal. Our free cash flows after that will be available for potential acquisitions. While large deals are available right now in the market, we will not look at them.” If Metropolis continues to focus on the top end of the market by expanding its portfolio of specialised tests, it will not have to enter into a price war with new age players with deep pockets.

Metropolis on the prowl for acquisitions as sector's competitive intensity eases

Roshni Nadar, Divya Gokulnath, Ameera Shah and Vinati Saraf — India’s most powerful businesswomen of 2020, according to Forbes

<img class="gwt-Image" src="/photo/51923101.cms" /> Metropolis <keyword id="6354525" type="COMPANY" weightage="60" keywordseo="Healthcare">Healthcare</keyword> is one among the top 3 diagnostic chains in the country. It claims to deliver over 15 million tests a year and to serve over 10,000 Laboratories, Hospitals, Nursing homes and 2,00,000 Consultants. 
 
It’s also the country’s only multinational chain of diagnostic centres with presence in UAE, Sri Lanka, South Africa, Kenya, Mauritius and Ghana. It processes over 4500 varieties of tests and employs over 3500 people. 
 Business Insider sat down with current Managing Director and CEO <keyword id="584350" type="UNKNOWN" weightage="80" keywordseo="Ameera-Shah">Ameera Shah</keyword>, to discuss the Indian <a href="http://www.businessinsider.in/searchresult.cms?query=healthcare+space&amp;sortorder=effectivedate">healthcare space</a> and the future of upcoming <a href="http://www.businessinsider.in/searchresult.cms?query=healthcare+startups&amp;sortorder=effectivedate">healthcare startups</a>. 
 
How’s India similar to other SE Asian markets you’re in? 
All these markets have something in common – <a href="http://www.businessinsider.in/searchresult.cms?query=health+insurance&amp;sortorder=effectivedate">health insurance</a> hasn’t penetrated here in a big way, so people are paying out of their pockets. 
 
That changes the dynamics of the market. Doctors are more careful before prescribing tests, and patients are more careful of the pricing. Here patients become the decision-maker. That’s why convenience is of supreme importance. 
 
We’re seeing double digit growth rate (10-13%) in emerging markets as compared to developed markets in Europe and America which see single digit growth. 
 
Is affordability still the key factor in emerging markets? 
Quality is the number one parameter, affordability comes next. The third one is convenience, and the fourth emerging factor is consumer experience. As education levels rise, people expect a level of hospitality. 
 
Market Size for Diagnostics in India. 
The market is currently $ 5-6 billion, and the top 3 players have managed to get only 10% of the total market. Over time we’ll see that changing. 
 
In the US, 40% of the market is held by the top 3 players, and that’s because of <a href="http://www.businessinsider.in/searchresult.cms?query=health+insurance&amp;sortorder=effectivedate">health insurance</a> penetration. 
 
How do you strike a balance between the latest tech and still make it affordable? 
In the western world people talk about how technology can help reduce cost. In India, manual labor is cheaper. 
 
When it comes to the latest tech, we don’t compromise. However, if something doesn’t affect the quality of the report we choose manual. 
 
Do you see <keyword id="3172082" type="UNKNOWN" weightage="60" keywordseo="healthcare-startups">healthcare startups</keyword> being sucked into the mainstream anytime soon? 
Startups are happening in two main areas – medical devices and mainly IT, with aggregators and the likes. 
 
In medical devices there still hasn’t been a startup that has revolutionized laboratory methods. In the IT space, it’s primarily in the <a href="http://www.businessinsider.in/searchresult.cms?query=preventive+healthcare&amp;sortorder=effectivedate">preventive space</a>. That’s not working in a large way because in healthcare people go with a brand they trust, and they don’t want a new brand that’s coming out of nowhere. There’s some traction because of deep discounting, but how they’ll sustain in the long term is anybody’s guess. 
 
So aggregators may not claim a big part of your business anytime soon? 
Not at all. 
 
The assumption is that once <a href="http://www.businessinsider.in/searchresult.cms?query=Practo&amp;sortorder=effectivedate">Practo</a> and the likes make inroads into doctors’ clinics, they can tell the doctor where to send the patient for diagnostics. However, these are <a href="http://www.businessinsider.in/searchresult.cms?query=IT+software&amp;sortorder=effectivedate">IT software</a> companies, but the Doctor will send a patient to a hospital based on his medical knowledge. 
 
What happens with services like these is that patients search for doctors like a directory of services. However, there’s no quality listing. 
 
Patients still go by word of mouth versus a recommendation by an IT app. 
 
Unless the quality listing comes into play, its difficult, and that raises a 2nd question – how will they determine what is a good doctor from a bad one. Doctors/Diagnostic chains can’t be rated by stars or quantifiable parameters. 
 
How they’ll make these lists is a little bit of a question mark. 
 
What kind of a startup can help you take a leap into the next stage of your expansion? 
At this point, I don’t see a model. Rather, we can help startups. 
 
They are absolutely new in healthcare, and they don’t have either the track record, or the brand value that doctors trust. There is an asymmetry in consumer education in India. 
 
More work on consumer education might be helpful for brands like us. 
 
Do you see the word-of-mouth recommendation model changing anytime soon for healthcare? 
There are no alternatives. 
 
You rather believe a distant niece, nephew or cousin who’s been to the clinic rather than a random website where you don’t know how they’ve done the listing. You’re going to believe a website basis what! 
 
People don’t want to take chances with their health. That’s the biggest barrier for any new player, and also what protects the industry. 
 
Any plans for an IPO? 
I don’t see anything in the next 6 months. 
 
Our industry is seeing great valuations in the public market, and as a company which has built a presence, it’s a very good opportunity for us if we do decide to go public.

Exclusive: ‘You’re going to believe a website
basis what!’ : In conversation with Metropolis MD-CEO
Ameera Shah

New Delhi, June 24 () Diagnostic services provider Metropolis Healthcare on Wednesday said that a promoter has divested 6.03 per cent stake in the company for Rs 422.58 crore. The company in an exchange filing said "a member of the promoter group of the company has divested 30,54,545 equity shares of the company constituting 6.03 per cent of the issued and paid-up share capital of the company through a bulk deal transaction on the stock exchanges today". It further said that shares of the company have been sold at a price of Rs 1,383.44 per equity share. The proceeds from this divestment are intended to be used for substantial repayment of the loan availed by Metz Advisory LLP, the company said. "We believe that the reduction of pledge of equity shares by Metz Advisory LLP, Ameera Shah, Sushil Shah and Duru Sushil Shah by substantial repayment of the loan availed by Metz Advisory LLP, is in the overall interests of all the stakeholders," the filing said. "We have sold a small part of our holding today, in line with our commitment to bring down debt and associated pledges at the promoter and promoter group level," Metropolis Healthcare Promoter and MD Ameera Shah said. Shares of Metropolis Healthcare Ltd closed at Rs 1,398.85 per scrip on the BSE, down 3.69 per cent from the previous close. AKT MKJ

Metropolis Healthcare promoter offloads 6.03% stake for Rs 422.58 crore

<ul><li>The state-owned ONGC said the fire at its Surat plant is now under control.</li><li>No casualty or injury has been reported in the incident. </li><li>Watch the video showing massive flames at the ONGC’s Surat plant.</li></ul>A massive fire broke out in Hazira-based gas processing plant of Oil and Natural Gas Corporation (ONGC) in Surat in the early hours of Thursday. The blaze, which was preceded by three blasts, has been extinguished, the official said, adding no one was hurt. The blaze was massive and could be seen from a distance of several km, eyewitnesses said. Some also posted videos of the explosions and the fire on social media. <div type="twitter" handle="ONGC_" handlename="ONGC" image="http://pbs.twimg.com/profile_images/1250694992252727296/DqOt5m01_normal.jpg" favoritecount="182" retweetcount="45" status="A fire was observed in the Hazira Gas processing plant in the morning today. Fire has been brought under control. T… https://t.co/xQJ2a85M9Z" createdat="1600912827000" id="1308949385473032192"></div> "The fire broke out in the inlet gas terminal after three massive blasts at 3.05 am. The compressed gas was depressurised to bring the fire under control," Surat District Collector Dhaval Patel said. <div type="twitter" handle="ANI" handlename="ANI" image="http://pbs.twimg.com/profile_images/1497864299/ani_mic_logo_normal.jpg" favoritecount="149" retweetcount="48" status="#WATCH Gujarat: A fire breaks out at an Oil and Natural Gas Corporation (ONGC) plant in Surat. Fire tenders present… https://t.co/JS0p9k0rJ0" createdat="1600901995000" id="1308903952973520897"></div> Fire vehicles of the ONGC, Surat Municipal Corporation and local industrial units rushed to the spot and brought the blaze under control, he said. The inlet gas terminal where the fire broke out was cordoned off and the plant secured, he said, adding the cause of the fire will be ascertained after cooling operations are completed. No other industry in the area was affected, he said. There was no confirmation from the district administration of reports that the fire was apparently caused by a rupture in the 36-inch Uran-Mumbai gas pipeline. The ONGC in a tweet said, "A fire was observed in the Hazira Gas processing plant in the morning today. Fire has been brought under control. There is no casualty or injury to any person." "Fire has been completely extinguished. Efforts are being made to resume normal operations at the earliest," it said in another tweet. (with inputs from PTI) SEE ALSO: <a href="https://www.businessinsider.in/careers/news/yes-bank-is-hiring-again-for-the-coming-year-after-workforce-shrinks-by-1000-since-march/articleshow/78287419.cms" data-type="tilCustomLink">EXCLUSIVE: YES Bank's workforce shrank by 1,000 employees since March but now it's hiring again for the coming year</a> <a href="https://www.businessinsider.in/business/news/list-of-indias-most-powerful-business-women-of-2020/slidelist/78277386.cms" data-type="tilCustomLink">Roshni Nadar, Divya Gokulnath, Ameera Shah and Vinati Saraf — India’s most powerful businesswomen of 2020, according to Forbes</a>

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Metropolis on the prowl for acquisitions as sector's competitive intensity eases

Malini Bhupta

Roshni Nadar, Divya Gokulnath, Ameera Shah and Vinati Saraf — India’s most powerful businesswomen of 2020, according to Forbes

BI India Bureau

Exclusive: ‘You’re going to believe a website basis what!’ : In conversation with Metropolis MD-CEO Ameera Shah

Saikat Pyne

Metropolis Healthcare promoter offloads 6.03% stake for Rs 422.58 crore

PTI

Massive fire at ONGC’s Surat plant, no casualties reported

Navdeep Yadav