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    Hitech Diagnostic's acquisition strengthens our balance sheet, consolidate leadership position: Metropolis

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    Hitech Diagnostic's acquisition strengthens our balance sheet, consolidate leadership position: Metropolis

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    Metropolis has completed the acquisition of Hitech Diagnostic Centre. This will help Metropolis consolidate its leadership position in Chennai, and Bangalore, as well as give it an entry point in the mid-market segment in the rest of Tamil Nadu

    Metropolis has completed the acquisition of Hitech Diagnostic Centre. Ameera Shah, Promoter and Managing Director at Metropolis Healthcare, discusses the contours of the deal.
    “We feel very comfortable that this is a healthy, solid, strong, fundamental business that we have acquired. Adding it to our portfolio, we have only strengthened our balance sheet,” she explained.
    Metropolis Healthcare is a leader in South India. “This acquisition helps us consolidate our leadership position, not only in Chennai, and Bangalore, but also gives us an entry point in the mid-market segment in the rest of Tamil Nadu,” she said.
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    According to her, healthcare is a very hyper-local business globally. “Therefore, while organic growth has been our biggest and most important strategy, inorganic growth is also an important part of moving forward,” she said.
    In terms of funding, she said, “The ratio will be Rs 336 crore in cash, which is from our internal accruals, and about Rs 300 crore in debt. We should be able to pay back this debt within two-three years.”
    Pre-COVID, Hitech had 28-30 percent margin profile, which has gone up during the COVID times. Metropolis had looked at this acquisition on the back of sustainable revenues and profits and is not pricing it or valuing it off the heightened COVID revenues and EBITDAs of 2020-2021 or 2021-2022.
    In terms of competition, she said, “The unorganized market is 85 percent, while the organized market is less than 15 percent. We should all keep our attention focused on that. It is a big market, there is enough space for all, and many pharma companies in the past had entered the diagnostic space. There is no guaranteed formula for success. Each one of us have to earn our credibility and trust from the customers. Any new entrant will have to go through the process.”
    For the full interview, watch the accompanying video.
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