Metropolis Healthcare Ltd Management Discussions

GLOBAL ECONOMY

The global economy navigated a challenging environment in 2024, shaped by shifting geopolitical dynamics and changing market patterns. It expanded by 3.3% year-over-year, indicating steady though moderate growth. Advanced economies posted a 1.8% increase, while Emerging Market and Developing Economies (EMDEs) showed continued resilience with a 4.3% rise. The US economy held firm, supported by a strong labour market and strong domestic demand. In contrast, the Eurozone grappled with structural hurdles, particularly in energy-intensive industries. India and Southeast Asia stood out, driven by robust domestic consumption, digital advancements and infrastructure development. Chinas recovery faced obstacles, including a slowdown in the property sector and softer external demand. The health of the global economy and the strength of healthcare systems were deeply interconnected, as economic stability drove healthcare investments, while robust healthcare underpinned workforce productivity and economic growth.

World Economic Outlook Growth Projections

Particulars	2023	2024	2025	2026
Global Economy	3.3	3.2	2.8	3.0
Advanced Economies (AEs)	1.7	1.7	1.4	1.8
Emerging Markets and Developing Economies (EMDEs)	4.4	4.2	3.7	3.9

Source: IMF April 2025 Report

The global economic outlook for 2025 presented a blend of challenges and opportunities, influenced by evolving trade dynamics and shifting policy landscapes. Advanced economies were expected to achieve their inflation targets earlier, while Emerging Market and Developing Economies (EMDEs), notably China and India, were projected to sustain healthy growth momentum. However, the imposition of new tariffs by the US and corresponding retaliatory measures introduced fresh risks to global trade, with the potential to elevate inflation and temper growth. Global GDP is expected to grow by 2.8% year-on-year in 2025 and by 3.0% in 2026, signalling a gradual moderation compared to the stronger pace observed over the previous two years. Growth in advanced economies was projected at 1.4% in 2025 and 1.5% in 2026, indicating a period of moderate expansion, while EMDEs were expected to deliver more robust growth of 3.7% and 3.9% respectively. Despite the uncertainties, technological advancement and supportive policy measures were anticipated to underpin economic resilience. In this evolving landscape, the strength and resilience of healthcare systems remained equally critical, playing a pivotal role in safeguarding human capital and sustaining economic productivity.

INDIAN ECONOMY

India ranks as the worlds fifth-largest economy by total Gross Domestic Product (GDP), mirroring its expanding role in the global economy. However, uncertainty surrounding the national elections in early FY 2024-25, combined with weather-related setbacks that affected construction and manufacturing in the following quarter, led to a softer-than-expected performance in gross fixed capital formation. Even with these headwinds, India has continued to demonstrate resilience, supported by robust macroeconomic conditions and an emphasis on sustainability and innovation throughout FY 2024-25. According to the Ministry of Statistics and Programme Implementations (MoSPI) second advance estimates, real GDP is projected to grow by 6.5% year-on-year in FY 2024-25, following a 9.2% increase in FY 2023-24.

On April 9, 2025, the Reserve Bank of Indias Monetary Policy Committee (MPC) unanimously voted to reduce the repo rate by 25 basis points, lowering it from 6.25% to 6.0%. This move is intended to improve liquidity and support economic activity. The last rate adjustment occurred during the February 2025 policy meeting, where repo rate was reduced from 6.5% to 6.25%. Despite the reduction, the MPC retained its "accommodative" stance, signalling flexibility to respond to evolving economic and market conditions. Consumer Price Index (CPI) inflation eased to 4.9% in FY 2024-25, down from 5.4% in the previous year and is projected to decline further to 4.0% in FY2025-26.

Indian Economy GDP Growth Rate (in %)

Year	GDP Growth Rate
FY2021-22	8.7
FY2022-23	7.6
FY2023-24	9.2
FY2024-25*	6.5
FY2025-26P#	6.5

Source: *MOSPI NSO Report dated January 7, 2025 #RBI MPC report dated April 9, 2025

OUTLOOK

Going forward, household consumption is expected to remain firm, supported by tax relief announced in the FY 2025-26 Union Budget. Fixed investment is also set to rise, driven by higher capacity utilisation, stronger bank balance sheets and the governments continued emphasis on capital outlays.

The FY 2025-26 Union Budget earmarked 1.5 trillion in 50-year interest-free loans to states, aimed at advancing infrastructure projects across roads, urban development and industrial expansion. With an emphasis on self-reliance, adaptability and alignment with global trends, India is well placed for stable economic growth. The Reserve Bank of India forecasts GDP growth at 6.5% for FY 2025-26, supported by flagship initiatives such as "Make in India", major infrastructure investments and ongoing structural reforms that continue to strengthen competitiveness and long-term expansion.

INDIAN HEALTHCARE INDUSTRY

Indias healthcare sector stands at the cusp of a transformative phase in FY 2024-25, driven by a combination of increased public and private investments, progressive policy reforms, and demographic shifts. Healthcare expenditure in India is expected to grow from 3.3% of GDP to 5% of GDP by 2030, as projected by CareEdges April 2025 report.

The governments strategic focus on strengthening healthcare systems is clearly reflected in its FY 2025-26 budget, with a particular emphasis on capacity building to boost the healthcare ecosystem. In this budget, the Ministry of Health and Family Welfare has been allocated 99,859 crore, an 11% increase over the revised estimates for FY 2024-25. The National Health Mission (NHM) received 37,226.92 crore, while the National Mental Health Programme was allocated 79.6 crore. Autonomous bodies were granted 20,046.07 crore. Additionally, the government has exempted Basic Customs Duty on 36 new drugs, aiming to improve the affordability and accessibility of advanced treatments.

A significant highlight is the allocation of 650 crore under the Digital Health Mission, reinforcing the governments commitment to creating an integrated digital health ecosystem. The rollout of Ayushman Bharat Digital Mission (ABDM) is expected to enable seamless access to electronic health records, promote data-driven clinical decision-making, and enhance transparency and efficiency in healthcare delivery.

The increasing proportion of the population aged over 45, coupled with steady income growth, is expected to generate sustained demand for quality healthcare services. This growing demand is anticipated to drive investments across the healthcare value chain, including medical education, hospital infrastructure development, and digital health technologies. Noteworthy developments during FY 2024-25 include the doubling of medical seats, expansion of health insurance coverage, and the continuous addition of hospital beds, which are essential to building a resilient healthcare system. Between FY 2025-26 and FY 2027-28, India is expected to add between 25,000 and 30,000 new hospital beds, facilitated by contributions from both public and private sectors. The focus on medical education has been reinforced with targeted investments in the expansion of nursing and medical colleges, aiming to bridge the gap in the healthcare workforce. While challenges persist, the overall outlook for Indias healthcare sector remains optimistic, backed by consistent investments, strategic initiatives, and a commitment to improving healthcare access and quality.

Source: h t t p s : / / w w w.c a r e r a t i n g s .c o m / u p l o a d s / newsfiles/1744017407_India%E2%80%99s%20Healthcare%20 Expenditure%20to%20Surge%20-%20CareEdge%20Report.pdf

https://www.ey.com/content/dam/ey-unified-site/ey-com/en-in/ services/tax/union-budget-2025/02/ey-budget-2025-highlights. pdf

DIAGNOSTICS INDUSTRY OVERVIEW

Indias diagnostics industry has emerged as a critical pillar of the healthcare ecosystem, enabling early detection, accurate diagnosis, and informed treatment decisions. Despite its pivotal role—contributing to over 70% of clinical decision-making—diagnostics remains significantly under-penetrated, accounting for just 6% of total healthcare spending. The industry was valued at approximately US$ 12 billion in FY24 and is expected to grow at a robust CAGR of 8-10% through FY28, driven by increasing healthcare awareness, higher disease burden, rising demand for preventive testing, and a gradual shift toward organized, quality-centric service providers.

The market continues to be highly fragmented, with nearly 85% of diagnostics services delivered by hospital-based or standalone unorganized labs. Organized players, although representing just 15% of the market, have consistently outperformed the industry with a CAGR of 12% over the past five years, supported by superior operational efficiencies, technology adoption, and brand trust. Quality remains a key differentiator, as only about 5% of Indias laboratories are NABL accredited, contributing to concerns over accuracy and misdiagnosis—identified as the second leading cause of death in India between 2017–2019.

Segment-wise, pathology comprises 58% of the industry, valued at US$ 7.5 billion, and continues to witness steady growth with a shift toward specialized and high-value testing. Radiology, valued at US$ 5.4 billion, is increasingly gaining traction due to its critical role in managing chronic diseases and the governments focused investment in expanding radiology access through initiatives like the Free Diagnostics Services Initiative (FDSI). The emergence of tele-radiology and the Production Linked Incentive (PLI) scheme for domestic equipment manufacturing are further propelling growth in this segment.

INDUSTRY OUTLOOK

Looking ahead, the Indian diagnostics sector is poised for sustained long-term growth, supported by a favorable convergence of healthcare demand, digital acceleration, and supportive policy measures. Rising incidences of non-communicable diseases—projected to account for over 70% of all deaths by 2030—alongside a growing emphasis on preventive healthcare, are expected to significantly boost testing volumes and value.

Preventive and wellness diagnostics, which currently constitute around 10–12% of the pathology market, are anticipated to grow at 18–20% CAGR, driven by increasing corporate wellness initiatives, wider insurance coverage, and heightened health consciousness among consumers. Furthermore, geographic expansion into tier 2 and tier 3 cities presents a compelling growth opportunity, as nearly two-thirds of the countrys diagnostic test volumes originate from non-metro regions.

Amid this evolving landscape, organized diagnostics chains are well-positioned to lead the next wave of transformation by leveraging digital platforms, expanding hub-and-spoke networks, introducing advanced testing capabilities in genomics and molecular diagnostics, and maintaining a strong focus on quality and affordability. With superior return metrics, low regulatory risk, and a resilient business model, the diagnostics sector is expected to continue commanding premium valuations within the healthcare space.

GOVERNMENT INITIATIVES DRIVING DIAGNOSTICS INDUSTRY GROWTH

The Indian diagnostics industry continues to gain momentum, not only due to increasing healthcare awareness and disease burden, but also owing to strong policy interventions by the Government of India. A series of strategic programs have been launched to enhance accessibility, affordability, and quality of diagnostics across the country. These initiatives are accelerating structural changes within the sector and opening up long-term growth opportunities, particularly for organized players.

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY)—2018: PM-JAY is one of the worlds largest government-funded health insurance schemes, providing 5 lakh coverage per family annually for secondary and tertiary care. With over 500 million beneficiaries, the program has stimulated demand for diagnostics by promoting structured treatment protocols and encouraging early detection at empanelled hospitals.

Health and Wellness Centres (HWCs)—2018 onwards: As part of Ayushman Bharat, HWCs are designed to deliver primary healthcare services, including basic diagnostics, to communities across India. With a target of 1,50,000 operational centres by 2025, this initiative strengthens preventive healthcare and creates direct demand for routine and point-of-care testing services.

Ayushman Bharat Digital Mission (ABDM)—2021: ABDM is building a digital health ecosystem anchored by unique Health IDs and interoperable Electronic Health Records (EHRs). By facilitating seamless access to patients diagnostic history, the initiative is expected to improve care coordination and enable more data-driven diagnostics.

PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM)—2021: With a total outlay of 64,200 crore over FY 2022-26, PM-ABHIM focuses on enhancing diagnostics and surveillance infrastructure at all levels of the healthcare system. It includes the setup of block and district-level labs, addressing a critical gap in public health diagnostics capability.

Free Diagnostics Services Initiative (FDSI)—2015: Implemented under the National Health Mission, FDSI aims to provide essential pathology and radiology services at government health facilities, primarily through public-private partnerships (PPP). The initiative has gained strong traction, with steady increases in budget allocations by both central and state governments. The focus on radiology expansion, including the planned addition of 2,000 diagnostic centres, is expected to significantly enhance diagnostic coverage in underserved districts.

Production Linked Incentive (PLI) Scheme for Medical Devices—2020: This scheme incentivizes the domestic manufacturing of advanced radiology and imaging equipment, such as CT, MRI, and PET machines. Beneficiaries include major players like Siemens, Trivitron, and Philips. The scheme reduces capital intensity for diagnostics providers and is expected to increase affordability and availability of high-end diagnostics in India.

References: Philips Capital Report 2025 - Indian Diagnostics Sector

COMPANY OVERVIEW

Metropolis Healthcare Limited (hereafter referred to as "Metropolis" or "the Company") is one of Indias most trusted and advanced diagnostic service providers, with a legacy spanning over four decades. Established in 1981 and guided by visionary leadership, the Company has grown to become the second-largest and the most respected diagnostics chain in the country, offering best-in-class pathology services across India and Africa. Metropolis is synonymous with precision, quality, and compassion—delivering not just results, but reassurance to millions of patients.

With operations spanning 28 states, 7 Union Territories, and over 750 towns in India, Metropolis maintains a robust infrastructure of 210 clinical laboratories, over 4,500+ service network, and 10,000+ touchpoints. The Company serves a broad spectrum of customers, including individual patients, hospitals, corporates, and healthcare institutions, across both B2C and B2B segments. Its test portfolio encompasses more than 4,100 diagnostics and profiles, covering routine, advanced, and highly specialized areas such as oncology, molecular genomics, neurology, infectious diseases, and women and child health.

FY 2024–25 was a landmark year for Metropolis, marked by significant strategic progress and the advancement of its refreshed brand vision. Under the overarching theme of "The Year of More", the Company accelerated its Metropolis 3.0 transformation journey, strengthening its capabilities in scientific innovation, digital enablement, customer experience, and geographic reach.

Metropolis further reinforced its leadership in high-value precision diagnostics through the strategic acquisition of Core Diagnostics, enhancing capabilities in oncology and molecular testing. Additionally, the acquisitions of Scientific Pathology and Dr. Ahujas Pathology & Imaging Centre (DAPIC) expanded the Companys B2C footprint and deepened its presence across North India. These acquisitions not only enhanced scale and network coverage but also aligned with Metropolis vision of bringing high-quality diagnostics closer to the consumer.

Innovation and digital transformation were central to the Companys growth agenda. The launch of a new mobile application with real-time sample tracking, personalized dashboards, and AI-powered recommendations significantly enhanced the customer experience. A newly introduced B2B partner portal streamlined workflows and strengthened partner engagement. AI integration was extended into clinical areas as well, with the rollout of AI-driven diagnostic tools such as prostate cancer detection and Karyotyping, significantly reducing turnaround times and improving diagnostic accuracy.

During the year, Metropolis expanded its network rapidly— growing from approximately 300 towns in FY23 to over 750 by the end of FY25. The Company inaugurated 51 new laboratories, particularly across Tier II and Tier III cities, and enhanced its international presence by launching a Regional Reference Lab in Nairobi, Kenya. These developments were supported by region-specific strategies, including competitive pricing, localized micro-marketing, and customized test offerings tailored to market needs.

On the scientific front, Metropolis introduced over 60 new specialty tests across oncology, nephrology, chronic care, and preventive health during FY 2024-25. The establishment of Centres of Excellence for key specialties and the formation of an Internal Medical Advisory Board (I-MAB), comprising more than 50 subject matter experts, underscored the Companys commitment to clinical excellence. Additionally, Metropolis engaged with over 70,000 clinicians through its Metrobot platform and published more than 20 peer-reviewed research articles, reinforcing its position as a thought leader in diagnostics.

As part of its commitment to workforce development and community engagement, Metropolis launched the Metropolis Institute of Laboratory Education and Skilling (MiLES). This initiative bridges the gap between academic learning and practical diagnostic expertise. Through collaborations with leading academic institutions such as DY Patil (Deemed-to-be) University, Navi Mumbai, and Ratan Tata Maharashtra State Skills University, Metropolis is nurturing the next generation of laboratory professionals. The MiLES program offers eight UGC-recognized certified courses for DMLT, B.Sc. MLT, and other laboratory professionals, including Advanced Clinical Chemistry, Hematopathology, Surgical Pathology, Molecular Pathology & Cytogenomics, and Quality Assurance in Laboratory Medicine. In addition, it provides one-year fellowship programs for post-MD and DNB professionals in specialized domains. The curriculum combines theoretical instruction, hands-on training, real-world case exposure, and research—guided by in-house subject matter experts. In parallel, community outreach initiatives such as the Adolescent Reproductive and Sexual Health (ARSH) program, the MedEngage platform has continued to expand the Companys social impact, touching the lives of thousands across India.

At the core of Metropolis lies a clear and enduring purpose: "Healing the world, one diagnosis at a time". Every sample, every report, and every interaction is grounded in the Companys commitment to merging scientific excellence with heartfelt empathy. In a world that demands certainty, Metropolis empowers patients and healthcare providers with clarity, confidence, and care.

Looking ahead, Metropolis remains focused on enhancing its premium wellness offerings, advancing personalized medicine through genomics and AI, and expanding into underserved markets. With a steadfast commitment to quality, innovation, and compassion, the Company is well-positioned to lead the diagnostics industry into a new era of transformative healthcare.

EMERGING TRENDS IN DIAGNOSTIC INDUSTRY

Digital and AI-Driven Diagnostics

Artificial Intelligence (AI) and Machine Learning (ML) are transforming diagnostic workflows by enhancing image analysis, pattern recognition, and predictive modelling. These technologies are significantly improving accuracy and turnaround times in radiology, pathology, and genomics. Metropolis has invested in AI-powered platforms to facilitate earlier disease detection and streamline clinical reporting, reinforcing our commitment to data-driven diagnostics.

Decentralization of Care through Home-Based Services

Post-pandemic shifts have normalized home-based diagnostics and remote care. Services ranging from at-home sample collection to portable ECG and vitals testing are now common, especially in Tier II, Tier III, and rural areas. This decentralization improves access and convenience, bridging gaps in historically underserved regions. Metropolis is leveraging this trend through its expanding wellness-at-home offerings and localized service hubs to ensure quality care delivery anytime, anywhere.

Acceleration of Point-of-Care and At-Home Diagnostics

The demand for rapid, consumer-centric diagnostics continues to rise. Point-of-care testing (POCT) and at-home kits now go beyond traditional use cases like glucose and pregnancy testing. They encompass a broad range of tests, including infectious diseases, lipid profiles, and cardiac markers. These solutions provide timely, actionable insights with minimal infrastructure, aligning well with evolving consumer expectations and regulatory support.

Personalized and Predictive Diagnostics

Healthcare delivery is transitioning from reactive to proactive models. AI-enabled analytics now harness longitudinal patient data, behavioral insights, and routine lab results to predict disease risks and guide preventive care. Metropolis proprietary "Next Best Action" (NBA) framework exemplifies this shift –helping clinicians interpret both routine and advanced parameters to drive better health outcomes. Personalized diagnostics are a cornerstone of precision medicine and patient empowerment.

Expansion of Specialized and High-Value Testing

Rising incidences of non-communicable diseases (NCDs) such as cancer, cardiovascular disorders, and neurological conditions have accelerated the need for advanced testing modalities. High-complexity diagnostics—such as next-generation sequencing (NGS), molecular pathology, and liquid biopsy—enable early, precise, and actionable insights. Metropolis continues to invest in this space to strengthen our high-value testing portfolio and support clinicians in managing complex health conditions.

Industry Consolidation and Ecosystem Integration

The diagnostics sector is undergoing consolidation, with large players acquiring regional laboratories to enhance operational scale and geographic reach. Partnerships across health-tech, pharma, and public health sectors are fostering integrated healthcare ecosystems. Metropolis is strategically aligning with this trend through selective collaborations and M&A initiatives to optimize service delivery and expand our national footprint.

MAJOR GROWTH DRIVERS AND OPPORTUNITIES

Rising Burden of Non-Communicable Diseases (NCDs)

India is witnessing a surge in lifestyle-related and chronic conditions such as diabetes, cancer, cardiovascular, and respiratory disorders. These NCDs account for over two-thirds of all deaths and are expected to cost India US$ 3.55 trillion in lost economic output between 2012 and 20301. This shift is fuelling demand for specialized and high-frequency diagnostic testing, including preventive screenings and high-value pathology and radiology services. To meet this need, Metropolis has expanded its specialized testing portfolio, leveraging capabilities in Next Generation Sequencing (NGS), molecular diagnostics, and liquid biopsies through its dedicated Innovation Cell, addressing early disease detection and precision diagnostics.

Demographic Shifts and Ageing Population

With the proportion of Indians over the age of 60 projected to reach over 20% by 20502, the need for continuous health monitoring and age-specific diagnostics is expected to grow substantially. This demographic transformation is increasing the incidence of age-related ailments, expanding the market for chronic care and wellness testing. In response, Metropolis has introduced geriatric wellness profiles and chronic disease panels that incorporate AI-powered analysis, enabling timely insights for proactive care management.

Tier II and Tier III Market Expansion

Tier II and Tier III cities in India represent a high-potential growth frontier for the diagnostics industry. These regions, characterized by limited diagnostic infrastructure and increasing healthcare needs, are witnessing a surge in demand for accessible and affordable testing services. Rising health awareness, greater insurance penetration, and digital connectivity are enabling consumers in smaller towns to seek timely diagnostics, particularly for preventive and chronic care. At Metropolis, the Company has scaled its reach across 750+ towns by end of FY25 and is pursuing deeper penetration through a structured franchise model. With supportive government policies and cost-effective expansion models, these markets are expected to play a pivotal role in driving inclusive and sustainable growth for the sector.

Health Insurance Penetration and Affordability

Greater access to health insurance is improving the affordability of diagnostics, especially among the middle and lower-income groups. Government initiatives like Ayushman Bharat and the National Health Mission have increased health coverage, enabling more individuals to access quality diagnostic services. This has reduced reliance on out-of-pocket expenses and facilitated routine health screenings and disease management tests.

Rising Income Levels

Indias rising per capita income and expanding middle class are increasing the populations ability and willingness to invest in healthcare. This has led to higher demand for preventive screenings, wellness check-ups, and specialized diagnostics. As health awareness improves across demographics, there is growing preference for quality and convenience in diagnostic services. Metropolis has responded to this demand through its premium wellness offerings and curated test panels such as TruHealth, which cater to both aspirational and health-conscious consumers across urban and semi-urban markets.

Government Support and PPPs

State-level health initiatives, public-private partnerships (PPPs), and schemes like Ayushman Bharat are strengthening healthcare access in smaller towns. Diagnostic players with strong compliance, accreditation, and technology capabilities are well-positioned to benefit from government-backed opportunities in rural and semi-urban healthcare delivery.

Indias Role in Bridging the Global Diagnostics Gap

Indias cost efficiency, scientific capabilities, and strong pathology expertise uniquely position it to address diagnostic accessibility challenges in regions such as Africa, Southeast Asia, and the Middle East. These geographies continue to face significant gaps in advanced testing infrastructure, creating an opportunity for India to emerge as a global diagnostics leader.

By leveraging digital platforms, cross-border logistics, and public-private collaborations with international healthcare bodies, India can extend its diagnostic services globally. Metropolis Healthcare has already established a presence in 5 countries in Africa and operates B2B services in over 12 countries. The company is now focused on expanding its global footprint through strategic partnerships, telehealth integration, and international sample processing, aiming to position itself as a key player in global diagnostics.

References:

1. Non-communicable diseases to cost India around $3.6 trillion by 2030 : Today News

2. UNFPA India : India ageing, elderly to make up 20% of population by 2050: UNFPA report

THREATS

Workforce Shortage and Skill Gaps

The diagnostics industry faces a growing shortage of skilled professionals such as pathologists, radiologists, lab technicians, and phlebotomists. This challenge is more severe in rural and semi-urban areas, where access to trained talent is limited, affecting both service quality and reach. Regulatory requirements for accredited labs to employ full-time qualified staff further increase hiring pressures. As technology in diagnostics continues to advance, there is a constant need for training and upskilling, adding to the strain on human resources.

High Capital Expenditure and Operational Costs

Maintaining competitiveness requires continuous investment in advanced diagnostic equipment and technologies, such as molecular diagnostics and high-end imaging modalities. These investments entail substantial capital expenditure and ongoing maintenance costs. Moreover, the need for specialized infrastructure and trained personnel to operate sophisticated equipment adds to operational expenses, potentially impacting profitability, especially for smaller and mid-sized diagnostic centres.

Supply Chain Vulnerabilities and Import Dependence

Indias diagnostics industry heavily relies on imported reagents, equipment, and consumables, with estimates indicating that 70–80% of high-value medical devices are imported. This dependence exposes the sector to global supply chain disruptions, currency fluctuations, and geopolitical tensions, which can lead to shortages and increased costs. Encouraging domestic manufacturing through policy support and incentives is crucial to mitigate these risks and enhance self-reliance.

Digital Transformation Barriers and Data Security Concerns

While digitalization offers opportunities for improved efficiency and access, it also presents challenges. The digital divide between urban and rural areas limits the reach of telemedicine and digital diagnostic services. Furthermore, the increasing digitization of patient data raises concerns about data privacy and cybersecurity. The absence of comprehensive data protection regulations heightens the risk of data breaches, potentially undermining patient trust and compliance with international standards.

Fragmented Regulatory Landscape and Compliance Challenges

The regulatory environment for diagnostics in India is characterized by fragmentation and inconsistency. Only a limited number of states have adopted the Clinical

Establishments (Registration and Regulation) Act, 2010, leading to varied standards and enforcement levels across regions. This inconsistency complicates compliance for diagnostic providers operating in multiple jurisdictions and may affect the standardization and quality of . diagnostic services.

Prevalence of Unregulated and Substandard Laboratories

A significant number of diagnostic laboratories operate . without proper accreditation or qualified personnel, leading to concerns about the accuracy and reliability of diagnostic results. The existence of such unregulated entities undermines public trust in diagnostic services and is poses risks to patient safety. Strengthening regulatory oversight and enforcing quality standards are essential to address this issue.

PERFORMANCE OVERVIEW Business Performance

	FY2021-22	FY2022-23	FY2023-24	FY2024-25
Revenue Per Patient (in )	914	944	1006	1050
Revenue Per Test (in )	479	453	497	504
Laboratory Network	171	175	199	210
Service Network	3064	3675	4150	4536

Rs

Financial Performance (in Crores)
	FY2021-22	FY2022-23	FY2023-24	FY2024-25
Revenue from Operations	1228	1148	1190	1331
Adjusted EBITDA*	349	293	285	325
Adjusted Profit After Tax*	215	143	128	161

Details of Key Ratios

Key Financial Ratios	FY2023-24	FY2024-25	Variance (in %)
Debtors Turnover*	8.6	9.8	14%
Inventory Turnover	29.3	32.0	9%
Interest Coverage Ratio	8.0	NA	-
Current Ratio	1.2	1.2	-3%
Debt-Equity Ratio	NA	0.0	-
Operating Profit Margin (%)	16.3%	15.7%	-3%
Net Profit Margin (%)	10.6%	10.9%	3%
Return on Net Worth Ratio (%)*	11.8%	10.9%	-7%

*Reported EBITDA and PAT were impacted by one-off expenses of approximately 21 crore, primarily comprising Acquisitionrelated costs linked to the three acquisitions, Legal and professional fees associated with ongoing tax cases and a minor provision for inventory *The Debtor Turnover Ratio has been computed based on total sales. However, if calculated using net credit sales, the ratio for the financial year 2024-25 would be 4.7 times, compared to 2.3 times in the financial year 2023-24.

*Return on Net Worth (RoNW) has declined during the financial year primarily due to an increase in the net worth base, following the issuance of equity shares (including premium) to the shareholders of the acquired company pursuant to the stake acquisition. Additionally, no dividend was declared during the current year as compared to the previous year, which led to higher retained earnings and further contributed to the increase in net worth. As a result, despite maintaining a stable profitability level, the return on net worth ratio has shown a downward trend due to the expanded equity base.

RISK MANAGEMENT

Metropolis Healthcare Limited adopts a structured, disciplined, and integrated approach to Risk Management, embedded within its overall governance and strategic decision-making processes. The Companys Risk Management framework is designed to identify, assess, monitor, and mitigate a wide spectrum of risks that may impact its operational, financial, reputational, or compliance objectives. The primary objective of the Risk Management framework is to facilitate sustainable business growth while ensuring stability and resilience. This is achieved through a proactive, forward-looking approach that enables the early identification and effective resolution of potential risks across all business functions. In line with the principles of sound corporate governance and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company promotes a risk-aware culture and ensures that appropriate risk mitigation strategies are developed, implemented, and continuously reviewed by the Risk Management Committee of the Board.

Risk	Impact	Mitigation Plan
Competition Risk	The Company operates in a highly competitive landscape marked by the growing presence of emerging players, including large conglomerates, hospital networks, pharmaceutical companies, health-tech platforms, and agile startups.	To mitigate the risks associated with heightened competition, Metropolis Healthcare is focused on strategically redefining its cost structure to ease pressure on margins and enhance return ratios. The Company continues to invest in expanding its laboratory footprint and customer touchpoints to strengthen accessibility and drive volume-led growth.
	This intensifying competition poses strategic challenges, with the potential to impact growth momentum, exert downward pressure on pricing, and influence margin sustainability and return ratios.	Importantly, the Companys core business segment— acute illness diagnostics—remains relatively insulated from competitive disruption, offering a degree of resilience in the current market environment.
		Additionally, Metropolis has established a dedicated Competition Desk to actively monitor and respond to market dynamics. This function plays a critical role in tracking industry trends, conducting pricing comparisons, benchmarking operational practices, and ensuring the Company sustains a differentiated and competitive edge.
Technological Risk	Operating in a rapidly evolving, technology- driven environment, the Company faces the inherent risk of technological advancements potentially disrupting traditional diagnostic models and reducing demand for certain products and services. Continuous innovation and adaptability are therefore critical to maintaining relevance and sustaining long-term growth in this dynamic landscape.	To address this risk, the Company focuses on offering tests that are more accurate and cost-effective than market alternatives through the implementation of the latest technologies. Metropolis emphasizes process automation and the deployment of advanced technology to enhance turnaround times (TAT), eliminate operational redundancies, and effectively channel skilled resources for improved efficiency and productivity.
IT Disruptions and System Failure Risk	Operating in a highly time-sensitive industry, the Company is exposed to the risk that any malfunction or disruption in its IT systems could significantly impact its ability to serve customers and patients efficiently. Such incidents may also lead to potential breaches of personal data, posing reputational risks and undermining stakeholder trust.	Metropolis has implemented stringent and comprehensive IT security practices encompassing cybersecurity, IT governance, and risk management protocols. The Company is ISO 27001 certified, underscoring its commitment to maintaining high standards in information security, system integrity, and data protection.
		As a proactive measure, Metropolis conducts regular audits and risk assessments through independent third- party consultants. These assessments help in early identification of potential vulnerabilities and facilitate the implementation of preventive controls to mitigate risks effectively.
Business Continuity Risk	Business continuity risks may arise from external factors, including natural disasters such as floods, earthquakes, cyclones, and heavy rains, as well as socio- political disruptions like riots, strikes, and disruptions to logistics channels caused by such calamities. These events pose potential challenges to the continuity of operations and service delivery.	Metropolis has established robust Business Continuity Planning (BCP) and Disaster Recovery (DR) frameworks for both GRL and RRL to effectively address emergencies.
		The Company has proactively developed BCP and DR sites to ensure seamless operations, safeguarding continuity in service delivery to end customers, even during disruptive events.
	Business continuity risks due to external factors such as flood, earthquake, political riots, strikes, cyclone, heavy rains, disruption of logistics channels due to natural calamities etc.

IT & DIGITAL INFRASTRUCTURE

Metropolis Healthcare continues to make strategic and sustained investments in building a robust digital infrastructure to enhance operational efficiency, strengthen stakeholder engagement, and deliver an elevated customer experience. During the year, the Company unveiled a next-generation mobile application designed to offer a seamless, user-centric experience. The app integrates personalized health dashboards based on diagnostic history and trends, real-time sample tracking from collection to reporting, AI-powered test recommendations, intuitive appointment booking, and advanced security protocols to ensure safe access and sharing of health records.

At the enterprise level, Metropolis has implemented a comprehensive Customer Relationship Management (CRM) system and a Customer Data Platform (CDP), which together optimize sales, service, and marketing functions by enabling faster, data-driven, and more personalized engagement. The Company also deployed a low-code development platform to accelerate innovation and improve responsiveness. Enhancements to the Laboratory Information Management System (LIMS) have significantly improved accuracy and turnaround times in diagnostic reporting, while the launch of a dedicated B2B partner portal—with real-time sample tracking and automated workflows—has streamlined operations for institutional partners.

Artificial Intelligence (AI) has emerged as a key enabler in Metropolis digital transformation journey. The Company introduced AI-powered diagnostic innovations, such as the Prostate Cancer Test and AI-driven Karyotyping, which have markedly reduced turnaround times and improved diagnostic precision. These advancements are complemented by the expansion of its genomics portfolio, including premium NGS-based tests like the Hereditary Cancer Panel, Oncomine Myeloid 69 Panel, and Recombinant Repair Panel—positioning Metropolis at the forefront of personalized and preventive diagnostics.

In parallel, the Company remains deeply committed to data governance, information security, and patient privacy. Metropolis has achieved ISO 27001 and ISO 27701 certifications, underscoring its adherence to international standards in data protection and privacy management. These credentials affirm the Companys robust practices in handling electronic health records and reinforce the trust placed in it by millions of patients.

Together, these digital initiatives form a future-ready, scalable ecosystem that empowers Metropolis to deliver superior healthcare outcomes, expand access, and accelerate its growth trajectory in a rapidly evolving diagnostics landscape.

HUMAN RESOURCE MANAGEMENT

At the heart of Metropolis is a passionate and skilled workforce of more than 5,900 professionals who drive excellence across diagnostics, operations, and innovation. Guided by visionary leadership and purpose-driven values, Metropolis is committed to nurturing a resilient, future-ready workforce that fuels the companys ambitious growth while upholding the highest standards of care and compassion. As a progressive healthcare organization, Metropolis remains steadfast in building an inclusive, high-performance culture where every employee feels valued, heard, and empowered.

Investing in talent continues to be a core pillar of Metropolis mission to transform diagnostic care. The companys ethos—anchored in aligning people, purpose, and performance—combined with a culture of speed and accountability, empowers employees to deliver better outcomes for patients every day.

Metropolis places strong emphasis on attracting top talent, fostering leadership, and enabling continuous development across all levels of the organization. With a focus on career mobility and internal growth, the company creates opportunities for employees to evolve within the business. Through structured learning initiatives and leadership programs, Metropolis ensures that its people are equipped to deliver excellence at every stage. As the organization scales, Metropolis remains deeply committed to preserving its people-centric culture, which continues to serve as a cornerstone in delivering exceptional value to all stakeholders.

Metropolis Healthcare maintains a gender-diverse workforce with a male-to-female ratio of 55:45 and has set a clear goal of achieving equal representation (50:50) by 2028. Currently, women hold 25% of leadership roles, reinforcing the companys ongoing commitment to gender equity across the organization. To support women professionals returning to the workforce after career breaks, Metropolis continues to strengthen its industry-first ‘Full Circle—Career 2.0 program, which offers flexible work models and tailored re-entry opportunities. These initiatives underscore the companys broader commitment to fostering a diverse and inclusive workplace—one where equity, opportunity, and shared purpose converge to drive sustained organizational growth and impact.

INTERNAL CONTROL SYSTEM

Metropolis Healthcare has instituted a robust internal control framework that governs both financial and operational functions across the organization. These controls are supported by well-documented policies and standard operating procedures designed to ensure accurate financial reporting, operational integrity, regulatory compliance, and asset protection.

The internal control system provides reasonable assurance regarding the reliability of financial and operational information, safeguarding of assets against unauthorized use or losses, and adherence to applicable laws and regulations. Regular reviews are conducted to assess and enhance the effectiveness of these controls.

The internal audit function, with a clearly defined scope and coverage, plays a critical role in evaluating and strengthening the control environment. Key focus areas include:

• Identifying and reporting key process risks

• Verifying compliance with statutory requirements and internal guidelines

• Recommending measures to improve process efficiency and operational effectiveness

• Ensuring the accuracy and dependability of financial and operational data

The Audit Committee of the Board provides active oversight, regularly reviewing significant internal audit findings and tracking corrective actions. It also monitors adherence to accounting standards, evaluates the adequacy of risk management practices, and ensures that control mechanisms are aligned with the Companys overall governance objectives.

This structured and proactive approach to internal controls underpins Metropolis Healthcares commitment to transparency, accountability, and sound . corporate governance.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may be forward-looking within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand and supply conditions, finished goods prices, input materials availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labor negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, based on any subsequent development, information, or events or otherwise.