Target: ₹2,367

CMP: ₹2,219.65

On December 9, Metropolis Healthcare Ltd (MHL) announced that it is acquiring 100 per cent stake in CORE for ₹246.80 crore. The acquisition will be financed through a combination of 55 per cent cash and 45 per cent equity swap, subject to shareholder approval.

Aligned with MHL’s strategy to enhance capabilities and expand into niche and highly specialised testing domains, this acquisition represents a seamless addition to its portfolio. Through the acquisition, MHL aims to achieve: Strengthen relationships with leading oncologists across the country; bolster operations in North and East India; integrate advanced cancer testing capabilities with state-of-the-art solutions; further solidifying MHL’s expertise in oncology, which is poised to remain the fastest-growing segment in the coming years; capitalise on cross-selling opportunities; and realise cost synergies through the consolidation of overlapping laboratories, procurement efficiencies, logistics integration, and reduction of overhead costs.

We have changed our view on Metropolis Healthcare Ltd from a Buy to Neutral rating and a target price of ₹2,367 (58 x FY26E). We believe that MHL is set to grow its core segment by 13-15 per cent. However, we believe that the current valuation adequately reflects the company’s growth potential.