The conference call was addressed by Ameera Shah MD, Vijendra Singh CEO and Tushar Karnik CFO.

Highlights of the call:

In Q1, consolidated revenue stood at 203.3 crore, up 15.7%.

Revenue growth was primarily volume driven in Q1.

PAT before CSR, exceptional items, and impact of Ind-AS 116 stood at Rs 35 crore, up 28.3%.

In general, the diagnostics industry is expected to grow to USD 12 billion in FY20 from about USD 9 billion in FY18.

It is one of the better growing segments in the Indian healthcare sector.

Organized players have less than 15% to 20% market share leaving ample room for growth.

Players with a good consumer brand, high focus on quality, and rich customer experience will continue to gain large market share.

Metropolis has a strong consumer connect.

It enjoys leadership position in many of its markets.

It has pan-India presence and large test menu with a higher focus on specialized and wellness tests.

The management is confident of growing above industry growth rates.

The company has leadership position on test menu, accreditation & quality scores, infrastructure, revenue per patient, customer experience score and ROCE.

The company will leverage its vast capability in molecular diagnostics, oncology, cytogenic, where there is less competition and higher margins due to advanced technology, skilled manpower, and complex processes involved to move patients up the value chain based on advanced prescriptions generated by doctors.

Preventive and wellness services are a growing area of focus for Metropolis. The company is targeting healthy individuals with sedentary lifestyle who are prone to diseases such as cardiovascular and diabetes ailments. Precision medicine focused on preventive care and walkin & direct-to-customer services will drive growth.

Aggressive network expansion to go closer to patients, working towards upscaling seeding cities to focused cities, maturity of its young network, and inorganic strategy will be the main points which will strengthen the Metropolis brand to be the only choice of patients.

Its strategy for growth in focused cities is a proven strategy of going deeper and casting wider for long-term business outcomes.

Metropolis' concentrated network in focused cities and seeding cities is growing. In addition, it is also confident about growth and contribution in other City category. It is witnessing an increasing trend in consumption in smaller cities and the company aims to capitalize on this category. In Q1, it saw a good progress.

Overall B2C revenue share in Q1 FY20 stood at 45%, up from 43% in Q1 FY19.

B2C revenues of the group registered 21% growth. B2C share in focused cities was at 56% as compared to 51% in Q1 FY19 and 52% in FY19.

Domestic revenues grew faster at 16.7% and now contribute to 95% of total revenue.

Its upcoming segment, i.e., Wellness, has shown a strong growth at 40% on year-on-year basis. This segment now contributes to 6.5% of overall revenues.

The company added 5 labs to network in Q1 FY20 taking the total lab number to 124 as compared to 119 at the end of FY19.

Patient service network stands at 2,536 as compared to 2,336 at the end of FY19.

Third party PSCs comprised of 1,679 centers.

ARC, which is again a third-party collection center network, stood at 600 centers.

Company-owned PSCs stands at 257.

It added over 200 patient centers in Q1 FY20.

71% of the network added between FY17 till date is young. Maturity of this network will allow the company to increase revenues, improve capacity utilization levels leading to operating leverage and increase in profitability.

Around 87% of center network and 18% of lab network is asset-light in nature.

In Q1 FY20, number of patient visits stood at 2.3 million, up 17.7%.

Number of tests in Q1 FY20 stood at 4.3 million, up 20.9%.

Revenue per patient in Q1 FY20 stood at Rs 899, up 5.3% from FY19 levels.

Revenue per test stood in Q1 FY20 at Rs 471, up 5.5% from FY19 levels.

The company reported exceptional items of Rs 6.9 crore for Q1 as a prudent practice. Rs 3.36 crore provision was on account of provision for impairment of investment in securities of Infrastructure Leasing and Financial Services (IL&FS). With this, it has fully provided for investment in IL&FS.

It also provided for Rs 3.5 crore on account of certain old unreconciled balances.

CAPEX for the quarter was Rs. 3.72 crore.

It has a CAPEX budget of about Rs 20 crores for FY 2020.

On account of the Ind-AS 116 for leases, it had a benefit of Rs 4.2 crore which has been reported above EBITDA while increase in depreciation and finance cost has been to the tune of Rs 3.3 crore and Rs 1.5 crore respectively.

For the whole industry, Q1 is the leanest quarter.

Every year, its contribution to revenue and EBITDA from Q1 traditionally tends to be not proportionate. This year also, it expects that to be the same. This is Metropolis, and may not the same for every company in the industry because it depends on where the regional presence is. For example, Metropolis is more in the south and west and so more of its revenues come from west and south which means Gujarat will be affected quite hard by Navratri and Diwali, Onam will affect it in Kerala, Pongal will affect it in Tamil Nadu versus for some of the other peers.

For Metropolis, Q2 and Q4 are usually the better quarters. Q1 is the leanest quarter and Q3 tends to be a little bit subdued mostly because of the festival season.