Diagnostics chain Metropolis Healthcare Ltd has acquired four laboratories in Surat, Gujarat for a combined consideration of ₹18 crore.
The acquisition was done to expand the penetration of the company’s wholly-owned subsidiary Desai Laboratories, which it acquired in 2007, according to an exchange filing by Metropolis Healthcare.
“Many industry reports have cited that consolidation is a way forward for the diagnostic industry and large national players are set to benefit from this consolidation. Metropolis with its successful track record of consolidation and integrating businesses is at an advantage," Metropolis Healthcare Managing Director Ameera Shah was quoted as saying in a company release.
Metropolis currently operates 13 labs in Gujarat at Ahmedabad, Surat, Vadodara, Mehsana, Rajkot, Navsari, Jamnagar and Gandhidham. The company also has around 300 patient service centers across the state.
The four labs it has acquired had a combined revenue of ₹7.4 crore in 2017-18 (Apr-Mar), according to an exchange filing.
Metropolis Healthcare had a combined revenue of Rs.760 crore in 2018-19 (Apr-Mar), 18% higher than 644 crore rupees in the previous year.
The diagnostics sector is fragmented and unorganised, with most of the larger players trying to corner more market share by acquired individual laboratories.
According to a report by Research and Markets, the diagnostic services market is expected to continue growing at 27.5% for the next five years. However, with a major portion of diagnostic business managed by the unorganized sector, the industry is expected to witness consolidation with a number of small and independent laboratory players becoming franchisees for the larger players, the report said.
On Tuesday, shares of Metropolis Healthcare closed 1.8% lower at 1,250 rupees on the National Stock Exchange.