The growing health consciousness across the country has led to greater medical testing and leading pathological laboratory chains have strongly benefited from this trend. In addition, leading medical chains like Metropolis Healthcare and Dr Lal Pathlabs have taken over smaller players in niche segments and geographic locations, and this has helped them to aggressively expand their operations.
Investors have also noticed this trend, and recent bonus issue announcements by Dr Lal Pathlabs and Thyrocare Technologies have pushed stocks in this sector close to their 52-week highs.
For instance, Dr Lal Pathlabs was down 0.5% to Rs 3,125.8 in late Monday trade, and not too far from its 52-week high of Rs 3,542.6 that was reached on 19 September 2025. Investor sentiment has been strong with the company’s board on October 31, declaring a bonus issue in the ratio of 1:1.
And Thyrocare Technologies was down nearly 3.7% to Rs 1,471 in late Monday trade, and not too far from its 52-week high of Rs 1,613.9 that was reached on 17 November, 2025. It has also declared a bonus issue of 2 bonus shares for every share held. The company has fixed the record date of November 28.
Readers should note that issuing bonus shares is hardly a strong financial reason to buy a stock. All that a bonus issue does in effect is increase the number of shares issued, without impacting the overall intrinsic value of the company.
Other leading player in this segment, Metropolis Healthcare, was down 0.3% at Rs 1,946 in late Monday trade, and not too far from its 52-week high of Rs 2,259.3 that was reached on 3 September, 2025.
Q2 Earnings: Double-digit growth across the board
Metropolis Healthcare’s consolidated revenue from operations grew 22.7 % y-o-y to Rs 429.2 crore in the September 2025 quarter.
The Mumbai-based player highlighted its patient volume grew 6% y-o-y to 3.6 million in Q2FY26 and its higher margin TruHealth offering grew 21% y-o-y in the quarter under review.
Metropolis Healthcare had taken over Core Diagnostics with effect from 21 March, 2025, DAPIC, Dehradun from 23 May, 2025, Scientific Pathology, Agra from 16 June 2025, and Ambika Pathology, Kolhapur from 18 September, 2025. The above acquisitions also provided growth momentum to Metropolis Healthcare in the quarter under review.
This acquisition strategy has helped Metropolis Healthcare expand into UP, MP and Assam, and reach 750 towns across the country. The company’s service network now extends to 4,750 centres at the end of Q2FY26 vis-à-vis 4,536 at the end of FY25. Metropolis Healthcare’s consolidated net profit rose 13.3% y-o-y to Rs 52.9 crore in the September 2025 quarter.
Meanwhile, Dr Lal Pathlabs’ revenue from operations grew 10.7 % y-o-y to Rs 730.6 crore in Q2FY26. The company has highlighted it had 8.2 million patients in September 2025 quarter vis-à-vis 7.8 million a year earlier. Also, its samples for testing were 25.4 million in Q2FY26, a rise of 10.3% on a y-o-y basis.
The New Delhi-based healthcare chain had 6,607 patient service centres at the end of September 2025 quarter vis-à-vis 5,762 at the end of FY24. Its consolidated net profit rose 16.9 % y-o-y to Rs 152.2 crore in the September 2025 quarter.
And Thyrocare Technologies’ consolidated revenue from operations grew 22% y-o-y to Rs 216.5 crore in the September 2025 quarter helped by tests performed that were 53.3 million in Q2FY26 vis-à-vis 44 million a year earlier.
The Navi Mumbai-based chain has an active franchise count of 10,000 plus at the end of Q2FY26, a growth of 20% on a y-o-y basis. Its consolidated net profit was Rs 47.8 crore in Q2FY26, a jump of 81% on a y-o-y basis.
The M&A spree: Buying growth in tier 2 cities
Acquisitions allow larger path lab chains to expand their service network as well as enter new segments in pathological segments.
As shared earlier, Metropolis Healthcare in December 2024, had acquired Gurugram-based Core Diagnostics, a leading cancer testing chain in north and eastern India, for Rs 246.8 crore or about 2.2 times its FY24 earnings. The Mumbai-based chain had also acquired Agra-based Scientific Pathology and the consideration for this acquisition would range between Rs 55 crore and Rs 83 crore, or 12.2 times adjusted EBITDA of the acquired player.
And in October 2021, Dr Lal Pathlabs had acquired Suburban Diagnostics for an enterprise value of nearly Rs 925 crore, and it helped the New Delhi-based chain to expand in the western region of the country.
State FDAs and pathological chains
The state Food and Drug Administration (FDAs) across the country are the primary enforcing agencies for the rules made under the Drugs and Cosmetics Act, 1940, and it includes licensing, storage, sale, and inspection of drugs and related products used in laboratories.
And any adverse inspection of a service centre(s) can have a negative impact on the operations of pathological laboratory chains.
Efficiency check: Who has the best ROE?
Dr Lal Pathlabs has a return of equity (ROE) of 24.3% for the current financial year, according to Screener.in, while it is 11.5% for Metropolis Healthcare and 16.2% for Thyrocare Technologies.
Valuations
The valuations for stocks in this segment are very rich, given investor expectations of strong growth in the medium term and bonus issues announced by Dr Lal Pathlabs and Thyrocare Technologies.
Dr Lal Pathlabs trades at a consolidated P/E of 49 times, according to Screener.in, while Thyrocare Technologies trades at a P/E of 61.2 times. And Metropolis Healthcare trades at a P/E of 63.4 times.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family do not hold the stocks discussed in this article.
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