Summary
MedPlus Health Services Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026 5:00 PM IST
Event Participants
Executives 3 Gangadi Madhukar Reddy (CEO & MD), DRN Srinivas (Sr. Manager Finance), Sujit Kumar Mahato (CFO)
Analysts 8 Akhil Parekh, Divyansh Gupta, Gaurav Nigam, Lakshminarayanan, Madhav Marda, Raman KV, Riddhansh Chandak, Umakant Sharma
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹1,806.1 crores | +15.6% YoY growth in pharmacy operations; driven by strong SSSG and private label uptick. |
| Consolidated Operating EBITDA | ₹96.8 crores | 5.4% margin; includes a ₹7.06 crore non-recurring charge for new Labour Code implementation. |
| Pharmacy Operating EBITDA | ₹92.5 crores | 5.2% margin; stores older than 12 months delivered a higher store-level EBITDA of 12.4%. |
| Diagnostic Revenue | ₹32.67 crores | +18.9% YoY growth; segment recorded an operating EBITDA margin of 15.5%. |
| Private Label Sales Mix | 22.2% | Comprises 11.6% Pharma and 10.6% FMCG; Private Pharma GMV share rose to 18.9% from 7.9% YoY. |
| Same Store Sales Growth (SSSG) | 10.5% | Significant recovery attributed to revised store-level incentive structures and improved stock availability. |
| Store Count | 5,112 stores | +182 net additions in Q3; network spans 2.6 million+ square feet with 77% stores older than 2 years. |
| Net Working Capital | 53 days | -10 days YoY; reduction driven by franchisee model shift (no inventory on books) and warehouse efficiencies. |
| Debt/Capital (Cash) | Not Specified | Management noted cash conservation due to moderated store openings (400 YTD vs previous years). |
Geographic & Segment Commentary
- Pharmacy Operations: Represents the core business with 96% of revenue (₹1,630 crores) coming from stores older than 12 months. Focus remains on “densification” in existing states like Telangana and Karnataka while expanding into adjacent territories like Chhattisgarh and Kerala.
- Diagnostics: Growth driven by “MedPlus Advantage” plans, reaching 1.80 lakh active plans covering 3.68 lakh lives. Segment profitability improved significantly with EBITDA rising to ₹5.07 crores from ₹2.21 crores YoY.
- Franchisee & Others: This segment now contributes 3.7% of total revenue (up from 1% previously). Revenue includes wholesale distribution to 7 existing/converted franchisee stores and third-party partners.
Company-Specific & Strategic Commentary
- Incentive Restructuring: Management shifted store incentives from purely private-label targets to total sales growth. This helped boost branded pharma and FMCG sales, contributing to the 10.5% SSSG (Sujit Mahato).
- Private Label Expansion: The company is aggressively adding non-pharma categories (food, wellness, cold-pressed oils) to leverage its 5,000-store scale. These carry 25-28% gross margins without the substitution risk seen in pharma (Madhukar Reddy).
- Supply Chain Optimization: 60-70% of new warehouses are now operational; infrastructure is designed to support a “densification” strategy to sweat assets in core clusters (Sujit Mahato).
- Omnichannel Service: MedPlus is consciously ramping up delivery speeds to compete with quick-commerce players, utilizing its high store density for better serviceability (Sujit Mahato).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Store Additions | 600 net additions for FY26 | Remaining 200 stores to be added in Q4; FY27 expected to maintain a similar run rate. |
| Gross Margins | Stable at current levels | Benefits from private label mix expected to be offset by lower-margin franchisee distribution sales. |
| Store Expansion | Cluster-based densification | Priority is deepening presence in existing states to optimize warehouse utilization before major new state entries. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory/Labour Costs | The implementation of the new Wage Code resulted in a ₹7.06 crore one-off hit; management is monitoring further notifications for potential recurring impacts. |
| Inventory Obsolescence | Private label products carry 100% inventory risk on MedPlus’s books; company currently provisions 0.9% to 1.0% of private label sales for damages/expiry. |
| Margin Dilution (Franchisee) | Sales to franchisees happen at lower margins compared to retail sales, which may optically suppress gross margin percentages as the model scales. |
| Competition | Rapid emergence of quick-commerce pharmacy delivery requires continuous investment in logistics and “on-time” service capabilities. |
Q&A Highlights
Store Performance & SSSG
- Question: What drove the 10.5% SSSG and the 18.9% private pharma GMV? (Riddhansh Chandak)
- Answer: Success is due to hitting a lower base from the previous year, warehouse availability improvements, and the revised incentive structure that rewards total sales rather than just private label (Sujit Mahato).
Margin Trajectory
- Question: Can the pharmacy business reach 6% operating margins in the next two years? (Madhav Marda)
- Answer: It is possible; growth will be driven by the non-pharma private label side, where MedPlus currently has lower penetration (20%) compared to competitors (30-50%) (Madhukar Reddy).
Working Capital
- Question: Why did working capital drop by 10 days YoY? (Madhav Marda)
- Answer: Primarily due to the franchisee model (stores carry their own inventory) and a conscious effort to optimize warehouse stock levels. Also, lower store addition rates compared to the previous year helped conserve cash (Sujit Mahato).
Private Label Strategy
- Question: Are you still pushing private label pharma as aggressively? (Raman KV)
- Answer: We have significantly reduced the “push” on private label pharma to prioritize customer trust and quality publicity. However, we remain very bullish on private label non-pharma (FMCG) as there is no theoretical cap on its growth (Madhukar Reddy).
Key Takeaway
MedPlus delivered a robust Q3 FY26, characterized by a recovery in SSSG to 10.5% and consolidated revenue of ₹1,806.1 crores. A strategic pivot in store-level incentives—moving from private-label-only targets to total sales growth—successfully revitalized branded pharma and FMCG volume. While the private label pharma GMV share reached 18.9%, management is increasingly prioritizing non-pharma private labels (wellness, food) to drive margin expansion toward a long-term 6% EBITDA goal. The diagnostics wing showed improved maturity with a 15.5% EBITDA margin and steady growth in “MedPlus Advantage” plans. Despite a one-time ₹7.06 crore charge due to labor code changes and competition from quick-commerce, MedPlus achieved a healthy 12.4% EBITDA in mature stores. The company remains on track to add 600 stores in FY26, focusing on densifying existing clusters to sweat its newly operationalized warehouse infrastructure.
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