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Incorporated in 2006, Medplus Health Services is India's second-largest pharmacy retailer in terms of the number of stores and revenue. The company offers pharmaceutical and wellness products i.e. medicines, vitamins, medical devices, test kits, and fast-moving consumer goods i.e. home and personal care products, baby care products, sanitizers, soaps, and detergents, etc. It is also the first pharmacy retailer in India to offer an omnichannel platform wherein customers can purchase products through stores, place orders over the telephone, online orders, and a Click and Pick facility..

* According to the Technopak Report, it is India's first pharmaceutical retailer to offer an omni-channel platform. This approach aims to broaden and expand the Company's client base while also enhancing "convenience" as a primary customer value proposition and retaining customers inside its ecosystem.

* As of September 30, 2021, we operated 546 stores in Karnataka, 475 stores in Tamil Nadu, 474 stores in Telangana, 297 stores in Andhra Pradesh, 224 stores in West Bengal, 221 stores in Maharashtra and 89 stores in Odisha.

* Company has an established track record of delivering strong financial performance. Between financial year 2019 and financial year 2021, total revenue from operations grew at a compound annual growth rate (“CAGR”) of 16.21% from ₹22,727.37 million to ₹30,692.69 million.

* Company’s business operations across the entire value chain are backward integrated and are wholly-managed and operated by itself. The company's operations are supported by its technologydriven supply chain and distribution infrastructure, which is arranged in a hub-and-spoke model and gives it a strong foundation and substantial power to continue to grow.

Outlook & Valuation:

Over the period of FY19 to FY21, company revenue increased from Rs 2,284.94 crore to Rs 3,090.81 crore, while profits grew from Rs 11.92 crore in FY19 to Rs 63.11 crore in FY21 with only a slight dip in FY20. Margins of the company are increasing slowly. The company is the second-largest pharmacy retailer in India which offers an omnichannel platform. After a dismal performance for FY20, the company posted super earnings recently. The company has low margins, but it is expanding. We believe that there are growth opportunities in the industry and might perform better over the period. There are no listed peers and IPO is arriving at a PE of 71x to its annualized FY22 earnings. Prima-facie the valuation looks expensive but over the period of time, we believe the company's growth may justify its valuation. Thus we recommend a "SUBSCRIBE" rating to the IPO for listing gain and long term.

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