MedPlus Health Services Limited - Q3FY26 Result Update
MedPlus reported a strong quarter with significant momentum in Same Store Sales Growth (SSSG) and robust expansion in the private-label portfolio. Consolidated revenue grew 16% YoY / 8% QoQ to Rs 18.1 bn, driven by a recovery in branded pharma and high-margin non-pharma categories. Despite a one-time non-recurring charge of Rs 70.6 mn related to new labour code implementation, operating EBITDA remained healthy. PAT grew 26% YoY to Rs 578 mn, reflecting steady operating leverage and improved store-level efficiencies. Operating cash flow was supported by a significant reduction in working capital, which dropped to 53 days. The company achieved a net addition of 182 stores during the quarter, bringing the total network to 5,112 stores. Mature stores (>12 months) continued to demonstrate superior unit economics with a 12.4% store level EBITDA margin. The private-label mix reached 22.2% of GMV, underscoring the success of MedPlus's high-margin product strategy.
Key Highlights
* SSSG Recovery: Achieved 10.5% SSSG following a revised incentive structure rewarding total sales (Branded + PL) over pure PL growth.
* Network Expansion: Added 182 net stores (228 opened) in Q3; total network at 5,112 stores with FY26 target of 600 stores on track.
* Private Label Surge: Total PL penetration at 22.2% of GMV; PL pharma share reached 18.9% (vs. 7.9% in 1QFY25).
* Operational Efficiency: Working capital reduced to 53 days; diagnostics revenue grew 19% with a 15.5% operating EBITDA margin.
Valuation & Outlook
We estimate Revenue / EBITDA / PAT CAGR of 10% / 18% / 28% over FY25-28E. Rolling forward to September FY28E EBITDA of Rs.7.6 bn and assigning a 20x EV/EBITDA multiple, we derive a target price of Rs. 1,204, implying 39% upside from the CMP of Rs. 861. The premium valuation is justified by MedPlus's consistent execution, improving mix quality, and scalable cluster-based expansion model. With private-label traction, cost discipline, and internal funding of growth, MedPlus remains well placed for sustained value creation and margined-led compounding.
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