MedPlus profit falls 22% despite 22% revenue growth; network reaches 5,476 stores

MedPlus added 146 mostly franchisee-led stores in Q1 FY27, taking its network to 5,476, but higher overheads and softer private-label growth pressured profitability. Operating EBITDA fell 11% and gross margin declined 163 bps year on year. The company also approved Hyderabad food-park and wellness-facility investments.

— Source publishedWed, 22 Jul, 2026, 13:31 IST·First seen Wed, 22 Jul, 2026, 13:48 IST·Source Business Today · Latest

What happened

MedPlus Health Services · MedPlus posted weak Q1 FY27 profitability despite 22% revenue growth, as margins and private-label growth softened while overheads

Key facts

  • Shares fell 17.8% to a 52-week low of Rs 653.80
  • Revenue rose 22% YoY
  • Gross profit rose 14% YoY; gross margin declined 163 bps YoY
  • Operating EBITDA fell 11% YoY
  • Net profit fell 22% YoY
  • 146 stores added in Q1; network reached 5,476 stores
  • Franchisee stores represent about 12% of network and contributed about 5% of pharmacy revenue
  • Food park capex: around Rs 40 crore
  • Concierge health and wellness facility investment: around Rs 115 crore, including about Rs 90 crore capex
  • Nomura target price: Rs 1,190

Why this matters

MedPlus’s Hyderabad food-park and wellness-facility investments indicate a push to build supply-chain and adjacent-health capabilities, though near-term capital allocation must be weighed against weakening profitability.

What to watch

  • Same-store sales growth versus growth contributed by new stores.
  • Quarterly gross-margin movement and private-label sales mix.
  • Operating EBITDA margin and overhead growth relative to revenue.
  • New-store ramp-up period, franchisee contribution, and store closure or churn trends.
  • Operating cash flow, working-capital days, and capex commitments for Hyderabad projects.
  • Competitive pricing actions by pharmacy chains, quick-commerce platforms, and e-pharmacies.
  • Prioritize franchisee-led openings in underpenetrated catchments while moderating company-funded expansion.
  • Increase private-label visibility, availability, and promotional support to rebuild gross margin.
  • Tighten store-level productivity targets, especially for recently opened outlets, delivery operations, and staffing.
  • Phase Hyderabad food-park and wellness investments against demand milestones and capital-return thresholds.
  • Use the enlarged network to negotiate better procurement terms and improve inventory turns.