Medplus Q4 Results Review - Strong Quarter; Growth, Margin Visibility Intact: HDFC Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.Medplus Health Services Ltd.'s Ebitda growth (+30% YoY) was led by +19% YoY sales growth (pharmacy was up 18% YoY and diagnostics grew 95% YoY), moderate growth in staff costs (+8% YoY), which was partly offset by flat YoY gross margin (+47 basis points QoQ) and 33% YoY rise in selling, general and administrative.Operating Ebitda margin (pre IND-AS) came in at 3.9% (+66 basis points YoY) as pharmacy margin expanded by 44 bps YoY to 4.0% (+49 bps QoQ) and there was an Rs 11 million loss in diagnostics. Medplus Health Services expects to add 600+ stores in FY25 with a focus on expanding its presence in existing as well as new markets.It expects to increase private label share in the overall mix and aims to reach ~20% share in the next few years, led by increasing product offerings. It expects gross margin to see pressure from a shift in product mix in its private label (old private label to own branded generics).It expects the operating margin to see a gradual improvement in FY25. Factoring FY24 performance, we have tweaked our Ebitda for FY25/26E. Target price stays at Rs 850 (18 times FY26E earning value/ Ebitda, which implies 29 times pre-INDAS EV/E).We reiterate 'Buy', given its strategic expansion plan with a focus on improving profitability. We also see a gradual improvement in margin led by a better mix with growth in mature stores (2+ years; ~9-10% margin), an increasing share of margin accretive private-label and Medplus-brand generics, and an efficient supply chain..Click on the attachment to read the full report:.FMCG Sector Expected To Make A Comeback, Say Analysts.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Medplus Q4 Results Review - Strong Quarter; Growth, Margin Visibility Intact: HDFC Securities

Medplus expects steady growth led by store expansion and traction from its own branded generic private label business.

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