Revenue from operations rose 21.8% to ₹1,879.6 crore from ₹1,542.6 crore, while earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased 1.9% to ₹133.2 crore. However, the EBITDA margin narrowed to 7.1% from 8.5% a year ago.
Investor sentiment was also weighed down by weaker private-label sales. The contribution of private-label products to own-store revenue fell to 11.5% from 13.4% a year earlier, while gross margin declined 160 basis points to 24.5%.Operating EBITDA fell to ₹65.1 crore from ₹72.8 crore. Operating EBITDA margin contracted to 3.5% from 4.7%.
During the quarter, MedPlus added 146 stores, including 131 franchise outlets. The board also approved a ₹40 crore investment to set up a Food Park, including a cold press oil extraction unit, in Hyderabad.
Alongside the earnings, the company announced plans to expand beyond pharmacy retail by setting up a Concierge Health & Wellness Services Facility in Hyderabad.
The subscription-based centre will offer preventive healthcare, diagnostics, specialist consultations and wellness services, with a planned investment of around ₹115 crore, including ₹90 crore in capital expenditure.
Speaking to CNBC-TV18, Managing Director and CEO Gangadi Madhukar Reddy said the concierge medicine business would operate as a separate business unit within the company and is expected to become profitable relatively quickly.He said the venture would provide “everything outside a hospital”, combining diagnostics, clinics and preventive healthcare under a membership-based model.
Reddy said the Hyderabad centre would serve as a pilot project, with any expansion to other cities dependent on its performance against internal metrics.
The company also plans to maintain its expansion strategy of opening around 800 stores during FY27.
On margins, Reddy attributed the decline in gross margin primarily to a lower contribution from private-label products and supply disruptions caused by geopolitical tensions, which affected packaging costs and product availability.
He said absolute private-label sales had increased, but their share in the overall mix had declined as the company focused more on branded products. MedPlus expects private-label sales to recover as supply chains normalise.
Reddy also said higher wages following the implementation of new labour codes in Karnataka and Andhra Pradesh weighed on profitability during the quarter, but added that the company has initiated corrective measures and expects margins to improve over the next three quarters.
Shares of MedPlus Health Services are trading 14% lower on Wednesday at ₹681.45. As a result of this fall, the stock has also slipped below its IPO price of ₹796 per share. The stock is down 16% on a year-to-date basis as well, and has slipped further from its 52-week high of ₹1,022.7.
