At a Glance
MedPlus Health, India’s second-largest pharmacy chain, flaunts 4,552 stores and ₹6,136 Cr revenue (FY25). Net profit? ₹150 Cr with margins of 7.9%. At ₹915/share, the market values it at ₹10,967 Cr, P/E ~73×, PB ~6.3×. Promoter pledges stand at 59.3%—the financial equivalent of a doctor prescribing paracetamol for cancer. Is this growth story a healthy investment or a risky overdose?
Introduction
MedPlus has gone from a South India pharmacy to a national retail powerhouse, operating in 12 states and online through MedPlus Mart. Its aggressive store expansion, private label push, and online penetration are strong tailwinds. But investors paying 73× earnings must ask—are we buying a pharmacy or the entire healthcare system? This deep dive checks the vitals: growth, margins, and whether the valuation has a fever.
Business Model (WTF Do They Even Do?)
MedPlus sells medicines, FMCG products, and private labels via company-owned stores. Unlike fragmented chemist networks, it has scale, supply chain integration, and pricing power (discounts up to 80% on chronic therapy). E-commerce contributes 5% revenue, diagnostics add a new growth leg. Private labels (18% revenue) drive higher margins. Roast: Selling paracetamol at discounts is easy, making money from it is harder.
Financials Overview
- Revenue FY25: ₹6,136 Cr
- Net Profit: ₹150 Cr
- EPS: ₹12.6
- Market Cap: ₹10,967 Cr
- P/E: 73×
- ROE/ROCE: 9% / 10.5%
- Debt: ₹1,120 Cr
Steady top-line growth (18% CAGR 3Y) but modest profitability. Working capital days ~54, inventory days ~106—retail dynamics at play.
Valuation
- P/E Approach
Peer average (pharmacy retail/consumer) ~40×. EPS ₹12.6 → fair price ₹504. - EV/EBITDA
EBITDA FY25 ₹487 Cr; assume EV/EBITDA ~15× → EV ₹7,300 Cr → equity fair value ~₹7,300 Cr → per share ₹640. - DCF/Relative
Growth story may justify some premium, fair value DCF ₹600–₹650.
Fair Value Range: ₹500–₹650 vs. current ₹915. Overvalued by 40–80%.
What’s Cooking – News, Triggers, Drama
- Store count rising, focus on Tier-2/3 expansion (71 new stores Q2 FY25).
- Diagnostic business ramping up (3 centers, 110 collection points).
- E-commerce scaling with 2-hour delivery in metros.
- Bad meds: multiple store license suspensions in July 2025 (minor revenue hit).
- Promoter pledges 59.3%—big governance concern.
Balance Sheet
| Item | ₹ Cr |
|---|---|
| Total Assets | 3,360 |
| Equity | 1,741 |
| Borrowings | 1,120 |
| Other Liabilities | 500 |
Auditor quip: Leverage manageable, but pledged shares = pharmacy’s dark corner.
Cash Flow – Sab Number Game Hai
| Year | Operating | Investing | Financing | Net Cash |
|---|---|---|---|---|
| 2023 | 144 Cr | –83 Cr | –198 Cr | –137 Cr |
| 2024 | 540 Cr | –318 Cr | –228 Cr | –5 Cr |
| 2025 | 540 Cr | –318 Cr | –228 Cr | –5 Cr |
Cash flows are improving but capex-heavy; financing outflows reflect expansion.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 9% |
| ROCE | 10.5% |
| P/E | 73× |
| PAT Margin | 7.9% |
| D/E | 0.64 |
Stand-up: Ratios whisper “steady business” but scream “crazy valuation.”
P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| 2023 | 5,625 Cr | 355 Cr | 66 Cr |
| 2024 | 6,136 Cr | 487 Cr | 150 Cr |
| 2025 | 6,136 Cr | 487 Cr | 150 Cr |
Top-line healthy, bottom-line improved, but no explosive growth to justify the P/E.
Peer Comparison
| Peer | Revenue | PAT | P/E |
|---|---|---|---|
| MedPlus | 6,136 Cr | 150 Cr | 73× |
| Entero Healthcare | 5,096 Cr | 95 Cr | 60× |
| Apollo Pharm (est.) | 25,000 Cr | 1,100 Cr | 50× |
MedPlus trades at a premium despite lower scale and margins.
Miscellaneous – Shareholding, Promoters
Promoter holding stable at 40.3% but 59.3% pledged. FIIs rising (16.4%), DIIs ~26%, public 17%.
Promoter roast: Stake pledged like a pawn shop—investors hold the risk.
EduInvesting Verdict™
MedPlus is a rare pharmacy retail play with scale, private labels, and online integration. The business fundamentals are solid, with consistent store expansion and diagnostic diversification. But profitability is still thin, leverage moderate, and promoter pledges a red flag. At 73× earnings, the market is pricing it like a high-growth tech stock, not a retail pharmacy.
SWOT Snapshot:
- Strengths: Nationwide presence, private label margins, omnichannel model.
- Weaknesses: High pledges, thin margins, modest ROE.
- Opportunities: Diagnostic growth, Tier-3 expansion, e-commerce scaling.
- Threats: Regulatory store suspensions, competition, valuation risk.
Conclusion: MedPlus is fundamentally healthy but trading at a risky premium. Unless growth accelerates or pledges clear, investors may end up overpaying for a strip of paracetamol.
Written by EduInvesting Team | August 1, 2025
SEO Tags: MedPlus Health, pharmacy retail India, MedPlus valuation, MedPlus stock analysis
