Detailed Narrative
Q4 FY26 Financial Performance Overview
Medplus Health reported a consolidated revenue of ₹1,864.4 crores for Q4 FY26, with pharmacy operations growing by 23.4% year-on-year. The consolidated operating EBITDA stood at ₹107.6 crores, translating to a 5.8% margin. The diagnostics segment also showed strong growth, with Q4 FY26 revenue at ₹34.78 crores, up 23.86% YoY from ₹28.08 crores in Q4 FY25, and operating EBITDA of ₹5.31 crores, a 54.81% YoY increase.
Store Network Expansion and Performance
The company's store network expanded to 5,330 stores by the end of Q4 FY26, adding 218 net new stores during the quarter and 618 net additions for the full year. The total square footage grew to over 2.8 million, with an average store size of 528 square feet. Same-store sales growth (SSSG) for mature stores (older than 12 months) was a robust 17.8%, indicating strong organic performance from established outlets.
Private Label Strategy and Mix
Private label sales contributed 22% to total revenues in Q4 FY26, split between 11.4% from pharma and 10.6% from non-pharma products. Management confirmed that the guidance for private label growth is back on track after restructuring incentives. The company is also pursuing backward integration where possible, manufacturing items like bakery products, cleaning liquids, and other non-pharma goods to enhance its private label offerings.
Franchisee Model Development and Financials
MedPlus is actively expanding its franchisee model, with 310 franchisee stores added in FY26, contributing to the total 800 net new stores planned for FY27. The company invests approximately ₹10 lakhs per store for capex, while franchisees purchase inventory outright from MedPlus, allowing MedPlus to retain a 9.5-10% margin on these sales. Management noted that some franchisee store closures occur as new entrepreneurs' expectations are not always met.
Working Capital and Inventory Management
Net working capital for Q4 FY26 was 53 days. Warehouse inventory stood at 30 days, with a target sustainable range of 30-33 days. Inventory levels for first-year stores were 112 days, while for stores older than 12 months, it was 36 days. The company bears the entire inventory risk for private label products, including expiry and write-off.
FY27 Outlook and Key Targets
For FY27, MedPlus plans to open 800 net new stores, including franchisee outlets. The company aims to stabilize its operating EBITDA margin at 5.7-5.8% in the next year before continuing to grow. Management expects to maintain a same-store sales growth (SSSG) of at least 9-10% on an annual basis. Additionally, there is a project to upgrade or modernize over 600 stores in the current year to accommodate more products.
Zero-Debt Status and Lease Accounting Clarification
Management clarified that the INR120 crores reported as interest expense is entirely related to lease accounting under Ind AS. They explicitly stated that there is no external loan in the company's books, confirming MedPlus as a 'zero-debt company.' This distinction is crucial for understanding the company's financial leverage and capital structure.