Medplus Health Services Ltd (MEDPLUS) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Medplus Health Services Limited earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivas from Medplus Health
Moderator: Thank you, and over to you, sir.
Srinivas (Medplus Health Services Ltd): Thank you. Good evening everyone, on behalf of MedPlus, it's my utmost pleasure to welcome you all to the MedPlus Q2 FY27 earnings conference call to discuss the financial results of MedPlus for the second quarter of FY27, which were announced earlier. We have with us today the senior management, represented by Mr. Madhukar Reddy Gangadi, CEO and MD, and Mr. Sujit Mahato, CFO. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties on slide one of the investor presentation shared with all of you earlier. Documents relating to our financial performance were circulated earlier, and these have also been posted on our corporate website. I would now hand over the call to Sujit. Thank you, and over to you, Sujit.
Sujit Mahato (Medplus Health Services Ltd): Thank you Srinivas, and good evening everyone on this call. An update on our network in terms of openings and closures. We have opened 219 stores and there were 53 store closures, including 14 relocation cases and 23 franchisee outlet closures. We achieved a net addition of 166 stores, including net addition of 82 franchisee outlets during the quarter, compared to the 146 stores added during the last quarter. We continue with the outlook for adding 800 net new stores, including the franchisee outlets in FY27. An update on the store network. In terms of our store network's age, around 29% of our stores have been operational for less than two years, and the remaining 71% of our stores have been operational for two years or more. In terms of the store size, at quarter end, our network consists of 5,642 stores, including 849 franchisee outlets, spanning over 3 million sq ft. This compares with 5,476 stores, including 664 franchisee outlets as of June 2026. The average store size stood at 539 sq ft. During the quarter, we added 82 franchisee stores and converted 103 COCO stores to franchise model. An update on the revenue mix. Presently, MedPlus offers a large range of SKUs spanning across pharma and non-pharmaceutical categories. Private label sales for quarter two FY27 constitute 21.4%, pharma being 10.7% and non-pharma 10.7% of our total revenues. Private label non-pharma sales grew by 18% quarter-on-quarter, with the sales mix improving from 9.8% to 10.7%, primarily due to improvement in supplies post quarter four FY26. We plan to further expand the product range to drive growth and increase the private label non-pharma sales mix. Private label pharma sales grew by 5.9% quarter-on-quarter, while the sales mix declined marginally from 11% to 10.7%. Gross margins increased from 24.5% in quarter one FY27 to 25.1% in quarter two FY27, driven by higher private label sales mix and lower discounts. During the quarter, we updated the presentation of revenue mix by product category on slide 13 of the investor presentation by reclassifying revenues from franchisees previously included under others into the respective product category. To ensure comparability and consistency, the same reclassification has been applied retrospectively to the preceding quarters, covering all the periods presented. Our consolidated revenue for the quarter stood at 20,371 million. Our consolidated operating EBITDA for the quarter stood at 981 million, representing 4.8%. This quarter included a one-time benefit of rupees 79.6 million. This relates to the reversal of retention bonus provision for store employees. Excluding this reversal, consolidated operating EBITDA for the quarter would have been 901 million,
Sujit Mahato (Medplus Health Services Ltd): representing 4.4%. Revenue from pharmacy operations grew by 21.3% on a year-on-year reported basis. The pharmacy operating EBITDA stood at 885 million rupees, representing 4.4%. An update on our store performance. Stores older than 12 months. Revenue from these stores in quarter two was 17,325 million representing 93% of our pharmacy revenue. These stores had a store-level EBITDA margin of 11.7%. A word here on the store-level EBITDA margin by age. While stores greater than 12 months had a margin of 11.7%, this was 11.9% for stores greater than 24 months, and 8.4% for stores in the 13 months to 24 months age bracket. On allocating all non-store related costs, the operating EBITDA of stores greater than 12 months would be 945 million rupees, which translates to a margin of 5.4%. An update on our working capital. Our net working capital for Q2 was 54 days. The inventory in our warehouse was 34 days. In quarter two, the inventory level of our first-year stores was 86 days. In comparison, for our stores older than 12 months, the inventory was 34 days. An update on our diagnostic numbers. Diagnostics revenue for the current quarter grew to 410.5 million compared to 332.5 million in quarter two FY26. Diagnostics segment recorded an operating EBITDA of rupees 97.9 million representing 23.8% compared to rupees 50.9 million in quarter two FY26. In July, we sold 648 plans per day. In August and September, this was 640 and 657 respectively. As on 30th September, we had around 2.16 lakh active plans. That concludes our update for the quarter. I request the host to open the line for questions.
Moderator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Paresh Choudhary with Latent Advisors PMS. Please go ahead.
Paresh Choudhary (Latent Advisors PMS): Hi. Can you hear me?
Madhukar Reddy Gangadi (Medplus Health Services Ltd): Yes, Paresh. Please go ahead.
Paresh Choudhary (Latent Advisors PMS): Yeah. So in the previous calls, we had given a commentary that we expected the franchisees to have a higher sell higher share of private label products as compared to the COCO. So how has it played out on ground if we if you could give some like-to-like comparison of let us say some geography?
Madhukar Reddy Gangadi (Medplus Health Services Ltd): So we'll have to come back to you with details on that. Maybe starting next quarter, we will actually start spitting out the franchisee numbers for all of you. But for now, I think it is more or less in line with what the company has. The private label sales are a function of two things: typically, the region in which the store is and the vintage of the store. So for a rural franchisee, the private label is bound to be higher versus a city store, and obviously, the while we expect that the franchisee will do more private label as we go forward, initially, it is still going to be less. So given that most of our guys are still new, it may still not be at the same level as the overall company.
Paresh Choudhary (Latent Advisors PMS): Got it. That's it from my side.
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