MedPlus Health Services: A Deep Dive into Q2 FY26 Performance

MedPlus Health Services Limited has delivered a robust performance in the second quarter of fiscal year 2026, showcasing strategic clarity and disciplined execution. The company reported a consolidated revenue of INR 1,679.3 crore, marking a healthy 6.5% year-on-year growth. Operating EBITDA saw a significant uplift, increasing by 20% year-on-year to INR 88.65 crore, with the operating EBITDA margin expanding to 5.3%. This strong financial showing underscores MedPlus's continued momentum in the competitive pharmacy retail sector.

The company's growth is primarily driven by its extensive pharmacy operations, which contribute approximately 99% of its total revenues. Pharmacy operations grew by 8.8% on a year-on-year GMV basis and 6.3% on a net basis. The pharmacy operating EBITDA stood at INR 83.9 crore, representing a 5.1% margin. The diagnostics segment also demonstrated improved profitability, with revenue growing to INR 33.25 crore in Q2 FY26 from INR 28.31 crore in Q2 FY25, and an operating EBITDA of INR 5.09 crore, translating to a 15.3% margin.

Strategic Expansion and Network Growth

MedPlus continues its aggressive network expansion, adding a net of 117 stores during the quarter, bringing the total store count to 4,930. The management is confident in achieving its target of 600 new store additions for fiscal year 2026, with plans to compensate for any first-half shortfalls in the latter half of the year. This expansion is guided by a cluster-based strategy, focusing on deeper penetration in existing strong markets (metros and Tier-One cities) and replicating success in newer regions. Approximately 22% of the stores have been operational for less than two years, indicating a young and growing network.

Private Label and Omni-Channel Prowess

The private label segment remains a key focus for MedPlus, contributing 21.5% to total revenues in Q2 FY26. This includes 12.1% from pharma private labels and 9.6% from non-pharma. The company boasts a curated private label basket of over 1,450 SKUs. Growth in non-pharma private labels has been particularly strong, driven by strategic store redesigns that encourage impulsive buying and the introduction of a wider assortment of new FMCG products. This strategy not only boosts margins but also enhances customer engagement and wallet share.

MedPlus is leveraging its extensive in-house technology platform to strengthen its omni-channel offering. The company's hyperlocal store presence enables a competitive 2-hour delivery proposition, which online-only players struggle to match. This integrated approach expands the target addressable market and improves customer retention, further solidifying MedPlus's market position.

Operational Efficiency and Future Outlook

The company has made significant strides in operational efficiency, including strengthening its back-end infrastructure with 10 new warehouses added over the last 18 months. This supports long-term scalability and seamless execution. Furthermore, MedPlus has implemented a retention plan for its store-level workforce, which has led to a significant reduction in attrition in major cities, improving employee stability and operational continuity.

Looking ahead, MedPlus aims for its Same-Store Sales Growth (SSSG) rate to gradually reach high-single digits (9-10%) within the next two years. The management anticipates moderation in year-on-year employee cost growth from the next quarter. While pre-operative costs have seen a marginal increase due to property bank and new hires, these are considered upfront investments for future growth. The company's focus on disciplined expansion, private label growth, and operational efficiencies positions it for sustained performance in the dynamic Indian pharmacy retail market.