QMS Medical Allied Services FY26: Revenue grows, but margins soften as services scale up

QMS Medical Allied Services ended FY26 with steady top-line growth and a clearer shift toward healthcare services. The company reported revenue from operations of Rs 172.9 crore, up 11 percent from Rs 156.0 crore in FY25. Operating profitability stayed broadly stable, with EBITDA at Rs 25.9 crore versus Rs 25.4 crore last year, but margins eased. EBITDA margin fell to 15.0 percent from 16.3 percent, while PAT declined to Rs 11.9 crore from Rs 13.7 crore.

Management described FY26 as a year of steady progress, driven by long-standing relationships across the healthcare ecosystem and improving momentum in services. The year also reflected a business in transition. Products remained the backbone, but patient programs and camp-led healthcare engagement continued to expand in scale and importance.

A two-engine model: products stay dominant, services keep gaining share

QMS operates as an integrated healthcare solutions provider with two primary verticals.

The first is the products business, built on roughly three decades of distribution experience and partnerships with global medical device brands. The presentation highlights a portfolio of over 900 SKUs and a nationwide servicing capability across 5,000 plus pin codes. In FY26, the company disclosed product revenue of Rs 119 crore, representing 69 percent of consolidated revenue.

Within products, the largest channel was sales to pharma companies and hospitals. QMS reported Rs 99 crore of revenue from this route in FY26 and also noted that it started supplying to hospitals in the last fiscal for nationwide distribution. Point-of-care contributed Rs 19 crore, supported by consumables used during camps and clinic programs. E-commerce remained small at Rs 1 crore, but the company positioned it as a strategic channel through its owned platform, QMSMEDS.

The second engine is services. In FY26, services accounted for 31 percent of revenue, or about Rs 53.9 crore. This includes B2B healthcare camps and Patient Support Programs.

B2B camps continued to scale. The company reported conducting 32,380 camps in FY26, up from 30,393 in FY25 and 24,823 in FY24. Revenue from this vertical rose to Rs 22.9 crore in FY26 from Rs 17.5 crore in FY25.

Patient Support Programs, which include Saarathi Healthcare, delivered Rs 30 crore in FY26. The company describes PSPs as structured patient outreach and therapy adherence programs designed for chronic disease management. The stated scope spans the patient journey from screening and early diagnosis to therapy initiation, device integration, reminders, and lifestyle coaching.

FY26 profitability: EBITDA stable, PAT declines

The income statement shows the year’s trade-offs clearly. While revenue increased, margins narrowed.

Gross profit for FY26 was Rs 80.2 crore with a gross margin of 46.4 percent, slightly lower than FY25’s 47.7 percent. EBITDA rose marginally to Rs 25.9 crore, but the margin declined to 15.0 percent.

Below EBITDA, higher finance costs weighed on net profit. FY26 finance cost increased to Rs 6.6 crore from Rs 4.6 crore in FY25. PAT fell 13 percent YoY to Rs 11.9 crore, and PAT margin declined to 6.9 percent from 8.8 percent.

In Q4FY26, revenue was largely flat at Rs 44.4 crore compared to Rs 44.6 crore in Q4FY25. EBITDA in Q4FY26 was Rs 5.8 crore versus Rs 6.4 crore in Q4FY25. PAT fell to Rs 2.0 crore from Rs 3.6 crore.

The company also disclosed a decline in return ratios in FY26. ROE was 10.5 percent versus 12.8 percent in FY25, and ROCE was 12.2 percent versus 13.9 percent. Debt to equity increased to 0.7x in FY26 from 0.6x in FY25, and interest coverage fell to 3.5x from 5.0x.

Strategy: own-brand products, tech-led PSP, and Saarathi integration

The strategic narrative in the presentation centers on building a differentiated, technology-enabled healthcare platform that serves pharma companies, healthcare professionals, and patients.

A key product-side initiative is Q-Devices, launched in 2023. The company states that an own brand offers better control on quality and supply chain and can improve margins. The brand also complements QMS’s partner-led sourcing relationships and expands the product range across home-care and wellness devices.

On the services side, PSP is positioned as the long-term growth opportunity. Management noted that pharmaceutical companies are increasingly focused on patient outcomes and personalized care. The company’s proprietary platform is described as an in-house integrated digital health application with centralized CRM and AWS hosting. The presentation claims the platform supports tele-intervention, field intervention, phygital care models, patient assistance and diagnostic programs, with real-time analytics for patient tracking and engagement.

The integration of Saarathi Healthcare is a central part of this roadmap. QMS acquired a 76 percent stake in Saarathi Healthcare Pvt Ltd, described as a pioneer in patient and disease management services and phygital solutions. Management stated that this strengthens QMS’s PSP presence and helps it offer more comprehensive patient engagement and therapy adherence solutions.

The roadmap slide also highlights expansion levers such as point-of-care growth and access through the eGrameen portal. The company states it is a government-approved vendor on the eGrameen portal and frames this as a way to improve access in rural and semi-urban markets.

Note: Percentages are computed using FY26 revenue from operations of Rs 172.9 crore and may not sum perfectly due to rounding.

Balance sheet and cash flows: growth with working capital pressure

The balance sheet points to a working-capital-heavy model, which is common in distribution businesses and execution-heavy service models, but it still matters for funding and risk.

As of Mar-26, inventories were Rs 45.9 crore and trade receivables were Rs 67.3 crore. Short-term borrowings increased to Rs 67.5 crore from Rs 50.8 crore in Mar-25. Total assets rose to Rs 212.8 crore at Mar-26 from Rs 190.0 crore at Mar-25.

Cash and cash equivalents were Rs 1.2 crore at Mar-26, broadly similar to the FY26 closing cash balance in the cash flow statement. Operating cash flow was positive, with net cash from operating activities of Rs 19.4 crore in FY26, while investing cash flow was negative at Rs -20.4 crore.

What FY26 signals for investors

QMS Medical Allied Services is building a broader healthcare engagement platform that combines distribution, camp execution, and tech-led patient programs. FY26 strengthened the proof points on scale, especially in services. Camp volume continued to rise, PSP revenue including Saarathi reached Rs 30 crore, and the overall revenue mix edged further toward services.

At the same time, FY26 also highlights the financial discipline needed to support this scale. PAT declined despite revenue growth, finance costs rose, and leverage metrics weakened modestly. The next phase of the story will depend on how efficiently the company can scale PSP and allied services while protecting margins and managing working capital.

Management’s stated priorities are clear: expand PSP into new therapy areas, strengthen the product portfolio including Q-Devices, and use technology to improve patient outcomes. Investors will likely track whether these initiatives translate into durable margin improvement and better return ratios as the services business becomes a larger share of QMS’s revenue base.