Medplus Health Services shares tumble to 52-week low after weak Q1 FY27; Nomura maintains 'Buy', check target price
Nomura noted that Q1 FY27 revenue grew 22 per cent YoY and 1 per cent QoQ (quarter-on-quarter), in line with its estimate.
- Jul 22, 2026,
- Updated Jul 22, 2026 2:53 PM IST
Shares of Medplus Health Services Ltd slumped 17.80 per cent in Wednesday's trade to hit a one-year low of Rs 653.80 following tepid earnings during the June quarter. According to global brokerage Nomura, Medplus reported weak Q1 FY27 results, falling short of its expectations.
"Sales increased at a healthy pace of 22 per cent YoY (year-on-year), 1 per cent ahead of our estimate. Gross profit growth at 14 per cent YoY was the slowest in four years, with gross margin down 163bps YoY. Most of the decline was due to lower contribution from the pharma private label, which recorded only 2 per cent growth YoY," it stated.
"The step-up in franchisee sales also contributed to the YoY gross margin decline to some extent. Overhead expenses significantly increased, with pharmacy salaries up 30 per cent YoY (14 per cent YoY rise on a per-pharmacy basis) and non-pharmacy overhead rising 34 per cent YoY, which could be related to store network expansions in the recent past," Nomura added.
"Operating EBITDA thus declined 11 per cent YoY and came in 29 per cent below our forecast. Net profit declined 22 per cent YoY and was 34 per cent lower than our estimate," the global brokerage also said.
Although, Nomura noted that Q1 FY27 revenue grew 22 per cent YoY and 1 per cent QoQ (quarter-on-quarter), in line with its estimate. "Private label pharma growth was muted at 2 per cent YoY while the branded pharma/branded nonpharma/private label pharma segments grew 20 per cent/17 per cent/30 per cent YoY. Own pharmacy (Company-owned, company-operated – COCO) growth was 18 per cent YoY and franchisee sales growth was 164 per cent. Franchisee sales, at 5.4 per cent, rose significantly from 2.5 per cent in Q1 FY26. Diagnostic segment revenue growth was strong at 22.4 per cent YoY," it stated.
"Mature pharmacy (defined as pharmacies were in operation before FY24 or more than three years old) posted 12 per cent growth YoY. This growth is reasonably strong ahead of the broader market growth," Nomura added.
"The company added 146 stores during the quarter, and most of these additions were made through franchisees. Currently, the company has a network of 5,476 stores, of which ~12 per cent are franchisee stores. Franchisees contributed ~5 per cent to Medplus' pharmacy revenue in Q1 FY27," it further stated.
Additionally, Nomura highlighted that the company's Board has approved a capex plan for setting up a food park, including a cold press oil extraction unit, at Hyderabad, for which around Rs 40 crore will be spent.
"Also, a capex plan for setting up a concierge health & wellness services facility at Hyderabad has been approved, for which the company estimates an investment of ~Rs 115 crore, comprising capex of ~Rs 90 crore," the brokerage also said.
Based on these, Nomura retained its 'Buy' call on the counter with an unchanged 12-month target price of Rs 1,190.
Shares of Medplus Health Services Ltd slumped 17.80 per cent in Wednesday's trade to hit a one-year low of Rs 653.80 following tepid earnings during the June quarter. According to global brokerage Nomura, Medplus reported weak Q1 FY27 results, falling short of its expectations.
"Sales increased at a healthy pace of 22 per cent YoY (year-on-year), 1 per cent ahead of our estimate. Gross profit growth at 14 per cent YoY was the slowest in four years, with gross margin down 163bps YoY. Most of the decline was due to lower contribution from the pharma private label, which recorded only 2 per cent growth YoY," it stated.
"The step-up in franchisee sales also contributed to the YoY gross margin decline to some extent. Overhead expenses significantly increased, with pharmacy salaries up 30 per cent YoY (14 per cent YoY rise on a per-pharmacy basis) and non-pharmacy overhead rising 34 per cent YoY, which could be related to store network expansions in the recent past," Nomura added.
"Operating EBITDA thus declined 11 per cent YoY and came in 29 per cent below our forecast. Net profit declined 22 per cent YoY and was 34 per cent lower than our estimate," the global brokerage also said.
Although, Nomura noted that Q1 FY27 revenue grew 22 per cent YoY and 1 per cent QoQ (quarter-on-quarter), in line with its estimate. "Private label pharma growth was muted at 2 per cent YoY while the branded pharma/branded nonpharma/private label pharma segments grew 20 per cent/17 per cent/30 per cent YoY. Own pharmacy (Company-owned, company-operated – COCO) growth was 18 per cent YoY and franchisee sales growth was 164 per cent. Franchisee sales, at 5.4 per cent, rose significantly from 2.5 per cent in Q1 FY26. Diagnostic segment revenue growth was strong at 22.4 per cent YoY," it stated.
"Mature pharmacy (defined as pharmacies were in operation before FY24 or more than three years old) posted 12 per cent growth YoY. This growth is reasonably strong ahead of the broader market growth," Nomura added.
"The company added 146 stores during the quarter, and most of these additions were made through franchisees. Currently, the company has a network of 5,476 stores, of which ~12 per cent are franchisee stores. Franchisees contributed ~5 per cent to Medplus' pharmacy revenue in Q1 FY27," it further stated.
Additionally, Nomura highlighted that the company's Board has approved a capex plan for setting up a food park, including a cold press oil extraction unit, at Hyderabad, for which around Rs 40 crore will be spent.
"Also, a capex plan for setting up a concierge health & wellness services facility at Hyderabad has been approved, for which the company estimates an investment of ~Rs 115 crore, comprising capex of ~Rs 90 crore," the brokerage also said.
Based on these, Nomura retained its 'Buy' call on the counter with an unchanged 12-month target price of Rs 1,190.