In Friday’s trading session, shares of drugstore retailer Medplus Health Services slid more than 2% to 737 on the BSE. Medplus shares, which debuted on the public market in December of last year, were trading below their IPO issue price of $796 per share.
MedPlus reported a 37% decrease in net profit for the quarter ending March 2022, at 11 crores as opposed to 18 crore year on year (YoY). Meanwhile, revenue increased by 20% to 966 crores from 806 crores in the same period last year. During the fourth quarter of FY22, its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin shrank from 120 to 6.8 percent.
Gangadi Madhukar Reddy, the company’s managing director, and chief executive officer launched MedPlus Health in 2006. (CEO). The Hyderabad-based pharmacy retailer provides a diverse range of products, including pharmaceutical and wellness items and FMCG items such as home and personal care items.
MedPlus Health’s initial public offering (IPO) was subscribed to 52.59 times. The public offering included a fresh issue of up to 600 crores and an offer-for-sale (OFS) of up to 798.3 crores. The business intended to use the proceeds from the new issue to cover the working capital requirements of its subsidiary Optival.
MedPlus shares have declined more than 36% since its debut in December 2022, while the newly listed stock is down more than 28% year to date (YTD).
Sharekhan has a Hold recommendation on Medplus shares with a target price of 1,033 because the pharmacy retailer is working on extending its reach and penetration and has announced the opening of 1000 new stores in FY23E, with the firm aiming to maintain the new store momentum moving forward.
According to the brokerage, Medplus intends to profit from the move from unorganised to organised retail of pharmaceutical items in India, taking advantage of the low base of organised pharmacy retail penetration and rising mobile and internet penetration.