MedPlus Q1: consolidated PAT falls 22% YoY to ₹33 Cr despite 22% revenue growth as margins squeeze

MedPlus Health Services reported a Q1 FY27 (quarter ended 30 June 2026) where the topline and the bottom line moved in opposite directions on a consolidated basis. Revenue from operations rose 21.8% YoY to ₹1,879.6 Cr — powered by the retail pharmacy segment (₹1,842.4 Cr, +21.8%) as the company kept adding stores — but consolidated net profit fell 21.7% YoY to ₹33.2 Cr from ₹42.3 Cr a year ago, and slumped 48% sequentially from ₹64.0 Cr in Q4. EPS more than halved QoQ to ₹2.76 from ₹5.33. This is a growth-with-margin-compression print, not a profit story: net margin narrowed to 1.76% from 2.72% a year ago and 3.39% last quarter, and operating margin (my computation) eased to ~7.1% from 8.47% YoY and 9.07% QoQ.

The squeeze sits on gross margin and fixed-cost deleverage from the store-expansion push. Gross margin fell to ~24.5% from ~26.1% YoY (and ~26.5% in Q4) as purchases of stock-in-trade grew 38.6% YoY, outpacing the 21.8% revenue growth. Below the gross line, the cost of scaling shows: employee expense +20.7%, depreciation +18.7% and finance costs +21.6% YoY — all consistent with the ~600-stores-a-year footprint build, which lifts revenue but drags near-term profitability as new stores mature. The retail segment result actually shrank to ₹31.6 Cr from ₹44.9 Cr YoY despite the revenue jump; diagnostics was the bright spot, improving to ₹2.3 Cr from ₹0.08 Cr.

The stock went into the print at ₹793, down 6.1% over the past month of trading.

For context: revenue is at a 6-quarter high.

Standalone — revenue ₹222.6 Cr (+21.1% YoY), PAT ₹17.5 Cr (+28.9% YoY) — standalone profit grew while consolidated fell, i.e. subsidiary/store-level drag sits in consolidation

Against management's own last-call framing this is a partial miss: the Feb-2026 concall guided to continued store additions (delivered, per the cost base) and — critically — stable gross margins near-term with long-term expansion via private-label/non-pharma mix. Gross margin did not hold stable; it compressed ~160 bps YoY, contradicting that outlook this quarter. The company gave no formal revenue guidance, and no published street/consensus estimate for this specific quarter could be found, so the print can't be scored against a number. Alongside the result, the board approved two diversification capexes — a Food Park with a cold-press oil unit (~₹40 Cr) and a subscription-based Concierge Health & Wellness facility (~₹115 Cr, ₹90 Cr capex) — and appointed a new Company Secretary. Set against a run of subsidiary drug-license suspensions across Karnataka, Maharashtra and Bangalore through June–July, the quarter reads as expansion continuing while unit economics and regulatory friction pressure the margin line.