Entero Healthcare Solutions , a leading healthcare distribution company, has reported a robust quarterly performance with significant revenue growth and margin expansion. The company has also unveiled an ambitious acquisition strategy focused on the MedTech sector.

Financial Highlights

• Revenue grew by 20.8% year-on-year to INR 1,571.00 crores in the latest quarter
• EBITDA margins expanded to 4.00%
• Organic growth stood at 13.40% year-on-year, outpacing the Indian Pharmaceutical Market (IPM) growth rate of 7.30%

Acquisition Strategy

Entero Healthcare has announced plans to complete seven MedTech acquisitions worth INR 1,000.00 crores in proforma revenues. This strategic move is expected to boost the company's financial profile:

• Gross margins are anticipated to improve by 70-90 basis points
• EBITDA margins are projected to increase by 50-75 basis points
• 60% of M&A activity is focused on the higher-margin MedTech segment

MedTech Focus

The company's increased focus on the MedTech sector is driven by several factors:

• MedTech distributors typically enjoy EBITDA margins of 10.00% or higher
• The MedTech segment is growing faster than the traditional pharmaceutical distribution business
• Entero's representation in MedTech is expected to reach 14-15% of its overall business post-consolidation

Working Capital Management

Entero Healthcare has made significant strides in optimizing its working capital:

• Net working capital days improved from 69 days a year ago to 63 days in the current quarter
• The company aims to further reduce working capital days to around 60 by the end of the fiscal year
• These improvements are expected to generate positive operating cash flow of over INR 100.00 crores for the year

Future Outlook

Entero Healthcare remains confident about its growth trajectory and margin expansion. The company expects:

• To close FY26 with EBITDA margins above 4.00%
• Post-acquisition EBITDA margins to potentially reach 4.50% to 4.75%
• Continued focus on increasing wallet share within existing customers
• Expansion into higher-margin product categories

The company's strategic moves in the MedTech sector, coupled with its strong organic growth and improved operational efficiency, position Entero Healthcare for continued success in the evolving healthcare distribution landscape.

Financial Performance Overview

Entero Healthcare Solutions Limited , a leading healthcare supply chain company, has reported strong financial results for the second quarter of fiscal year 2026, along with significant strategic moves to expand its MedTech operations.

Financial Highlights

For Q2FY26, Entero Healthcare reported consolidated revenue of Rs. 15,709.48 crore, marking a robust 21% year-on-year growth. The company achieved an EBITDA of Rs. 621.00 crore, representing a 4% margin, and a Profit After Tax (PAT) of Rs. 366.00 crore, translating to a 2.3% PAT margin.

Key financial metrics for Q2FY26 include:

The company's performance shows significant improvement in profitability, with EBITDA and PAT growth outpacing revenue growth.

Strategic Acquisitions in MedTech Segment

Entero Healthcare announced two margin-accretive acquisitions in the MedTech segment:

1. Bioaide Technologies Private Limited: The company plans to acquire an 80% stake for Rs. 31.13-36.00 crore.
2. Anand Chemiceutics Private Limited: A binding MoU has been signed to acquire a 51% stake for Rs. 210.00-230.00 crore.

These acquisitions are expected to generate Rs. 1,000.00 crore in annualized revenue and improve the company's gross margins by 70-90 basis points and EBITDA margins by 50-75 basis points.

Operational Highlights

• Customer base expanded to 85,300+ retail pharmacies and 2,800+ hospitals.
• Relationships with 2,800+ healthcare product manufacturers.
• Presence in 20 states, 47 cities, and 490 districts across India.
• 113 warehouses with a total area of 610,169 sq ft.

Management Commentary

Prabhat Agrawal, Promoter, Managing Director and CEO, stated, "The quarter reflects continuation of strong growth trajectory and margin expansion. We achieved an EBITDA Margin of 4% through focus on gross margin expansion along with improvement in net working capital days. As we complete the first half of the year, we remain on-track to deliver on our full-year guidance."

He added, "We are expanding significantly in the MedTech segment through new acquisitions which marked a pivotal step forward- a move that creates meaningful synergies with our existing pharmaceutical distribution and enhances our overall margin profile."

Future Outlook

With stronger momentum and visibility in the second half of the financial year, Entero Healthcare is well-positioned to accelerate growth, deliver margin improvement, and generate operating cash flow. The strategic acquisitions in the MedTech segment are expected to complement the company's existing operations and contribute to its long-term growth strategy.

Investors and analysts will be watching closely to see how these acquisitions integrate with Entero's existing business and contribute to the company's financial performance in the coming quarters.