Medplus Health Services Limited, a prominent player in the Indian healthcare retail sector, has reported a regulatory setback for its subsidiary, Optival Health Solutions Private Limited. The company disclosed that Optival received a four-day suspension order for its drug license at a store located in Quthubullapur, Telangana.

Regulatory Action Details

The suspension order, issued by the Assistant Director of Drugs Control Administration, Quthubullapur, Telangana, cites violations under Rule 65 of the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945. The affected store is situated at Modi Splendour, Quthubullapur.

Timeline and Financial Impact

According to the company's filing:

• The suspension order was received on August 14, 2025.
• The regulatory action is expected to result in a potential revenue loss of approximately Rs. 0.80 lakhs for the company.

Compliance and Disclosure

Medplus Health Services Limited promptly reported this development to the stock exchanges on August 15, 2025, in compliance with Regulation 30 read with Para A Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company also adhered to the SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023, and SEBI Circular SEBI/HO/CFD/CFD-PoD-2/CIR/P/2024/185 dated December 31, 2024, in disclosing the details of the matter.

Investor Information

Medplus has assured that the information regarding this suspension will be available on the company's website ( www.medplusindia.com ) as well as on the websites of BSE Limited ( www.bseindia.com ) and National Stock Exchange of India Ltd. ( www.nseindia.com ).

While the immediate financial impact appears limited, this incident highlights the ongoing regulatory challenges faced by pharmaceutical retail chains in India.

Medplus Health Services , one of India's leading pharmacy retail chains, has reported its financial results for the first quarter, showcasing revenue growth and continued expansion of its store network.

Financial Performance

The company reported consolidated revenue of Rs. 15,426.00 million for Q1, with an operating EBITDA of Rs. 728.00 million, representing a 4.7% margin. The pharmacy operations, which account for 99% of the total revenue, grew by 6.6% year-on-year on a Gross Merchandise Billing (GMB) basis and 3.3% on a net basis.

Store Network Expansion

MedPlus continued its aggressive expansion strategy, adding 124 new stores during the quarter. After accounting for 23 store closures, the company achieved a net addition of 101 stores, bringing its total network to 4,813 stores across 2.5 million plus square feet. The management reaffirmed its plan to add 600 new stores in the fiscal year, with around 100 expected to be franchise stores.

Private Label Performance

Private label sales constituted 21.5% of total revenue in Q1, with pharmaceutical private labels accounting for 20.8%. This represents significant growth from 7.9% in Q1 FY24, prior to the launch of MedPlus-branded pharmaceutical products. The company aims to continue growing its private label share by 0.5% to 1% per quarter, balancing it with overall topline growth.

Store Performance Metrics

Stores older than 12 months, which represent 95% of pharmacy revenue, generated Rs. 14,188.00 million with a store-level EBITDA margin of 10.9%. The store-level operating ROCE for these mature stores stood at an impressive 59.8%.

Diagnostic Business Growth

The diagnostic segment showed strong growth, with revenue increasing to Rs. 302.90 million in Q1, compared to Rs. 242.40 million in the same quarter of the previous year. The operating EBITDA margin for this segment improved significantly to 13.6%.

Operational Challenges and Improvements

CEO Gangadi Madhukar Reddy acknowledged supply chain challenges affecting growth but expressed optimism for improvement in coming quarters as backend infrastructure strengthens. The company has operationalized 6 out of 10 planned additional warehouses to enhance its supply chain efficiency.

Working Capital Management

MedPlus reported a net working capital of 59 days for Q1, with warehouse inventory at 36 days. The company continues to focus on optimizing its inventory management across its network.

Future Outlook

While facing some short-term challenges in balancing private label growth with overall sales, MedPlus remains committed to its expansion plans and improving operational efficiency. The management expects to see improved growth in the coming quarters as supply chain enhancements take effect and the company fine-tunes its strategy to balance private label sales with branded products.

Regulatory Update

In a separate announcement, MedPlus Health Services informed that its subsidiary, Optival Health Solutions Private Limited, received suspension orders for drug licenses at eight stores across Karnataka, Telangana, and Maharashtra. The suspensions range from one to fifteen days and are expected to have a minimal financial impact, with potential revenue losses estimated between Rs. 0.42 lakhs to Rs. 12.00 lakhs per affected store.