July 21 (Reuters) – Indian Pharmacy retail-chain operator MedPlus Health Services on Tuesday reported an about 22% plunge in first-quarter net profit, hurt by rising competition and increasing costs due to an aggressive store expansion strategy.
• The company reported a consolidated net profit of 331.8 million rupees ($3.45 million) for the three months ended June 30, down from 423.6 million rupees a year earlier
• Costs associated with expansion for India’s second-largest pharmacy retailer in terms of number of stores operated, crimped margins
• Analysts had noted that the company’s store expansion and rising adoption of diabetes and obesity treatments are expected to drive long-term growth in India’s organised pharmacy retail
• MedPlus reported a 21.8% increase in quarterly revenue to 18.8 billion rupees, helped by a 22% growth in retail sales
• Its Optival Health Solutions unit approved a 400 million rupees capex for a food Park with a cold-press oil extraction unit. It also plans a 1.15 billion investment for a subscription-based concierge health and wellness services facility
• MedPlus, which competes with unlisted peers such as Tata 1mg, Apollo Pharmacy and Reliance Retail’s Netmeds, has plans to open 800 stores this financial year.
($1 = 96.2350 Indian rupees)
(Reporting by Saikeerthi in Bengaluru and Urvi Dugar; Editing by Joyjeet Das)
