Medplus Health Services Stock Drops Following Rs.950 Crore Block Deal

Medplus Health Services Ltd. saw its shares fall by around 3% in early trading after the announcement of a large block deal today. The transaction involved 1.5 crore shares, or 12.8% of the company, being exchanged at Rs.616 per share, totaling approximately Rs.950 crore which caused a significant spike in trading volumes, with two crore shares changing hands compared to the usual daily average of two lakh shares.

Stock Performance & Volume Surge

Following the block deal, Medplus Health Services’ stock dropped to a low of Rs.616 on the NSE. As of the latest update, the stock was trading at Rs.623, marking a  decrease from the previous close. The decline reflects a broader trend, as the stock has fallen over 31% in the past year.

Financials & Business Challenges

In its recent Q1FY25 update, Medplus reported a 29% increase in revenue, reaching Rs.1,284.29 crore compared to Rs.993.65 crore in the same period last year. Despite this revenue growth, the company experienced a sharp 86% decline in PAT, which fell to Rs.3.76 crore from Rs.26.55 crore in the preceding quarter. EBITDA also showed a year-on-year increase of 28.6% to Rs.80.73 crore but dropped 15.3% from the previous quarter’s Rs.95.33 crore.

Overall, the company’s financial performance has been affected by its aggressive expansion strategy, including new store establishments, entry into the diagnostics sector, and the launch of low-cost generics. While revenue from new stores has met expectations, the diagnostics segment is currently near break-even, with expansion plans focused on Hyderabad.

Analyst Outlook

Despite all the challenges, Medplus Health Services maintains a positive outlook from analysts. Although the stock’s price target has been lowered, there is still confidence that the company is well-positioned to benefit from the shift toward organized pharmacy segments and the increasing demand for affordable generics.

Conclusion: In conclusion, this block deal has showcased the volatility in Medplus Health Services’ stock, with a notable drop in price and a surge in trading activity. How the company addresses its financial and operational challenges will be interesting to see.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.