BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Yes Securities' IPO Report
A physical presence coupled with a readiness to handle online mean MedPlus Health Services Ltd. is positioning itself for growth in the both the channels. We understand unit store economics for a mature store doing in excess of 10% Ebitda margin translates in to ~20% return on capital employed after accounting for 22 days of warehouse inventory and corporate costs.
Albeit, we believe it might be difficult to grow ROCE beyond a point even at a mature store level. Moreover, at a company level, it would be difficult to extrapolate store level economics as corporate costs and need to open new stores would consistently act as a drag on margin and ROCE.
Indeed, there will also be cases of new stores earning less than 10% margin which would act as a drag. Given the fragmented market, we think there is space for MedPlus Health and others like it to grow.
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