scorecardresearchMedplus Health Services jumps 28% from 52-week low; will the rally continue?

Medplus Health Services jumps 28% from 52-week low; will the rally continue?

Updated: 05 Dec 2022, 06:59 PM IST
TL;DR.
The stock rebounded strongly after reaching a 52-week low of 548.25, and it is now up 28.31 percent from the one-year low levels. Nonetheless, the stock is down 11.6 percent from its IPO price of 796. At the current price, the stock is down 47.62 percent from its all-time high of 1,343.
Medplus made a solid debut on the exchanges on December 23, 2021.

Medplus made a solid debut on the exchanges on December 23, 2021.

Shares of India's second-largest retail pharmacy chain, Medplus Health Services, zoomed 4.36 percent in intraday trade on Monday. 

The stock opened at 678 as against the previous day's closing price of 674. It then climbed further, reaching an intraday high of 748.95 in early trade, but gave up those initial gains and ended the day at 703.50.

The stock rebounded strongly after reaching an all-time low of 548.25 last week, and it is now up by 28.31 percent from its one-year low. Nonetheless, the stock is down 11.6 percent from its IPO price of 796.

Medplus made a solid debut on the exchanges on December 23, 2021. The scrip was listed at a premium of 31 percent around 1,040 on the NSE. A month after it debuted, the stock reached an all-time high of 1,343. The stock, however, was unable to continue its upward trend, dropping nearly 25 percent in the three months leading up to March.

Article
Stock Price chart of MedPlus Health Services.

Investors showed strong interest in the 1,300 crore IPO, and several domestic brokerage firms responded positively due to the company's higher expansion plans and higher growth prospects. The IPO was subscribed 52.59 times.

At the current market price, the stock is down 47.62 percent from its record high of 1,343. The stock has been trading below its IPO price for the last six months.

Despite the stock's weak performance, brokerage firm Nomura earlier in September initiated a "buy" call on the stock with a target price of 925/share. The brokerage firm expects revenue growth for Medplus to accelerate and margins to expand from the current low base, CNBC-TV18 reported.

Nomura expects revenue to grow at a CAGR of 26.9 percent over the financial year2022-2025. The margin is expected to expand to 3.25 percent by FY25.

Medplus reported a 67.48 percent drop in standalone net profit to 6.6 crore in Q2 FY23, compared to a net profit of 20.3 crore in the same quarter of last fiscal year. However, sequentially, the net profit was up by 106.25 percent.

The revenue from operations stood at 1,131.5 crore in the September quarter, up 21.47 percent from 931.5 crore in September 2021. The operating profit came in at 59.7 crore, compared to 52.6 crore in the preceding quarter and 62.1 crore in the year-ago quarter.

The EBITDA margin was at 5.32 percent in Q2 FY23 compared to 6.72 percent in Q2 FY22. Medplus earnings per share (EPS) dropped to 3.2 in Q2 from 4.4 in the June quarter of this fiscal.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

 

Article
What is alpha in stocks
First Published: 05 Dec 2022, 06:59 PM IST