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Medplus health IPO, what should you do in Medplus hold or sell

 What should you do in Medplus stock after Listing of its IPO?

From last couple of months most the IPO’s had given multiple returns to investors & traders. Out of which some of companies had unique business model. Now many investors & traders of the Stock market have an eye on Medplus stock hold or sell after IPO listing?  Many IPO bidders could not get allotment of shares in IPO bidding, such investors are confused whether they should buy or sell Medplus stock after IPO listing? Before reaching to any conclusion we have to understand the business model of the company & Positive & negative of the Medplus Company.




Question:

What is the business model of Medplus Company?

Answer:

Mediplus Company had established in the year of 2006. In the last 15 years company has become biggest competitor of Apollo pharmacy. But As compared with Company size, It will not be easy to say that there is any comparison between Apollo Pharmacy and healthcare service & Medplus pharmacy.  Medplus health Services Company is an Indian 2nd largest pharmacy retail chain segment. Company has strong presence in south Side of India which includes Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal, Maharashtra & tamil Nadu. Medplus health Services Company has different pharmaceutical and wellness products into its basket which includes medicines, medical devices, test kits & vitamins. If we will talk about the revenues of the company then mainly revenues comes from retail stores. Company has also strong grip on fast-moving consumer goods like home and personal care products, sanitizers, soaps, and detergents, baby care products, etc.

Question:

What are the positive points about Medplus Company?

Answer:

1) Business of the company is in Demand:

Medplus is a first company who had provided an omni channel platform in India in which customers of the company can purchase products through stores as well by placing orders over the telephone call. Even Company has offered online orders platform in which one deal in one Click and Pick facility. It is one of the demanding services these days.

2)Total retail outlets of Medplus pharmacy in India:

As per the company management, currently, Medplus has nearly 2165 pharmacy outlets in the different states of India which includes Tamil Nadu, Andhra Pradesh, Odisha, West Bengal, Telangana, Karnataka, Maharashtra etc.

3) Total revenues Generated By Company from Different States of India:

If we will check operation revenues generated by company in the percentage form then Chennai, Hyderabad contribute more into company business i.e 30% each & rest of the operational revenues comes from Bangalore & Kolkata i.e 29% to 22% respectively.

4) Company has focus on cluster based Approach:

One thing which makes company unique from other in the market i.e medplus company follows a cluster based approach for the more expansion for its store network. With this approach company has first opens high store density in a populated residential area with the qunique marketing strategy having target market. Medplus has also warehouses in different locations like Bengaluru, Chennai, Kolkata, Hyderabad,Vijaywada,Mumbai, Pune, Bhubaneshwar , and Nagpur. It means that company has also focus on transportation cost which is very impressive step.

5) Company has strong promoters & there is no legal case against the company & its management. The main promoters of the company are Gangadi Madhukar Reddy, Ltd, and Agilemed Investments Pvt Ltd & Lone Furrow Investments Pvt . If any company has not legal case then Company is very good.

6) Funds raising will be used for meeting working capital requirement of its  subsidiary Optival and other General corporate purposes.

Question:

What is the financial performance of Medplus Company?

Answer:

We will calculate the last 3 fiscal year’s results of the company.

Total turnover:

Company had reported total turnover in FY19 nearly 2285cr, in FY20 2888cr, In FY21, total revenues reported 3091cr & In the 1st half of FY22 turnover was nearly 1891cr.

Net profit of Medplus Company:

In FY19 Company had reported net profit of 11.9cr, In FY20 net profit decreased and reach figure at 1.79cr But Again in FY21 net profit of the company increase to 63.1cr. If we will calculate 1st half of the FY22 then company had reported net profit of 66.3cr.

Questions:

Should you hold or sell Medplus stock?

Answer:

Company had  posted excellent earnings in the  last 18 months but it will be important to notice that if   company will be able to sustain such good earnings or not ? as per the company management ,  In FY20 they had done one time provisioning of over Rs. 32 cr. Even Company has not declared any Dividend in the fiscal years. If we will talk about Earnings Per share of Medplus then In the last 3 financial years’s company had average posted EPS of 3.1rs per share.  Company came up with P/BV of nearly 6.7 which also looks bit impressive at a P/BV of 6.7 based on its post-issue NAV of Rs. 117.43 per share. IPO price band range 780rs to 796rs, it also gives some comfort level. We are not saying that Valuations are not high but still we can say that management has left some good profit for shareholders after IPO listing. For long term Investors, Medplus prove to be best bet or long term 1 to 2 years.  

Question:

Should you Buy or sell Medplus stock after IPO listing?

Answer:

Long term Investors can buy Medplus stock even after IPO listing but It is better to buy Medplus stock after some profit booking  because Indian stock market is trading at very higher valuations & we may see profit booking any time. In this situation if Medplus stock price comes down then start accumulate the stock in small number of sets at lower levels.

Long term Target of Medplus are 896rs to 925rs+. We May revise the price targets of Medplus in coming months after analysis the financial performance of the company.

Question:                                                                    

Should you book Profit in Medplus Stock after IPO Listing?

Answer:

If IPO bidders will get profit of 10% to 15% or more   on IPO listing day then It will be better to book profit on higher levels. In any case If Medplus stock will trade above 1000 rs level then Valuations of the Medplus stock will be very high. In this situation do not jump in to the stock & wait for profit booking then news investors can start accumulate “Medplus” stock only for Long term. Should you hold or sell Medplus stock? The Answer is that Investors & Traders can book profit on higher levels & investors can use dip to start  accumulate medplus stock. 

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