MedPlus looks to set up own pharma mfg units
Will expand pharmacy retail network by adding 800 new stores with Rs240 cr in FY24, says its MD &CEO Madhukar Reddy
image for illustrative purpose
Hyderabad City-based pharmacy retail chain MedPlus Health Services Ltd, which recently launched sales of its own brand of generic medicines at an enticing discount range of 50-80 per cent, is now looking to set up its own pharmaceutical manufacturing units.
Speaking exclusively to Bizz Buzz, Gangadi Madhukar Reddy, the company’s Managing Director and Chief Executive Officer, said MedPlus is currently sourcing generic medicines from sixtop vendors in the country. “But we will eventually start producing some of the off-patented medicines we are selling. Maybe in a year or so, we will start (manufacturing),” he stated.
The retail chain which is currently selling 500 generic medicines under its own brand is planning to increase the number of drugs under it to 800 in one and a half months. “But it is not possible for a single company to manufacture all of them. We will manufacture around 500 medicines, especially those with high sales numbers,” he said.
Reddy said the MedPlus brand of generic medicinesreceived overwhelming response from customers.
“These off-patented drugs now account for 15 per cent of our total sales. We expect this to increase to 40-50 per cent in future,” he said.
At present, MedPlus is selling the generic medicines in Hyderabad and rest of Telangana. “We will commence their sales across all our 4,000 stores in seven States from September 1,” Reddy said.
On the network expansion, he said the company will open 800 new stores with an investment of Rs240 crore, in the current financial year. It will speed up expansion drive from next year onwards after completing the roll-out of its private label medicines.
The pharmacy retail chain is eyeing better EBITDA in coming years. “A combination of product mix, better sales at store level and scale benefits at the backend will drive the margins to 5 to 6 per cent or even to 7 per cent at some point. But 6 per cent is easily achievable,” Reddy said. Currently, the company is churning out margins between 3 to 3.6 per cent. “Last quarter (Q4FY23), we delivered 3.6 per cent. It will be slightly weaker in the first quarter. Usually, Q1 is weaker because of the summer season as people travel and infections are low. But the other three quarters (Q2, Q3, Q4) are better,” he said. According to him, the company’s revenues will continue to grow as it’s opening new stores. “This year, our revenues will grow at 30 per cent. Last financial year, we did around Rs 4,500 crore. Our revenues will be in the range of Rs 5,700 crore-6,000 crore in this financial year,” he said.
