MedPlus Health Services Ltd- How does the business work and what are their strategies?

by 5paisa Research Team Last Updated: 2022-12-09T10:19:36+05:30

MedPlus Health Services Limited, or better known as MedPlus, is the 2nd largest pharmacy retailer in the country in terms of revenue from operations and the number of stores opened and operated by them. The company offers a wide range of products which includes the pharmaceutical products, wellness products like medical devices and testing kits, fast- moving consumer goods like personal care products, baby care products, soaps, detergents and sanitizers. 
MedPlus was founded with a vision to set up a retail pharmacy chain that offers medicines and ensures the delivery of a better value to their customers by decreasing inefficiencies in the supply chain, using technology. 
The company started with 48 stores all over the city of Hyderabad and now they have a network of over 2,236 stores that are distributed all across Tamil Nadu, Andhra Pradesh, Telangana, Karnatak, Odisha, West Bengal and Maharashtra. As on 31 September, 2021, MedPlus operated 546 stores in Karnataka, 475 stores in Tamil Nadu, 297 stores in Andhra Pradesh, 474 stores in Telangana, 221 stores in Maharashtra, 89 stores in Odisha and 224 stores in West Bengal. This is a substantial increase from the 2,081 stores operated as on 31 March, 2021.

    1. Business model

Cluster based approach

How does the company open so many stores in succession? This question is easily answered when we take a look at their business model. MedPlus uses a very data analytics driven approach called the cluster based approach to expand their store network. Under this approach, they need to understand the market dynamics, target demographic, ability to support the expansion with warehouses and various distribution centers. Using the cluster based approach the company creates an increased brand visibility by focusing on implementation of marketing and branding strategies in the city that they are operating in. This will in turn increase the market share of MedPlus in the particular city. Now, the company will slowly use this growth model to expand into under-served towns and cities which are adjacent to the one they initially started operating in. They will again repeat the same process and generate more clusters. This approach enables the company to be more cost efficient due to operating leverage in the supply chain and also helps in inventory management.
This approach of MedPlus has allowed it to maintain a healthy store level economics and an average revenue per store of Rs.1.59 crore in FY21. In comparison, the domestic pharmacy retail industry sported an average revenue per store of just Rs.0.23 crore. As of 31 March, 2021, the company opened an average of 1,158 new stores and around 60% to 75% of these newly opened stores managed to witness a positive store level operating EBITDA in the first 3-6 months of operation. The store level operating EBITDA for the mature stores, for FY21 and September 30, 2021 stands at 11% and 11.58% respectively. 

Omni-channel platform

MedPlus has also been hailed as the first pharmacy retailer in the country to offer an omni-channel platform. Since 2015, the customers of MedPlus can either visit the store in order to purchase their goods or log into their website or mobile app and order the goods online. This has helped the company deepen their access to new customers and has also helped enhance the customer convenience experience. As of 30 September, 2021, 8.44% of the company’s revenue can be attributed to online sales. 
In select cities of Hyderabad, Bangalore, Chennai, Pune and Nagpur, the customer receives their order a mere 2 hours after ordering it. According to tests in July 2021, 93% of the online delivery purchases were delivered within 2 hours in a few select cities of Hyderabad. They expect to start these services in Mumbai in December 2021. 

Hub and spoke model

The value chain of the whole company is backward integrated and fully managed and operated by the company themselves. The company has warehouses in Bangalore, Chennai, Hyderabad, Vijaywada, Kolkata, Pune, Bhubaneshwar, Nagpur and Mumbai. They are supported by a few smaller warehouses located in cities. MedPlus usually procures their inventory directly from the pharmaceutical companies. This experience is enhanced by their specially curated private label products which enables them to derive higher margins. 


No. of warehouses as on 30 June, 2021



Tamil Nadu






Andhra Pradesh


West Bengal







1. MedPlus Health Services Ltd group structure:

MedPlus’s private label manufacturing, contract manufacturing business which was started in December 2020 and their pathology and laboratory testing business is carried out by the issuer themselves. Whereas, their wholesale and retail operations along with their sales to franchisees are carried out by their subsidiary. Below is the group structure of the company-

    1. Optival Health Solutions Pvt Ltd
    2. MHS Pharmaceuticals Pvt Ltd
    3. Wynclark Pharmaceuticals Pvt Ltd
    4. Kalyani Medtimes Pvt Ltd
    5. Clearancekart Pvt Ltd
    6. Nova Sud Pharmaceuticals Pvt Ltd
    (a)  Sai Shridhar Pharma Pvt Ltd
    (b) Venkata Krishna Enterprises Pvt Ltd
    (c) Shri Banashankari Pharma Pvt Ltd
    (d) Deccan Medisales Pvt Ltd
    (e) Sidson Pharma Distributors Pvt Ltd

Nova Sud is the holding company of all the companies of MedPlus that are engaged in the distribution of the wellness, FMCG and pharmaceutical products, namely; Sai Shridhar Pharma Pvt Ltd, Venkata Krishna Enterprises Pvt Ltd, Shri Banashankari Pharma Pvt Ltd, Deccan Medisales Pvt Ltd and Sidson Pharma Distributors Pvt Ltd. Kalyani Medtimes Pvt Ltd was acquired by MedPlus in 2019 and through this company, MedPlus owns a software which can convert doctor’s prescriptions into e-prescriptions. 

As on date, Clearancekart Pvt Ltd does not have any operations. MHS Pharmaceutical and Wynclark Pharmaceuticals are engaged in the contract manufacturing of private label pharmaceuticals, FMCG and wellness products. They then supply these products to Optival Health Solutions Pvt Ltd. 

Their subsidiary, Optival Health carries out the company’s wholesale and retail operations which include the sales to franchisees. In FY21 and Q2 ended 30 September 2021, around 3-quarters of MedPlus’s revenue was obtained from the sale of branded pharma products – 76.8% and 74.9% respectively. Private label pharmaceutical products- 5.6% and 6.7% respectively, branded FMCG- 12.9% and 11.6% and, private label FMCG- 4.8% and 6.9% respectively, constituted the remaining revenue generated. 

    2. Pricing
The company provides very competitive pricing and it is lower than any other offline or online pharmacy retailer in the country. Their strategy is to provide high discounts to customers who purchase medicines for a long duration of time thus having a high average order value. In addition to this, they offer a comparatively lower discount to people who do not buy in bulk. The discounts for things other than FMCG and branded pharmaceuticals, they vary from product to product. 

    3. Manufacturing
MedPlus has 3 manufacturing plants that are located in Telangana, in- Jeedimetla, Moosapet and Pashamylaram. In the Jeedimetla manufacturing plant, the company engages in the manufacturing of a wide range of plastic products like medicine trays, nebulizers, vaporizers, plastic bottles and caps. In the Moosapet plant, optical frames and spectacles are manufactured. And, in the Pashamylaram plant, liquid disinfectants, toiletries and cosmetics are manufactured. 

Store count of MedPlus as compared to its peers:


Total store additions from March 2019 to March 2021

31 March, 2021

31 March, 2020

Apollo Pharmacy








Wellness Forever




    4. Key Strategies:
    1. MedPlus plans on entering two new states every year in order to expand their operations. For this they will use the cluster-based approach and the same roll out process 
    2. They have now developed a Hyper-local Delivery Model wherein the products ordered online will be delivered to the customer within 2 hours. This will help in the increase of revenue through online sales and also help grow the store network
    3. The company plans to invest more in the mobile application and website as this will help them in monitoring their customer’s consumption pattern and preferences, more closely. It will also help them better manage customer interactions thus enabling customer retention and driving up the sales
    4. MedPlus plans on augmenting their supply chain management and their distribution infrastructure in order to increase operational efficiency and profitability. They plan on increasing automation in their warehouses and also increase the proportion of products that are procured directly through pharmaceutical companies as these actions would lead to an increase in their gross margins

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