New-Age Small-Cap Hits 20% UC; Comes Back in Action!

  • Stock Market Analysis
  • Editors Pick

While many new-age businesses have disappointed investors after their IPOs in 2021, things are turning around for most of them now. Zomato (NS: ZOMT ), Paytm (NS: PAYT ), Policy Bazaar, etc. are all reporting increasingly better earnings and MedPlus Health Services Ltd (NS: MEDP ) has also joined the league.

Talking about the company first, it is an online pharmacy & diagnostics business with a market capitalization of INR 8,213 crores and helps customers to access its products, bills and all health records through its online store, and also has physical stores.

Image Description: Weekly chart of MedPlus Health Services with volume bars at the bottom

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As per yesterday’s Q4 FY23 earnings report, the company clocked a revenue of INR 1,266.68 crores and a net profit of INR 26.58 crores, translating into a profit margin of 2.1%, the highest in the last 6 quarters. On an annual basis, MedPlus Health Services clocked a record-high revenue of INR 4,603.66 crores, a 20.8% YoY jump.

It now has a strong network of 3,822 stores in 7 states with over 22K employees, making it the second-largest pharmacy network nationally. Its hyperlocal stores give it a competitive edge in fulfilling a 2-hour delivery with lower costs. It has over 640 pharma products to offer, covering both acute and chronic diseases and 242 non-pharma products.

The stock has also reacted to the positive earnings report with a 20% upper circuit to INR 827.7 as a buying frenzy kicked in as soon as the market opened. It crossed a key hurdle of INR 780 - INR 790 and the stock might now be done with its prolonged downtrend. Although it is up to investors to take a call on how long to hold their shares, the technical setup is pointing to around INR 950 in the next future. Today’s volume has also been astonishing as the NSE recorded a volume of 3.3 million shares, which is the third-highest one-day volume since the listing of the stock in December 2021.

Even if some profit booking takes place in the next couple of sessions, the gist of the analysis is that the prior downtrend has probably ended and it is less likely that MedPlus Health Services shares would retest their all-time low for the next few months, at least.

Read More: Breakout: 2 Small Caps that Went Crazy on Wednesday!

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  • Amit Goel @Amit Goel
    true from technical perspective...from fundamentals point of view, 50% shared pledged by promoter is a red signal
    Like 3

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