Entero Healthcare Solutions reported solid growth in Q3FY26, achieving 17.1% organic like-for-like revenue growth year-to-date. The company generated INR 49 Cr in operating cash flow for the quarter, maintaining an EBITDA margin of 4.0%. Entero also confirmed the closure of major acquisitions, positioning itself for accelerated growth and margin expansion, particularly in the MedTech segment.
Management Commentary and Financial Performance (Q3FY26)
Entero Healthcare Solutions reported a strong quarter, achieving its highest organic like-for-like growth rate of 17.1% year-to-date. The company successfully improved its cash flow, generating INR 49 Cr of operating cashflow during the quarter while sustaining an EBITDA margin of 4.0%.
Management noted that all major acquisitions, focusing on the Medtech segment, have been closed, leading to a strategic positioning for near-term margin expansion.
Q3FY26 Key Financial Highlights
The financial results for the quarter ending December 31, 2025, showed robust performance metrics:
- Revenue growth on an LFL basis was 28.5% YoY, with organic revenue growth on LFL basis at 17.1% YoY.
- Reported revenue growth stood at 25.6% YoY, contrasting with an organic growth of 14.2% YoY.
- Gross margin improved by 30bps YoY to 10.1%.
- EBITDA Margin improved by 29bps YoY to 4.0%.
- PAT Margin was 2.0%, but excluding the one-off impact of INR 6.1Cr related to the New Labour Code, the margin was 2.3%.
- Positive Operating Cashflow (OCF) of Rs. 49 Cr was achieved.
- ROCE improved to 14.8% from 13.8% in the last quarter.
- Three acquisitions closed during the quarter: Anand Medilink Pvt. Ltd., Ace Cardiopathy Solutions Pvt. Ltd., and Bioaide Technologies Pvt. Ltd. The acquisition of Anand Chemiceutics was closed on February 07, 2026.
Revenue Growth Breakdown (Q3FY26 vs 9MFY26)
The total growth for Q3FY26 was 25.6% (Total Growth-LFL at 28.5%). Inorganic growth contributed 11.4%, largely driven by new acquisitions (10.7%).
For the Nine Months ending FY26 (9MFY26), Total Growth was 24.6% (Total Growth-LFL at 27.6%). Organic growth was 12.2%, and inorganic growth stood at 12.4%.
Operating Cash Flow Improvement
The company successfully generated OCF of Rs. 49 cr. in Q3 FY26, marking a significant turnaround from negative OCFs of (Rs. 47.0 cr.) in Q1 FY26 and (Rs. 10.3 cr.) in Q2 FY26. This improvement showcases enhanced net working capital efficiency.
Consolidated Financial Snapshot (Quarterly Comparison)
Comparing Q3FY26 to Q3FY25:
- Revenue grew by +26% (1,707 Cr vs 1,359 Cr).
- Gross Profit grew by +29%, with margins improving from 9.8% to 10.1%.
- EBITDA grew by +36%, with margins moving from 3.7% to 4.0%.
- PAT* (excluding one-off) grew by +36%, with margins slightly increasing from 2.2% to 2.3%.
Consolidated Financial Snapshot (Nine-Months Comparison)
Comparing 9MFY26 to 9MFY25:
- Revenue grew by +25% (4,681 Cr vs 3,757 Cr).
- Gross Profit grew by +33%, margins improving from 9.5% to 10.1%.
- EBITDA saw significant growth of +47%, with margins rising from 3.3% to 3.8%.
- PAT* (excluding one-off) grew by +41%, with margins moving from 2.0% to 2.3%.
Key Balance Sheet Trends (FY25 vs Mar-25)
The consolidated balance sheet as of March 2026 shows growth in assets, including Inventories (659.8 Cr) and Goodwill (424.0 Cr), reflecting inorganic expansion. Total Assets grew to Rs. 2,702.5 Cr.
Acquisition Update and Strategy
Entero is on track to meet Rs. 1,000 Cr Revenue from acquisitions. The acquisition mix is heavily weighted towards MedTech at 61%. The proforma impact suggests margin accretion:
- Gross margin improvement of +70 to 90bps (projected 10.9% to 11.1%).
- EBITDA Margin improvement of +50 to 75bps (projected 4.5% to 4.75%).
The company has completed 7 Acquisitions YTD, including the latest closure of Anand Chemiceutics in February 2026. The strategic rationale for MedTech acquisitions centers on its large, growing market, synergy with pharmaceutical distribution, and a higher margin profile for distributors.
Operational Scale and Market Position
Operational highlights as of 9MFY26 demonstrate significant scale:
- Customers (Retailers): 97,600+.
- SKUs Handled: 89,200+.
- Districts Covered: 505.
- Warehouses: 131.
Entero continues to outperform the industry’s IPM growth rate of 9.4%, achieving LFL growth of 27.6% in 9MFY26, reinforcing its role in market consolidation.
Source: BSE
