MD Medical: revenue up 28.8%, but margins compress and dividend stays flat

On August 25, MD Medical released its results for the first half of 2026. Revenue grew 28.8% year-on-year, EBITDA 20.0%, and net profit 5.1%. This review examines what is behind the slowdown in profit and how the company balances growth with dividend payments.

Key takeaways

— Revenue for the half-year grew 28.8%, but EBITDA margin fell from 30.2% to 28.2%

— Net profit rose only 5.1% due to net margin compression from 26.3% to 21.5%

— Debt increased by RUB 3.4 bn in the quarter and RUB 6.7 bn over the year, but net debt/EBITDA remains low at 0.23

— Dividend over 12 months is RUB 89 per share, yield 6.9%, close to our fair yield of 7.0%

— The company trades at P/E of 8.7 and EV/EBITDA of 7.3, cheap relative to its own history

— Operating cash flow over 12 months is RUB 13.9 bn, covering investments and dividends

Key figures, RUB bn

Revenue for the half-year grew 28.8%, but EBITDA margin fell from 30.2% to 28.2%

In the first half of 2026, MD Medical's revenue reached RUB 49,000 million, up 28.8% year-on-year. Growth continues at double-digit rates, but operational efficiency has somewhat deteriorated: EBITDA grew 20.0%, while EBITDA margin fell from 30.2% to 28.2%.

The margin decline amid such revenue growth may indicate rising operating expenses, possibly related to network expansion or higher staff costs. Nevertheless, absolute EBITDA growth remains substantial, supporting cash flow.

Net profit rose only 5.1% due to net margin compression from 26.3% to 21.5%

Net profit for the first half of 2026 grew 5.1% year-on-year, notably slower than revenue. Net margin fell from 26.3% to 21.5%, indicating rising costs not fully offset by operating leverage.

The decline in net margin could be due to higher financial expenses or tax burden. In any case, profit growth lags revenue, a key point for shareholders expecting higher dividends.

Debt increased by RUB 3.4 bn in the quarter and RUB 6.7 bn over the year, but net debt/EBITDA remains low at 0.23

Net debt at the latest reporting date was RUB 3,178 million, up RUB 3.4 bn from the previous quarter and RUB 6.7 bn over the last 12 months. Despite the increase, net debt/EBITDA for the trailing twelve months is only 0.23 – a very low level of leverage.

The debt increase is likely related to the investment program and dividend payments. However, at such a low ratio, the company has significant headroom for further growth financing.

Dividend over 12 months is RUB 89 per share, yield 6.9%, close to our fair yield of 7.0%

Over the last 12 months, the company paid RUB 89 per share, providing a dividend yield of 6.9%. Our model estimates the next payment also at RUB 89 per share, implying a forward yield of 6.9% – close to the fair yield of 7.0% for this issuer.

The payout ratio is 0.5 of profit, leaving half of earnings for investments. This approach looks balanced: shareholders receive solid income, while the company retains funds for growth.

The company trades at P/E of 8.7 and EV/EBITDA of 7.3, cheap relative to its own history

Based on trailing twelve-month profit (RUB 11,293.6 million) and current market cap (RUB 98,376.2 million), the P/E ratio is 8.7. EV/EBITDA, calculated on trailing EBITDA (RUB 13,990.2 million), is 7.3.

These multiples look moderate, especially given ROE of 28.3%. If the company maintains growth rates, the current valuation may prove attractive, but margin compression warrants attention.

Operating cash flow over 12 months is RUB 13.9 bn, covering investments and dividends

Operating cash flow for the trailing twelve months was RUB 13,900 million, a solid figure. With net debt of only RUB 3,178 million, the company generates sufficient funds to finance capital expenditures and pay dividends.

Free cash flow is likely positive, confirming the company's ability to sustain its dividend policy. However, the debt increase of RUB 6.7 bn over the year indicates that part of investments is financed through borrowings.

Valuation on the latest reported figures

Bottom line

MD Medical shows strong revenue growth, but profit grows slower due to margin compression. Debt burden remains minimal, and dividend yield is attractive. The key question for shareholders is whether the company can stabilize margins and convert revenue growth into profit growth. If not, the current valuation may be justified rather than cheap.