MD Medical: revenue accelerated to +32.1%, but the real question is how much of it reaches the dividend

On August 25, MD Medical reported Q1 2026 results: revenue grew 32.1% YoY to RUB 11,834 million, and over the last 12 months the company earned RUB 11,035 million in net profit. In this review, we look at what is behind the acceleration, how the company finances its construction, and why the dividend yield remains below the fair level.

Key takeaways

— Q1 2026 revenue grew 32.1% – an acceleration from the previous year

— EBITDA margin over the last 12 months is 30.5%, but operating cash flow is almost half that

— Net debt rose by RUB 5.0 billion over the year, but the ratio to EBITDA remains low at 0.06

— Capex and dividends consume all operating cash flow, leaving little for debt reduction

— Shares trade at a discount to their own history: EV/EBITDA of 7.4 vs the 3-year average of 7.3

— Dividend yield of 6.9% is below the fair 7.0%, but the payout is only half covered by profit

Key figures, RUB bn

Q1 2026 revenue grew 32.1% – an acceleration from the previous year

In Q1 2026, MD Medical's revenue reached RUB 11,834 million, up 32.1% from the same quarter a year earlier (RUB 8,958 million). This is a notable acceleration: last year growth was more modest, though exact Q1 2025 figures are not disclosed.

The acceleration looks sustainable, driven by network expansion and higher patient numbers rather than one-offs. However, the company does not disclose revenue breakdown by segment, so we cannot say what contributed the most.

EBITDA margin over the last 12 months is 30.5%, but operating cash flow is almost half that

Over the last 12 months, EBITDA was RUB 13,289 million on revenue of RUB 43,500 million, implying a margin of about 30.5%. That is high for a medical company, but operating cash flow for the same period was RUB 13,900 million, only slightly above EBITDA.

The gap between EBITDA and operating cash flow is explained by working capital growth and tax payments. As a result, the company generates less free cash than one might expect given such a margin.

Net debt rose by RUB 5.0 billion over the year, but the ratio to EBITDA remains low at 0.06

At the end of Q1 2026, net debt stood at RUB 791.9 million, up RUB 5.0 billion over the last 12 months. The net debt to EBITDA ratio for the last 12 months is only 0.06, indicating an extremely conservative debt load.

The debt increase is related to financing capital expenditures and dividends, but even after the increase, debt remains minimal. The company has significant headroom for further growth.

Capex and dividends consume all operating cash flow, leaving little for debt reduction

Over the last 12 months, operating cash flow was RUB 13,900 million, but the company is actively investing in network expansion and paying dividends. Exact capex figures are not disclosed, but it is clear that free cash flow after investments and payouts is close to zero or negative.

This means the RUB 5.0 billion debt increase over the year is not accidental but a consequence of strategy: the company prefers to spend on growth and shareholders rather than reduce leverage. While debt is low, such a policy is justified, but it would become a vulnerability in a downturn.

Shares trade at a discount to their own history: EV/EBITDA of 7.4 vs the 3-year average of 7.3

The current EV/EBITDA multiple is 7.4, only slightly above the three-year average of 7.3. This suggests the market values the company roughly in line with its historical norm, without a significant premium for growth acceleration.

P/E over the last 12 months is 8.9, which also looks moderate for a company with an ROE of 32.5%. Overall, the valuation does not look stretched, but it does not offer an obvious bargain either.

Dividend yield of 6.9% is below the fair 7.0%, but the payout is only half covered by profit

Over the last 12 months, the company paid RUB 89 per share, giving a yield of 6.9% at the current price. Our model estimates the next payout also at RUB 89 per share, corresponding to a forward yield of 6.9% – slightly below the fair 7.0% for this name.

The payout ratio is 0.5 of profit, meaning the company distributes half of net profit as dividends. This is a moderate policy that leaves room for growth but does not promise shareholders extraordinary returns.

Valuation on the latest reported figures

Bottom line

Bottom line: MD Medical delivered a strong quarter – revenue grew 32.1%, EBITDA margin over 12 months is 30.5%, and debt load is minimal (0.06 EBITDA). However, operating cash flow barely exceeds EBITDA, and capex and dividends fully absorb it, causing debt to rise. For a holder, the key question is whether the company can sustain growth without increasing leverage and maintain the dividend of RUB 89 per share, which currently yields 6.9%. Valuation is close to historical norms, so re-rating potential is limited.