Polymedicure –Q3FY23–Earning call Highlights–CNBC interview–24th Feb23 :
–Revenue growth was 24% YnY & Margin expanded in Q3FY23.
–Good growth in exports from Europe which is growing around 25% YnY.
–Domestic mkt growth is muted at 15% as last year the growth was due to lot of covid products , If we remove covid products the growth there is also 25% in that segment
–Overall a growth of 21% in 9M and we will see a similar growth & next year we will see aa growth of 20% from FY23.
–Margin improvement guidance –FY23 will continue to improve in margin in Q4 as well as RM prices have come down a lot because most RM was imported and had an petrochemical base so prices have dropped from a Peak of May/june22 to now the prices have dropped by 30/40% & similarly the freight cost has come down compared to last Year
& currency will have a better role as we have 70% export revenue so overall we will 100/200bps margin improvement going forward
– We are only in consumable Biz , so our consumables are used in oxygen therapy so that was a big last yr in India & outside due to covid but this Yr the demand has dropped off. Now the growth is from Infusion therapy and Renal segment right now.
–US Biz , we are waiting for US FDA approval and final filing will happen in week to 10 days & after that revenues to start from Q2FY24. We are still doing US biz at 1Mn$ but once we get FDA approval for some new categories of products we will see a huge ramp. & China+1 is helping as lot of co.s looking for Indian Mfers.
–The US FDA approval we are expecting in Infusion segment & US is a high margin geo & we will see higher margin from this product in US. Our Europe and US margins are similar & Africa and Asia margins are lower so that will help us improve margins when volumes grow and most of these products are patented devices so we will have better profitablity in these kind of products
–US contribution to current revenues –its currently over 1Mn$ & once we get the US FDA approval on these products we will do in 3 to 4 yr window we will see revenues going to 10/15 Mn$ as a rough estimate.
–China dumping of products in renal Biz –Most of these chinese cos are misusing the FTA & they are setting Psudo mfring facilities in Thailand or Malaysia 7 from there they are dumping products into India and getting duty waiver as those countries we dont have any customs duty on imported products. 2) Most of the co.s are selling products below the import prices in India so there is clear strategy is to eliminate Indian Mfring & that is where we are struggling.
–Also , there is very little GST on these products as when we make in India we pay 18% GST on mfring RM but finished product GST is only 5% so when Chinese bring the product to India , they have just 5% IGST and we pay almost 18% on our input and 5% on our Output so we have lot of inverted duty structure on the products.
–We have not Lost mkt share but the growth which we anticipated of 50/60% , we are probably getting only 40 to 50% range in FY23. So that has hampered the growth a bit & the product is also part of the PLI scheme so we are going back to govt and telling them about FTAs & inverted duty structure otherwise the Chinese will keep on dumping the products in Indian mkt
–Dialysis biz which we hoped to grow at 50/55% in FY24 will only grow at 30/35% due to This issue with Chinese Dumping.
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