Poly Medicure – at an inflection point!

Poly Medicure Q2 FY25:

• Poly Medicure Limited is experiencing strong revenue growth, in line with the guidance given at the beginning of the year. Revenue grew by 23% in the first half of the year, driven by new plants that started functioning well and increased sales in India and abroad.
• Margins have also improved, with operating IBITA margins reaching almost 28% in Q2 FY25, compared to 25.82% in the same quarter last year. This is attributed to the new expansions, new product launches, and efforts in the domestic business.
• Exports constitute around 70% of the sales mix, with the domestic business accounting for the remaining 30%. The company aims to maintain a similar range throughout the year. Domestic business has shown significant growth of 22% in Q2, driven by increased focus and efforts in this segment.
• Europe is a key market for Poly Medicure, with a growth rate of 35% in export business. The company has good visibility in Europe, with long-term contracts spanning 3 to 5 years.
• The US business is expected to generate $2 to $3 million in revenue this year, the first full year with FDA approvals. Poly Medicure maintains its guidance of $15 to $20 million over the next 3 to 4 years.
• The renal business is performing well, with a growth of 40-45% in the first six months. The company expects 50% growth in the next six months as well, driven by the new PMJY scheme and increased government focus on dialysis treatment.
• Poly Medicure raised 1,000 crores in a QIP in the previous quarter, which will be used for new capital expenditures, corporate purposes, working capital requirements, and acquisitions. The company plans to set up three new facilities in Haryana, Rajasthan, and Uttarakhand by mid to end of 2026, focusing on renal dialysis, cardiology, and critical care.
• The company has already spent 150 crores on capital expenditures in the first six months of the year, primarily for automation in existing plants. For the full year, they plan to spend an additional 100 to 125 crores on expanding capacity in existing plants.
• Poly Medicure sees potential opportunities in the CDMO sector, particularly contract design manufacturing for large companies. This is due to changing US tariffs against Chinese products and increasing interest from European companies in India as a manufacturing option.
• The company aims to maintain its revenue growth guidance of 22% to 24% for the full year. They are also focusing on expanding their sales force, with plans to add 100+ sales associates in the current financial year, particularly in the critical care and cardiology verticals.
• Cardiology is expected to be a significant growth driver for Poly Medicure, with the company aiming for 300 to 400 crores in revenue by 2030. They are targeting the consumable side of interventional cardiology, which is largely import-driven in India.

Overall, the company is demonstrating strong financial performance with robust growth in both domestic and international markets. They are strategically investing in capacity expansion, new product development, and strengthening their presence in key therapeutic areas. The management appears confident in their ability to achieve their growth targets and navigate the evolving global landscape.