Target: 1,068
CMP: ₹984.55
Poly Medicure Ltd. (Polymed) is a leading player in the organized medical disposable devices market with strong brand positioning due to high quality products used in infusion therapy, blood management, surgery, dialysis, and other segments. Company is the largest exporter of medical devices from India.
Polymed is among the top three IV Cannula manufacturers in the world and the first indigenous dialyzer manufacturer. Seventy per cent of the sales are from exports to the highly regulated developed markets like EU, LatAm, South East Asia etc.
Key raw materials include plastic granules, PVC sheets, boxes, medical paper and film. So, any large fluctuations in crude and related prices could impact its gross margin. Tailwinds from new capacity additions and additional cost curtailment efforts through automation will drive incremental growth from FY24.
Company is looking at expansion opportunities both organically and inorganically in India and abroad. Polymed’s return ratios got impacted in FY22 on the back of higher cash and equivalents on back of QIP fund raising and flattish earnings growth impacted due to cost inflation.
With improving profitability and asset turnover, we expect return ratios to expand over FY22-25