Poly Medicure Q1 FY27 earnings call

Poly Medicure Limited reported a robust Q1 FY27. Standalone revenue reached INR431 crores, marking a 12.3% YoY growth, with domestic business growing 16.2% and international 10%. Consolidated revenue stood at INR525 crores, a significant 30.3% YoY increase, including INR72.3 crores from acquisitions. Standalone operating EBITDA was INR120.8 crores, up 18.8% YoY, achieving a strong margin of 28%, which is above the guided range. Consolidated operating EBITDA was INR126.7 crores, with a margin of 24.1%, within the 23-25% guided range.

The company has initiated 'PolyMed 3.0', dubbed 'Ascent', with an ambitious goal to double its revenue by FY30. This strategy focuses on organic and inorganic expansion, leveraging technology for high-complexity verticals, and deepening direct customer access, especially in international markets. Management believes this growth will be exponential, driven by high-technology, high-margin segments. The balance sheet remains strong with INR855 crores in cash, providing liquidity for strategic initiatives.

Infusion Therapy, a core business, grew 11.1% to INR259.2 crores, primarily driven by domestic growth and higher value-added products. New high-technology segments like Cardiology (growing from INR2.9 crores to INR28.6 crores) and Orthopedics (INR49.2 crores) are contributing meaningfully. Europe showed strong recovery, growing 43.8% to INR187.3 crores, with 17.6% organic growth. However, the Renal business degrew by 3.8% to INR43.2 crores due to pricing pressure from Chinese imports.

Poly Medicure plans to spend INR200-225 crores in capex for FY27. This includes new facilities in Faridabad/Palwal for orthopedics, transfusion, and infusion capacity, and expanding the cardio business from the Noida facility. The Faridabad/Palwal facility is expected online by March '27, and Noida by Q1 FY28. The company maintains strong liquidity with INR855 crores in cash. Standalone debt is limited to INR250 crores in revolving credit, while the acquired Citieffe has a EUR 9 million loan, with EUR 1.5-2 million repaid annually.

For FY27, consolidated revenue is guided at INR2,300-2,400 crores, and standalone revenue at INR1,900-2,000 crores. Standalone EBITDA margin is expected to be 25-27%, and consolidated EBITDA margin 23-25%. Management anticipates overall business growth of 15-20% by year-end. Standalone gross margin is expected to normalize^📎 to 67-69%, while consolidated gross margin is projected at 71-72% due to the higher margin profile of acquired businesses. The company has almost 25 new products in the pipeline for CE marking, expected in the next 3-4 months.

The Middle East region experienced a 32% de-growth due to ongoing West Asia crisis and severe logistics/infrastructure bottlenecks, preventing product shipments despite intact customer demand. Supply chain disruption^🌐s, including difficulty in finding containers and ships not calling Middle East ports, persist. Geopolitical risks, particularly regarding the U.S. and Middle East, remain a concern, alongside logistic cost increases (2-3x in 6 months). The company hopes for an improvement in the Middle East situation to resume normal operations.

Poly Medicure is actively developing new medical devices and has received INR3.3 crores in government aid for clinical studies of critical devices, many of which are import substitutes. The company emphasizes the importance of regulatory pathways, as new products and market entries, especially for Class III devices, require 2-3 years for registration and clinical trials. Integration of acquired businesses like PendraCare and Citieffe is progressing well, but cross-selling synergies and manufacturing shifts to India are also subject to regulatory approvals, expected to materialize from next financial year.