Poly Medicure Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Poly Medicure delivered a steady Q2 performance characterized by robust domestic growth and strategic inorganic expansion in Europe. While international markets faced headwinds from Chinese competition and regulatory shifts, the company successfully closed two acquisitions to bolster its Cardiology and Orthopedic portfolios. Management is pivoting away from low-margin government business to focus on private domestic markets and high-value exports, guiding for a significant revenue ramp-up in H2 FY26.

Highlights

  • Consolidated Revenue for Q2 reached ₹444 crores, up 5.7% YoY and 10.1% QoQ.

  • Operating EBITDA margin stood at 26.8% for Q2, maintaining the higher end of the 25-27% guidance range.

  • PAT for Q2 totaled ₹92 crores, a 4.5% increase from ₹88 crores in the previous year.

  • Domestic revenue grew strongly by 17-18% in H1, with private business up 22.3% in Q2.

  • Closed two major European acquisitions: Citieffe Group (Italy) and PendraCare Group (Netherlands), adding ~₹280 crores in annual revenue.

  • Revised full-year FY26 revenue growth guidance to 15-16%, down from an initial target of ~20%.

  • Liquidity remains strong with ₹1,109 crores in cash, reducing to ~₹800 crores post-acquisition payments.

  • Renal business H1 revenue grew ~30% YoY to ₹88 crores, despite GST-related inventory realignment.

Concerns

  • US FDA Regulatory Policy Shift

  • US Tariff Uncertainty

Key financials

2 periods

Headline

  • Revenue
    ₹444 Cr
    YoY +5.7% QoQ +10.1%
  • Operating EBITDA Margin
    26.8%
  • PAT
    ₹92 Cr
    YoY +4.5%
  • Gross Margin
    69.4%
    YoY +0.99%

H1

  • PAT
    ₹185 Cr
    YoY +14.5%

What they filed

Q1 FY27: revenue up 30.3%, net profit down 8.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue420 424 441 403 444 +6%494 +17%535 +21%525 +30%
EBITDA115 114 119 106 115 +0%111 −3%110 −8%125 +18%
Net profit87 85 92 93 92 +6%71 −16%65 −29%85 −9%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Domestic Business
    17% Revenue Growth (Q2)22.3% Private Business Growth-14% Govt Business Growth32% Revenue Contribution
  • International Business
    ₹300 Cr Revenue (Q2)9.1% QoQ Growth-9.6% Europe Growth (Q2)
  • Renal Business
    ₹44 Cr Revenue (Q2)₹88 Cr H1 Revenue30% H1 Growth

Guidance & targets

Revenue

  • H2 FY26 Revenue Revenue · H2 FY26 · High confidence ₹1,080 - ₹1,090 crores
    H2 guidance is between Rs. 1,080 and Rs. 1,090 crores. That is the guidance we are providing for H2, which is around more than 25% increase over H1.

    — Himanshu Baid, Managing Director

  • Full Year Revenue Growth Revenue · FY26 · Medium confidence 15-16%

    Previously 20% → 15-16%

    Overall, we aim to do a growth of close to 15-16% when we end the current Financial Year '26, which is lower than the guidance we provided in the initial part of the year around 20%.

    — Himanshu Baid, Managing Director

  • Renal Segment Annual Revenue Revenue · FY26 · Medium confidence ₹200 crores

    Previously ₹220 - ₹250 crores → ₹200 crores

    Our overall Renal guidance now is at about Rs. 200 crores from a full year perspective.

    — Rahul Gautam, President - Strategy

Margin

  • Operating EBITDA Margin Margin · FY26 · High confidence 25-27%
    we had given at the beginning of the year a guidance of between 25%-27%... we are maintaining our margin guidance of between 25%-27% and hoping that we will still remain at the higher end of the guidance.

    — Rahul Gautam, President - Strategy

Capex

  • Annual Capex Capex · FY26 · High confidence > ₹250 crores
    CAPEX of Rs. 150 crores was done in H1 and we further informed that CAPEX planned for the current financial year will be over Rs. 250 crores.

    — Himanshu Baid, Managing Director

Market Share

  • US Product Pipeline Market Share · next 3 years · Medium confidence $15-$20 million
    we still maintain that we have $15-$20 million product pipeline, $15-$20 million product pipeline for US... we still maintain that on a 3-year basis.

    — Himanshu Baid, Managing Director

Risks & concerns

  • US FDA Regulatory Policy Shift

    high

    US FDA's refusal to accept Indian lab data necessitates expensive and time-consuming retesting in US labs, delaying new product launches.

    Management acknowledged

  • US Tariff Uncertainty

    high

    Potential 50% tariffs in the US are described as 'completely untenable', causing customers to put new product orders on hold.

    Management acknowledged

  • Chinese Competition in Europe

    medium

    Chinese companies are dumping products in Europe due to high US tariffs, impacting Polymed's European growth (9.6% YoY degrowth in Q2).

    Management acknowledged

  • GST Transition Impact

    low

    Inventory realignment due to GST changes in September temporarily slowed Renal and domestic growth, expected to normalize in Q3.

    Both downplayed

Areas of evasion (2)

  • Specific revenue/volume delta from the 20 new European products.
  • Technical details of the double-blind vs single-arm stent trials (deferred to a separate response).

Q&A highlights

3 direct
Margin Dilution from Acquisitions Direct
These companies have been close to 15% EBITDA, both the companies... Only thing is, we have to just make improvements over the next quarter of the coming years, where we can increase margins to plus 20.

Confirms that the new acquisitions are currently margin-dilutive (15% vs Polymed's 26%+) but offers a clear turnaround plan through manufacturing synergies in India.

Asked by Amit Nigam, Invesco

US FDA Regulatory Hurdles Direct
US FDA has started disapproving Indian lab results... we have been forced to test all the products in the US right now. So all work we have done in the past was negated and we had to start again by retesting the product.

Reveals a significant systemic risk for Indian medtech exports to the US, explaining the delay in product approvals until mid-2026.

Asked by Vihang Subramanian, Zaaba Capital

Import Substitution in Cardiology and Critical Care Direct
In Cardiology... almost 80%-90% Cardiology angiographic catheters, balloons have been imported into the country... Critical Care also 90% import. That is where we are trying to bring an import substitution.

Highlights the massive domestic growth runway as Polymed localizes high-end medical devices currently dominated by imports.

Asked by Vishal Manchanda, Systematix Group

2 min read 5 chapters

Detailed narrative

Strategic Pivot to High-Value Segments

Polymed is aggressively shifting its focus toward Cardiology, Critical Care, and Orthopedics to drive higher margins and import substitution. In Cardiology, the company sold over 4,000 stents in H1 and is conducting a 2,000-patient clinical study for its RisoR stent to enter Tier-1 hospitals. Management noted that these segments are currently 80-90% import-dependent in India, providing a significant domestic growth runway as they localize manufacturing.

European Acquisitions to Drive Synergies

The acquisition of Citieffe (Italy) and PendraCare (Netherlands) adds approximately ₹280 crores to the annual topline. While these entities currently operate at ~15% EBITDA margins, Polymed plans to improve this to 20%+ by leveraging its low-cost Indian manufacturing base for components. These acquisitions also provide a critical distribution footprint in Europe, helping to mitigate the 9.6% YoY degrowth seen in the region during Q2.

Domestic Market Outperformance

The domestic business remains the primary growth engine, with private sector revenue surging 22.3% in Q2. Polymed is deliberately scaling back its government business (which degrew 14%) due to low-margin L1 tender pricing. The company is expanding its frontline presence by hiring over 100 sales associates in FY26 to capture rising local demand, guiding for 28-30% domestic growth for the full year.

Navigating US Regulatory and Tariff Headwinds

The US market expansion faces significant friction due to a 50% tariff environment and a recent US FDA policy change rejecting Indian lab results. This has forced Polymed to restart product testing in US-based labs, delaying new approvals until mid-2026. Despite these challenges, management maintains a 3-year target of $15-$20 million for the US product pipeline, banking on a new IV catheter design expected to launch in Q4.

Capacity Expansion and Future Outlook

Polymed is investing over ₹250 crores in capex this year, with major facilities in Mitral and Haridwar (Phase-II) expected to be operational within 12-18 months. The company is also moving its planned Jaipur facility to a 7-acre plot in YEIDA near the new Jewar airport. These investments are designed to support the target of returning to 20% organic growth in the coming years as new product pipelines in Europe and the US mature.

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