Poly Medicure Limited — Q3 FY25 earnings call

Call held 3 Feb 2025

Management summary

Poly Medicure delivered a robust Q3 FY25 performance characterized by strong double-digit revenue growth and margin expansion. The company is successfully diversifying its portfolio into high-margin segments like cardiology and oncology while maintaining leadership in infusion therapy. With a massive cash reserve from its QIP, the company is embarking on a significant CAPEX cycle to build three new plants, aiming to sustain a 'new normal' growth rate of 20% plus.

Highlights

  • Consolidated revenue grew 24.9% YoY to ₹424 crores in Q3 FY25.

  • Operating EBITDA increased to ₹116 crores from ₹91 crores, with a 65 bps margin improvement.

  • PAT rose to ₹85 crores, up from ₹65 crores in the previous year's quarter.

  • Renal segment showed exceptional growth of 56% in the first nine months of FY25.

  • Company received CDSCO license for Drug-Eluting Stents (DES), marking entry into high-value cardiology implants.

  • Net cash position stands at ₹1,074 crores, including ₹900 crores from the recent QIP.

  • Domestic business recovered strongly with 23.8% growth in Q3 after a slow start to the year.

  • Management reiterated revenue growth guidance of 22% to 24% for the full year.

Concerns

  • Product Quality and Liability

Key financials

  1. Revenue ₹424 Cr +24.9%YoY
  2. EBITDA ₹116 Cr +27.5%YoY
  3. PAT ₹85 Cr +30.8%YoY
  4. ROCE 23.9%
  5. EBITDA Margin 27.4%

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

SegmentRevenue Contribution9M Growth
Infusion Therapy70%25%
Renal9%56%

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY25 · High confidence 22-24%

    From 22-24% today

    So, as you remember, recall in the earlier part of the year, we had given a guidance of close to 22% to 24%. See, we are very close on that guidance, and we are very much within the range.

    — Himanshu Baid, Managing Director

Margin

  • EBITDA Margin Improvement Margin · FY25 · High confidence 100-150 bps
    And we have guided in the initial part of the year for EBITDA improvement of 100 to 150 bps.

    — Himanshu Baid, Managing Director

Volume

  • Dialysis Machine Installations Volume · FY25 · Medium confidence 350+

    Previously 500 → 350+

    No, we will not be able to do 500 installations this year. This year we will be able to do between 300 and 350 installations. I don't have a real figure, but it should be around 350 plus.

    — Himanshu Baid, Managing Director

Capex

  • New Plant Investment Capex · next 18-20 months · High confidence ₹400-500 crores
    We have just started building those plants hopefully ready in 18 to 20 months and that is where we will be spending close to Rs. 400 to Rs. 500 crores.

    — Himanshu Baid, Managing Director

Market Share

  • Renal Market Share Market Share · by 2030 · Medium confidence 20-25%
    But our target is to maybe reach let's say, by 2030 around 20% to 25% of the market share.

    — Himanshu Baid, Managing Director

Risks & concerns

  • Product Quality and Liability

    high

    MD stated that the only thing that can go wrong is making a 'bad quality product,' though they have had zero claims in 28 years.

    Management acknowledged

  • US Import Tariffs

    medium

    Potential tariffs on Chinese and Mexican exports could lead to dumping in other markets or increased costs in the US.

    Analyst downplayed

  • Raw Material Price Volatility

    low

    Management noted no current inflation but admitted it could change depending on global conditions.

    Management acknowledged

Areas of evasion (1)

  • Business-wise specific gross margins (cited as confidential).

Q&A highlights

3 direct
Dialysis Machine Installation Targets Direct
No, we will not be able to do 500 installations this year... it should be around 350 plus. And then next year maybe we will double the installations.

Management admitted to missing the initial 500-unit target for the year, providing a more realistic outlook for the renal equipment business.

Asked by Rashmi, Dolat Capital

Impact of US Tariffs Direct
I think it's very clear these are essential products, right? And it will be very difficult overnight to, the US hospitals cannot run out of products... It is not, it's an optional thing.

Management downplayed the risk of US tariffs on medical consumables, emphasizing their essential nature and the difficulty of replacing them quickly.

Asked by Tanmay Gandhi, Investec

Long-term Growth and Margin Sustainability Direct
So, now we see that the new normal for this Company should be 20% plus growth... every year we could increase the margin by 50-100 bps easily in the next 4-5 years.

Management explicitly raised the long-term growth floor to 20% and committed to consistent annual margin expansion through operational efficiency.

Asked by Bharat Shah, ASK Investment Managers

2 min read 5 chapters

Detailed narrative

Renal Segment Becomes a Major Growth Engine

The Renal business has emerged as a standout performer, growing at 56% in the first nine months of FY25. Management expects this trajectory to continue as they replace imported products in India, where they are currently the only local producer of certain renal consumables. The company is targeting a 20-25% market share by 2030, supported by increased government reimbursement rates for dialysis under the National Dialysis Program.

Strategic Entry into High-Value Cardiology

Poly Medicure has received the CDSCO license for Drug-Eluting Stents (DES) and plans to commercialize the product immediately. Unlike competitors who import components, Polymed will manufacture the stent and the balloon in-house, which management believes will provide a significant cost and maneuverability advantage. This move into Class 3 implantable devices represents a shift toward higher-priced, longer-dwelling medical products.

Massive CAPEX Cycle Funded by Internal Accruals

The company invested ₹222 crores in CAPEX during the first nine months of FY25, primarily through internal accruals. A new large-scale plant in Palwal, Haryana, is under construction and expected to be commissioned by mid-2026. Total planned spending for three new plants is estimated at ₹400-500 crores over the next 18-20 months, which will be funded using the ₹1,000 crore QIP proceeds.

Domestic Recovery and Export Resilience

After a slow first quarter, the domestic business rebounded with 23.8% growth in Q3, bringing the 9M growth to 16.7%. Management is confident of exceeding 20% domestic growth for the full year. Exports remain the dominant revenue contributor at approximately 70%, with Europe showing strong 30% growth in the nine-month period, driven by leadership in the infusion therapy category.

Margin Expansion Through Operational Leverage

Management has guided for a 100-150 bps improvement in EBITDA margins for FY25, having already achieved a 95 bps improvement in the first nine months. They believe a 50-100 bps annual margin expansion is sustainable over the next 4-5 years. This will be driven by operational efficiencies as new sales teams (64 people added in 9M) reach full productivity and high-margin new verticals like oncology and cardiology scale up.

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