Buy Poly Medicure with a target of Rs 172: Karvy

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Broking house, Karvy Stock Broking is bullish on Poly Medicure and has recommended buy rating on the stock with target of Rs 172.

Karvy Stock Broking report on Poly Medicure:

"Poly Medicure (Polymed) has secured an export order of Rs 85 million from Middle East for the supply of Medical Disposables. Middle East revenues are over and above the revenues that are estimated. Part of these revenues would be reflected in the current year and part would be reflected in the next year. The company's endeavor has been to increase presence in these markets; Polymed has embarked on a deeper market penetration strategy in exports market. We expect the company to continue its current trend of strong performance in the exports market on the back of several initiatives on the export front."

"We estimate Polymed's exports to grow by 40% growth YoY and clock   higher momentum from domestic segment due to increased demand   from corporate hospitals, clinics and private nursing homes. The   company's Safety products are expected to pan out by end of March   FY07 and will aid margins. Polymedicure is expected to see higher scale   up in volumes on back of commencement of an EOU at Faridabad   (operational by end of CY06), Hardiwar plant (commercialize from   March 2007), Safety Syringes and greater traction in other markets."  

"We maintain our positive outlook on the stock on back of CAGR revenue growth of 33.4% and profit growth of 41% from a two-year perspective. We increase our revenue estimates from Rs1139 million to Rs 1250 million for FY08 and increase our EPS by 7.5% to Rs25.2 and upgrade our price target by 7.5% to Rs 172 based on 6.8xFY08 (EPS Rs25.2). We rate the stock as a BUY."