Hold Poly Medicure; target of Rs 1,940: ICICI Securities

ICICI Securities recommended hold rating on Poly Medicure with a target price of Rs 1,940 in its research report dated July 25, 2024.

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August 01, 2024 / 18:58 IST

hold

26 Aug, 2025 12:21

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ICICI Securitie's research report on Poly Medicure

Exports accounted for 70% of revenue. The segment grew a robust ~23% YoY led by EU markets (up 30% YoY). The company has received the approval for four products from the USFDA and another 8-10 products are awaiting approval. It is ramping up production capacity by adding new equipment to increase capacity for US market and has maintained its sales guidance of USD 15-20mn in the next 3-4 years. Exports may grow 22–25% in FY25E aided by new launches and traction in existing products.

Outlook

Poly Medicure’s (PolyMed) Q1FY25 performance was boosted by exports (~23% YoY) while domestic business growth (12% YoY) took a pause on high base. The company has commissioned four new plants that may double its device manufacturing capacity to 1.8bn units p.a by FY25 end. It is further raising INR 10bn via QIP to setup additional four plants over the next 2-3 years and may also evaluate inorganic opportunities. Growth in India business may bounce back in Q2FY25, and management expects 18-20% growth in this segment in FY25. It has added 40 sales representatives in Q1FY25 in India and will add 60 more in FY25. Management has maintained its revenue guidance of 22-24% and 100–200bps improvement in margin for FY25. We raise our FY25/26E EBITDA by 1–3%. The stock trades at an expensive valuation of 31.9x FY26E EV/EBITDA. We lower our rating to HOLD with higher TP of INR 1,940, based on 30x FY26E EV/EBITDA.

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