Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Poly Medicure Ltd (BOM:531768, Financial) reported a revenue growth of 23% in H1, aligning with their annual guidance of 22% to 24%.
- The company achieved a significant improvement in operating EBITDA margins, reaching 28% in Q2 compared to 25.82% in the previous year.
- The domestic business saw a substantial growth of 22% in Q2, indicating successful efforts to focus on the domestic market.
- The export business, particularly in Europe, experienced robust growth of 35%, with key markets like the UK, France, and Germany performing well.
- The renal business showed impressive growth of 40% to 45% in the first six months, with expectations to maintain a 50% growth rate for the next six months.
Negative Points
- The company faced challenges due to geopolitical situations in Europe and the Middle East, leading to high freight costs and container shortages.
- There was some fluctuation in raw material prices, particularly those based on crude oil, impacting cost management.
- Despite the growth, the company is still in the initial investment phase for new divisions like cardiology and critical care, which are not yet contributing significantly to revenue.
- The company missed out on incentives from the first PLI scheme due to a one-year delay in the cycle.
- The working capital cycle remains extended, currently around 100 days, which could impact liquidity management.
Q & A Highlights
Q: What is driving the growth in Poly Medicure's exports, particularly in Europe, and what is the outlook for the US market?
A: Naresh Vijayvergiya, CFO, explained that Europe has long-term visibility with contracts spanning 3 to 5 years, and the region is expected to grow by 32-35% in the coming years. In the US, the company has received repeat orders and expects further FDA approvals early next year, projecting $2-3 million in revenue for the first year.
Q: Can you provide details on the expansion plans for new plants and the expected CapEx?
A: Naresh Vijayvergiya, CFO, stated that 500 Crores have been allocated for three new facilities, expected to be operational by mid to end of 2026. These facilities will leverage existing infrastructure to expand quickly with new products.
Q: What are the future investment plans for the cardiology and critical care divisions?
A: Naresh Vijayvergiya, CFO, mentioned that cardiology is a significant growth area, with plans to introduce locally manufactured products. The company aims for 300-400 Crores in revenue from cardiology by 2030.
Q: What is the current capacity utilization of the new plants, and what is the expected increase with the new CapEx?
A: Naresh Vijayvergiya, CFO, noted that the new plants are operating at about 50% capacity. The company plans to double its renal dialysis capacity in the next two years and expand in cardiology and critical care.
Q: How does Poly Medicure plan to utilize the 250 Crores from the QIP for acquisitions?
A: Naresh Vijayvergiya, CFO, explained that the company is looking at adjacent product areas in cardiology, oncology, and critical care, focusing on acquiring technology and regulatory clearances to fast-track projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
