Poly Medicure - at an inflection point!


(Ayush Mittal) #282

How much was invested in the new green field project at IMT Faridabad in Haryana? Can you give us some details of the facility and which new products are manufactured in the new facility?

Poly Medicure has spent Rs 60 crore on the new green field project, another Rs 50 to 60 crore will be spent on the capacity expansion, automation and new products to be launched. Polymed produces 100 different types of medical devices, the category ranges from infusion therapy, central venous catheter, blood management system, surgery and wound drainage, anaesthesia, urology, gastroenterology and dialysis. With 98 per cent products of the renal care imported, we will soon launch miniature portable artificial kidney dialyser, which will help in continuous blood cleansing. In many hospitals to save costs, the dialyser filter is reused in patients six or seven times, which exposes them to infections such as Hepatitis B and C. Only few patients are able to afford new dialyser as it costs Rs 2500 to Rs 3000. Most of these filters are imported and they remain a financial burden to the patients. A filter developed indigenous in India will help decrease the cost and more people will be able to afford it. The Poly Medicure dialysis product package will be ranging from Rs 500 to 550, which is Rs 800 in the market. Our idea is to make more products in the import substitution. Polymed has over 100 products and every year we try to bring in at least eight new products into the market.


(MHS) #283

Any news here Stock up 15% with very high volumes…


(MHS) #284


image


(Venkatesh) #285

4Q was particularly strong 18%% sales growth, higher margins and 42% PAT growth. FY18 EPS at Rs8. Stock at trailing 32x P/E

Disclosure: Invested


(Mridul) #286

In India, we have Romsons and Medikit as other dominant players in medical disposables industry. How can we get the revenue and profitability metrices for these two players? Any other serious competitors?


(kanvgarg123) #287

I was researching this company and asked my father about this. My father is in pharma business. He told me that in Kapurthala and Jalandhar side, Romsons is the market leader and he hadn’t heard much about Poly Medicure. As per him, market is growing at a good pace of 15-20% every year.


(MHS) #289

Probably this is the reason Stock reacted so much today…


([email protected]) #290

Romsons or Hindustan medical device product quality is sub standard but polymed product are of superior quality like BD (world top brand in medical disposable)


(Bharat) #291

Just found the company and gone through all the discussions to understand the business !
Definitely , the business looks great with immense possibility and scope.
The numbers too are great and consistent margins are impressive !
Read the link about Vadra Deal (Old news which was discussed here) and the integrity of Management.
Some Points that i have observed and found out !
In AR 2015-16 , the highest shareholding excluding promoters entities was with Allgeny Finlese (14.01%) which it sold entirely to Ezekiel Global Solutions as per AR 2016-17. Both these firms have a common director (Mr. Anuradha Bafna) , though not much details about any links between Promoter Company and these two entities .
The other entity whose name arose in land dealing was Sanchiya Enterprise which holds 3.49% Stake in 2016 but no stakes in 2017 as it transferred entire stakes to SCG and Co. Ltd. Interestingly both the Companies , Sanchiya and SCG have again a common Director (Mr. Manju Lata). More importantly , the Promoter Entity “Jai Polypan” has the same Email address “[email protected]” which is of Non Promoter Entity SCG.
Another 10% Non Promoter holding as per AR 2016 is with B.S Trade Pvt ltd which again sold almost entire Stakes to Zetta Matrix as per AR 2017, both having a Common Director Kulvansh Singh. Do Note , he is the same person who has signed deal of behalf of VCB Trading (which is a promoter group of Polymed). Another promoter of Zetta is Mr. Anuj Janardan who is also a director in Agrasen Service Pvt Ltd which again has similar id “[email protected]” and similar Address “Bais Godam” which is of Promoter entity Jay Polypan. Tried searching for this person “Nitin” but unable to find any details yet.
Though it can not be said as a fraud or illegal but there is a possibility that these companies may get insider details of the results and business.
I am very new to investing and can be wrong in my interpretations ! Seniors member can guide much better about these transfer of shares and common Email and address thing.
@ayushmit @Donald

Regards
Bharat


(kanvgarg123) #292

Went to a blood donation camp organised here at IIM Lucknow. Ram Manohar Lohia hospital also uses Poly Medicare blood collection bag. I asked the people who were collecting blood that since when they are using it and they said from quite a while now.
Has anyone observed the use in other hospitals?


(integraldx) #293

Interesting. It looks to me like these shareholders who are classified as ‘public’ are actually promoter entities. So the actual promoter share holding may be close to 50%


(Umang Shah) #294

This is a wonderfully curated thread. Some points from my end -

  1. Transactions with Vitromed

Vitromed is a partnership firm with all the Polymed promoters as partners. This firm is also in the business of making medical devices and is the contract manufacturer of polymed. Almost 55% of vitromed’s revenues come from polymed. These revenues flow as job work charges in polymed’s books and are as follows –

image

It could be a case of the value moving out of the company or it could not. However, the listed company has stable margins since last 10 years and the returns are above cost of capital. Company has earmarked 75 crores and 90 crores of job work for vitromed in 2019 and 2020.

What is quite surprising about vitromed is that non polymed revenues are all exports and are in the biotech segment. They are currently making losses in non polymed business since its newly started. This could as per me, be a red flag since a new venture was not started in the listed company (vitromed website also lists renal care and anaesthesia products that polymed would be starting now). Despite the losses, Vitromed’s RoCE is 15%, which indicates that poly med business is quite profitable for vitromed.

Also, as per the ICRA report of vitromed (attached) “The firm has stable working-capital intensity, primarily due to comfortable receivable terms with Polymed”


https://www.icra.in/Rationale/…/69239~Vitromed%20Healthcare-R-06042018.pdf

  1. Patent Victories

Their patent victories over B. Braun are possibly one of the strongest points with respect to their business. However, till now they have won in India and Germany and lost in Aus and Spain, and in even in India, they prevailed since there was a procedural error in B Braun (also some foul play, no doubt since the patent officer was suspended).

However, their India sales have been declining over last 2 years, reasons for which I could not locate. Based on the competitor’s list and the tender from AIIMS, Jodhpur, the industry is fairly consolidated with few players working with top institutions (since bulk of their India business is tender based). Also, in the blood bags segment, the largest player in Asia is an Indian MNC called Terumo Penpol. Surprisingly, all the companies manufacturing blood bags in India use licenced technology from NRDC – (https://www.nrdcindia.com/english/index.php/success-stories/78-disposable-blood-bag-system). So was wondering how strong their IP is in their IV business.

So although the overall financials of the company are very good, their newer forays would (which would bring the incremental revenue) would be difficult to figure out.


(Yogansh) #295

Hi All,

Sharing my notes from AGM 2018.

Regards,
Yogansh Jeswani
Disclosure: Tracking
Please Note: These are my personal running notes of the AGM and can possibly have error in listening, writing or interpreting while preparing these, please do your own due-diligence.