Poly Medicure - at an inflection point!


(anil) #101

Not sure how much of impact will this event do…seniors tracking this co. from earlier levels may comment.

http://www.telegraphindia.com/pressrelease/prnw/enuk201308050365_public.html


(Mallikarjun) #102

Thanku Anil for being vigilant… Seniors please chip in…Impact on sales and future course of action for Poly medicure ?


(Hitesh Patel) #103

thanks anil for the link…

this tiff with b braun is an ongoing saga…

Once the company starts ramping up in US, it could make it really big.

hitesh.


(Shankarnarayan K) #104

Hi Mallikarjun,

What is your opinion on the Vadra land deal poly had entered into ? If someone in opposition parties tries to blow up this issue or say tomorrow BJP somehow comes into power and makes a noise of it , how could this affect the stock?

BR,

Shankar.


(Mallikarjun) #105

Hi Shankar

The co was not directly involved. However the vadra deal will cast a shadow on promoter group always. Considering the business they are in have decided to be invested.The stock is technically too strong. Hence going with the market.

( There are unwritten rules in politics where ruling party and opposition party usually don’t target family members…Vadra issue would have not surfaced if Arvind kejriwal was like others. I don’t think BJP coming to power will affect Vadra and in turn Polymedicure. But we can’t say anything ).


(Gyan Roy) #106

I would see Vadra link as a positive rather than negative. In India, you need some kind of political backing to grow. Among all the major parties, there is an unwritten rule not to touch the businesses associated with politicians. There could be some media hype to gain political mileage, but no one will harm the other persons business interest. I don’t remember any business getting harmed because of regime change. Even in Tamil Nadu, Sun TV continues to grow after Jayalalitha coming to power.


(Mallikarjun) #107

Vadra issue -

http://www.business-standard.com/article/current-affairs/vadra-firm-made-false-statements-in-balance-sheet-khemka-113081000272_1.html


(Donald Francis) #108

We were very fortunate to be able to meet MD Poly Medicure this time. Strategically things are clearer now, for us. Will take some time to capture back the Q&A.

No new surprises here. Company will continue to grow at 20-25% - that’s a No-Brainer. Company is focusing strongly on growing OEM relationships as the key to opening up developed markets.

When that breakthrough happens, Poly Medicure will scale to the next level. While they had been winning all cases against B Braun they have suffered a couple of setbacks in some countries. So there is some RISK there, but so is the scale of the opportunity. Investors must balance that. Wadhra land issue is a non-starter …safe to ignore.


(anil) #109

Hi Donald/Seniors,

I was just seeing the deliverable % of Polymed and am bit surprised. Since April this year the delivery % and absolute delivery qty has been very low. The % has hardy crossed 40% and mostly has been around 20% mark. I dont think its a good sign, given that the stock is still a small/micro cap and such low delivery % is not common in such cases.

I do understand that Polymed is a very good story backed by financials but just wanted to get senior ppl view on the issue I mentioned above.

Currently Polymed forms less than 1% of my portfolio, plan to add more.

Thanks


(anil) #110

Hi all,

Not sure if the video is shared here before.

thanks


(Donald Francis) #111

Thanks Anil for the video. We had a chance to do a quick round of the facilities last time and were impressed by the increased level of sophisticated Automation being introduced.

Re: Delivery % - leave it to the experts to comment.


(Mallikarjun) #112

Thanku Anil for the video… Quite impressed after watching it.


(Donald Francis) #113

Poly Medicure Management Q&A, Sep 2013 updated.

If we think through clearly this is one of those high-quality businesses with a **low-cost durable competitive advantage. **Justwho can dislodge this guys…?

With most things under control, shackles of the past thrown-off, they are eager and confident to keep executing.

For anyone with a long term investment horizon, this is a very good business to cling on to and sit tight!

Disc: My views may be biased. I hold significant positions and have recently added a lot @240 levels. Will be looking to buy more on dips:) in line with the overall market


(Donald Francis) #114

For those looking at Poly Medicure for the first time or giving it the first good look, you are well-advised to read all the 3 Management Q&As so far.

I have found reading them together again, gives me a much better feel for the business and the Management.


(Hitesh Patel) #115

thanks donald for the updates.

Polymedicure has a definite niche in the segment it is in… All the regulatory approvals add to the competitive advantage…

With the forex problems behind it, the company now looks set to grow well.


(Mallikarjun) #116

Thanku paaji…
Heartening to hear the following from Management Q&A

1.We will have to grow cautiously, step by step - our pockets are not deep. ( Ayush had somewhere mentioned the management is careful ).

2). We had engaged E&Y for improving on our processes.

3). 10 years from now, we will be selling Products/Knowledge/Patents. We will be much higher in the value chain.

Are they playing cards close to the chest regarding US Markets ? Without revealing too much ?

disclosure - Invested. Views are biased.


(Donald Francis) #117

I found another statement very encouraging.

We will grow 20-25% on an Organic basis for next 5 years. This is hinting at things to come while stating the baseline at 20-25% growth.

The US Market Plans did suffer a setback. The OEM which was negotiating a guaranteed-offtake kind of negotaiated contract is reportedly taken over by another company:(. The new owners are not keen on the deal as per some reports.

OEM deals will happen sooner than later.


(JatinK) #118

Hi Donald & others who are following this closely-

At 540 crs mcap & last year PAT of 24 crs, this is selling at 22 PE trailing.

It is growing consistently at 20% & expected to grow at 20% in the future also. So that gives a PEG of about 1.

That looks unattractive in comparison to our other favorites- PI, Ajanta, Kaveri, Cera, Astral, Atul etc.

So why Poly Medicure??


(anil) #119

Hi Jatin,

Last year (and possibly even the year before that) the company was incurring FX loss of 3cr. per qtr. And as per management Q&A all the FX contracts have expired and so this 3cr would directly add to the bottomline. So assuming taxes and all the adjusted trailing PE would be close to 15-16. Am sure seniors here can provide more reasons to add/buy poly med.

Hope this helps.

Also, one question to seniors from my side - given low liquidity in stock, can we expect this to improve gradually going fwd.? or this would remain more or less same.

thanks


(Mallikarjun) #120

So why Poly Medicure??

Hi Jatin here are few

1). Quality of Business they are in

2). Sustainability

3). Difficult for competition to catch up

4). Size of addressable market

5). Clean balance sheet & Prudent Management

Hi Anil

Since most of the shares are held by promoter and other entities, doubt liquidity will improve… Only 16.03 % are with individual shareholders…

If the company raises fresh capital through equity or the other existing entities dilute their holdings, i guess liquidity may improve…

( Most of the times wealth is created in illiquid counters… But investing in those has its own risks )