Poly Medicure - at an inflection point!

Can any of the seniors please enquire from the management about the reason for higher other expenses? Forex or expenses related to Jaipur SEZ facility?

The increase is mainly due to forex loss.

Hello Ayush,

In Sept-2013 Q&A, Management quoted –
“Last few years we walked with heads low as we struggled to come out of the forex derivative contracts issues. We managed to successfully put that phase behind us by focusing on things within our control - bringing in process improvements and cost-efficiencies wherever possible, plugging leakages and cutting wastage. Consequently as you would have noticed, our margins are much higher.”

Is the company doing same mistake, and not so distant-past-issue is back to haunt its NP and sotck price ??

Can any of the seniors please enquire from the management about the reason for higher other expenses? Forex or expenses related to Jaipur SEZ facility?

Hi Nabendu,

Earlier the co had got trapped in derivative instruments like options, swaps…and the losses were quite big. The loss in the recent qtr is more due to the hedging thing…and seems to be normal.

Regards,

Ayush

Hello Ayush,

The increase is mainly due to forex loss.

There is a big volume of around 40,000 shares on Feb 5. After that I could see more activity on the counter. In the past, something like this happened before a big price rise -Ex: Jan/Feb 10 andSep/Oct 12.

Am I reading it correctly?

Hi…

Are new valuepickr’s chasing the stock :slight_smile: Or any big guys making an entry ?

Wonder whats cooking here. Though, the delivery percentage is very low (some days as low as 10%)

@ _Ashwini Damani_

If i rememer correctly same querywas raised apporx 1.5 years back when Ajanta pharma rallyed verry hard.

But after all today Stock is 3X

I had the misfortune of being in a German hospital for many weeks in a multi-speciality pediatric hospital. In all the general wards, ICU, and also from previous observations in dispensaries (where they do routine blood tests) I found that IV catheters/cannulae, syringes, etc. are exclusively of B. Braun. I don’t see this changing anytime soon.

Hi Chintan,

Hope everything is fine now.

Yes, B Braun has a huge leadership and global market share. They are huge in size and this is what offers an opportunity to Polymed as they have been able to offer similar quality product at a much much cheaper cost…there is substantial cost saving and this is the reason why the co has been doing so well and growing consistently.

Over last few years, Polymed has been able to develop the safety IV Cannula which was the patented product of B Braun and has a global monopoly.

Regards,

Ayush

Yes Ayush, Everything is fine now.

Agree that the market is huge. The 2012 sales of B. Braun were around Rs. 40,000 cr. (they also manufacture some drugs); 130 times the TTM sales of Polymedicure. Their R&D expenditure itself was 5 times Polymedicure’s sales! What’s more, the market seems to be growing at around 10%. My post was just to reiterate as was clarified earlier that the patent victory in Germany should be seen as a moral booster more than anything else (scuttlebutt if you may). But this is a small market, the main market is in the US. Even capturing a large fraction of the Indian market would be wonderful.

http://www.bbraun.com/cps/rde/xchg/bbraun-com/hs.xsl/facts-and-figures.html

Want to thank you and all active valuepickrs on behalf of all the passive participants like myself who benefit immensely. The learning curve is very steep since joining valuepickr.

Regards,

Chintan.

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Some consensus estimate tells me 22.43, it doesn’t look inline with the quarterly progress. I am sure others tracking Poly would have a much better figure.

Agree 22.43 seems high basis quarterly performance. My estimates are between 19.8-19.9 on sales of 320-330 cr.

Are we missing something that’s expected in the last FY quarter?

22.43 was FY15 estimate, tried to reply to a previous post of @Prasanna

My comment was that it looks less for FY15 considering the quarter on quarter progress.

New to the forum and just started looking at Polymed. The Q&A etc suggests that it is a good company. The -ve is primarily a forex issue which the mgmt admits is a cock-up and is not strictly business potential related. FY13 AR page 70/89 suggests that fx loans are getting repaid by FY16, hopefully fx losses will also taper off by then. Overall I like the industry and clearly Polymed appears well placed in it. Off the top of my head I think FY14 EPS should be 16.7, FY15:23 and FY16: 30.

Yes, this is what a real Moat is - Despite offering substantial cost saving, there will be lot of reluctance to switch over from B Braun. The same can apply for Polymed as it attains size :slight_smile:

Perhaps, they need to start focussing on some of branding/promotional activities to make their name stick with hospitals and doctors.

I think the management made it quite clear in their Q&A that they there is big market globally for Safety IV devices. Their tone also suggested that they are not 100% sure of their mechanism being accepted in all the nations and hence they specified nation-wise situation about the results of patent challenge.

The lost case in Spain doesn’t surprise me. The management didn’t seem very confident of getting approvals in all the nations. I don’t think there is much to worry about. An opportunity of having a slice in the cake size of $300-350 mn isn’t bad even if the slice is very small.

Atleast the case was filed because they had developed a new process for Safety IV devices. So I see it as they have some share in a market where they had no chance of having any share due to patent of B Braun. Should go well in the future keeping in mind the need of medical facilities in India.

Any update on Jaipur’s SEZ completion which was due in March 14?

Polymed results were supposed to be out today. I checked BSE website but couldnt find them. Anyone has any info?

Check NSE. It is there.