Poly Medicure – Dream Run

We had discussed about Poly Medicure and their plans to become a major global Medical Disposable player. The article highlighted about their expansion plans ahead and target to be a 300-400 Cr company by 2013. We had discussed the stock @ Rs 100 (adjusted 1:1 bonus) and the stock price has tripled to Rs 315 in just 10 months!!

So what does the stock hold for existing investors?

The company is expected to post a turnover of 170 Cr+ this year with an EPS of 18-20.

As the stock has given multi-bagger returns and valuations are not cheap anymore, one should do partial profit booking at these levels and explore our other ideas. For long term perspective, the stock still holds value as the company is a leader in the healthcare field where the potential is unlimited. Its not easy to find such good companies again. The company is on a growth path and has lined up several expansions.

We have been holding this stock for few years and had lot of faith on the future potential of the company and quality of management. Few important learning from this investment:

  • Look for companies whose end product has ever increasing demand. In the case of Poly, the medical disposable space has a great future.
  • Look at crucial ratios like – High Operating margins, consistent growth, High ROCE. Poly has had very good operating margins in the range of 18-20%, consistent growth of 25-30% and consistent ROCE of 25%+ hence the company has been able to scale up quickly majorly from internal accruals.
  • Look for young, dynamic and ambitious management.
  • Buying into a quality company at cheap valuations is a sure shot multi-bagger thing 😀

6 thoughts on “Poly Medicure – Dream Run”

  1. Hi Ayush,

    Do you have any idea whats happening with Teesta Agro, price rising, Huge increase in demand but no sellers.
    Btw I cannot understand why this is not a top pick of yours – given that it is on your radar and you recognise the potential. It is fundamentally better than many of the stocks that you discussed here.
    Isn’t this a quality company at cheap valuation?

    1. Hi,

      As Q2 nos are round the corner and many fertilizer cos have come out with fabulous nos…may be the expectations are same here.

      As the stock is highly illiquid and in Z group + there isn’t too much clarity on the quality of the business and its future prospects hence we think it won’t be a good idea to recommend Teesta on public forum like ours.


  2. Hi

    You have not posted Balaji Amines though it is there in the performance sheet. Or I am unable to find it for some reason. Can u please check.
    I am always interested in seeing your ideas and analysis, though I buy few of them due to small capital. I like to track how your ideas perform.


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