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 😀

Three cheers for Shilpa Medicare


Shilpa Medicare has made a new high at 345 today. We had initially discussed the stock on our blog here on 26th July, 2009 when the price was Rs 80. Hence the stock has given a gain of 331% in less than 1 year :). The stock is now a 10 bagger from March lows.

The stock has been witnessing a lot of fund action, Reliance Capital has bought 4.50 lac shares yesterday @ 285. Earlier ICICI Prudential had bought 9 lac shares.

The interest in the stock is logical due to the fantastic financial performance of the company and the bright prospects ahead. The Oncology business will remain to be the fastest growing segment for next 4-5 years and Shilpa is the largest standalone (not for captive use) Oncology API manufacturer in India. The company targets to be a 500 Cr turnover company in next 2 years.

Such successes are possible only due to active participation, discussion and feedback of our readers, investors and friends. Look forward to you support and views.


Excellent Q2 nos from Shilpa Medicare

Shilpa Medicare (reviewed on July 26) has posted fantastic Q2 nos. Few highlights are:

  • Approx 54.00% rise in standalone turnover YoY & 24.20% rise QoQ.
  • Approx 77.57% rise in standalone OPM YoY & 20.33% rise QoQ.
  • NP = 12.62 Cr resulting into an EPS of 5.74.
  • OPM very healthy around 31-32%.
  • The loss in the subsidiary has narrowed down substantially.
  • The interest cost has started reducing despite the company being in expansion mode.

I expect the company to continue posting such healthy nos and should better out in coming quarters. The stock has all the potential to move to the next orbit of Rs 250-300 levels.