Shares of Poly Medicure Ltd. declined nearly 7% on Friday, February 6, reacting to its third quarter earnings results. According to reports from CNBC TV18, the stock is among the top losers on the Nifty 500 index, reflecting investor concerns over the company's financial performance during the December quarter. The broader market context shows mixed performance, with the BSE Sensex climbing 266 points to 83,580 and the Nifty adding 51 points to settle at 25,694, while the Nifty Midcap Index slipped 14 points to 59,503, indicating concentrated gains in large-cap stocks.
The company's revenue growth remained steady during the December quarter, with revenue increasing by 16.4% to ₹493.66 crore from ₹424.2 crore in the previous year. However, profitability metrics showed significant deterioration, with profit declining 16.9% to ₹70.81 crore from ₹85.2 crore in the year-ago period. As reported by CNBC TV18, the company's earnings before interest, tax, depreciation and amortisation declined 2.8% to ₹111.2 crore from ₹114.4 crore in the previous year. The market's advance-decline ratio of 2:3 suggests that declining stocks outnumbered advancing ones, with the Nifty 50's P/E ratio hovering around 22.2, approaching levels considered overvalued by some metrics.
The most significant concern for investors was the margin contraction to 23% from 27% in the year-ago period, indicating operational efficiency challenges. According to the earnings report, this margin compression despite steady revenue growth suggests increased cost pressures or pricing challenges in the company's business segments. The divergence between large-cap strength and mid-cap weakness reflects broader market dynamics, with midcap indices exhibiting even higher P/E ratios of 28-33, indicating premium valuations for smaller companies.
The company's domestic business showed resilience with revenue increasing 16.2% to ₹146.6 crore from the previous year and up 4% sequentially. Meanwhile, the international business demonstrated strong growth, increasing 16.1% from the previous year and 14.1% from the previous quarter to ₹342.8 crore. Within the international segment, revenue from the European Union increased 25.7% to ₹129.1 crore, while revenue from rest of the world increased 9.5% annually to ₹165 crore.
According to the earnings data reported by CNBC TV18, infusion therapy witnessed a 5% increase from the previous year to ₹274.3 crore, while renal therapy saw a 15.1% increase annually to ₹44.8 crore. The company maintained a strong cash position with ₹839.8 crore on books, providing financial flexibility despite the operational challenges. The sectoral rotation pattern shows FMCG stocks as the day's strongest performers, marking session highs, while the IT sector continued its losing streak, marking its third consecutive session of decline amid FPI selling and soft demand.