Poly Medicure (POLYMED)

FairStock Score: 62/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Strong balance sheet with Debt/Equity of only 0.08 and Altman Z-Score of 4.27
• High promoter holding of 62.42% aligns management with minority shareholders
• Piotroski F-Score of 7/9 indicates solid operational health
• Five-year revenue CAGR of 16.28% demonstrates a growing franchise
• ROCE of 20.08% shows good capital efficiency

Concerns

• Valuation is expensive: P/E of 36.11, EV/EBITDA of 28.46, and PEG of 7.98
• Free cash flow is negative at ₹954 Cr, questioning earnings quality
• Growth is slowing: sales growth 10.86% and profit growth 10.35% versus 16.28% five-year CAGR
• Margins of safety are deeply negative as price is over 3x the Graham Number of ₹469.21

AI Analysis

Looking at Poly Medicure, I see a business with some qualities Graham would respect: negligible debt at just 0.08 times equity, a promoter holding of 62.42%, and an Altman Z-Score of 4.27 indicating financial stability. ROCE of 20.08% is decent, though ROE of 12.57% is hardly mouth-watering. The five-year revenue CAGR of 16.28% shows it has compounded nicely, and the latest quarter with ₹494 Cr sales and ₹71 Cr profit suggests the operation is still moving forward. Piotroski score of 7 out of 9 also points to healthy fundamentals. But as value investors, we must remember price is what we pay, quality is what we get. At ₹1,488, the market cap is ₹12,732 Cr, and a P/E of 36.11 for a company growing profits at just 10.35% leaves no room for error. The EV/EBITDA of 28.46 is rich, and PEG of 7.98 screams overpayment. The Graham Number of ₹469.21 means the stock trades at more than three times a conservative valuation. Worse, free cash flow is deeply negative at ₹954 Cr despite reported profits. That is a red flag. This is a reasonable business, but not a reasonable investment at this price. The dividend yield of 0.28% gives me nothing while I wait. I would categorize it as a Stalwart with slowing growth, not a fast grower. In Buffett's terms, it is a wonderful business at a very wrong price. I need margin of safety; I do not see it here.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer