Poly Medicure profit falls 29% as costs and depreciation erode margins
Revenue rose 21% YoY, but operating margin fell 6.45 percentage points and other income contributed 22.85% of pre-tax profit.
Filed 25 May 2026, 15:22 IST · Poly Medicure Ltd (POLYMED)
Key takeaways
- Consolidated revenue grew +21.25% YoY, but operating margin narrowed by 6.45 percentage points as expenses grew +31.97%.
- Consolidated net profit fell -29.17% YoY, despite a 1.57 percentage-point decline in the tax rate, as interest rose +195.39% and depreciation rose +81.79%.
- The stock fell -17.32% over five sessions, far below its 1.66% median absolute move after the last eight results.
Price around the results
Revenue growth did not translate into profit growth
Consolidated revenue rose +21.25% YoY and +8.27% QoQ, but operating profit fell -7.58% YoY and was down -0.70% QoQ. The result was a -29.17% YoY decline in net profit and a -26.68% decline in EPS. Profit before tax also fell -30.63% YoY, reflecting higher operating and below-operating costs.
Costs, depreciation and interest drove the margin squeeze
Expenses grew +31.97% YoY against revenue growth of +21.25%, narrowing operating margin by 6.45 percentage points; sequentially, expenses also grew faster than revenue and reduced margin by 1.87 percentage points. Interest rose +195.39% YoY and depreciation rose +81.79%, adding pressure below operating profit. Other income fell -26.75% YoY, while still accounting for 22.85% of pre-tax profit, so earnings quality was partly dependent on non-operating income. The lower tax rate, down 1.57 percentage points YoY and 3.78 percentage points QoQ, softened the decline in net profit.
Operating margin has declined for four straight quarters
Operating margin has fallen from 27.10% in Q4FY25 to 26.32% in Q1FY26, 25.84% in Q2FY26, 22.52% in Q3FY26 and 20.65% in Q4FY26. Poly Medicure's margin was 2.73 percentage points below the 23.38% median for 48 healthcare peers that had reported the quarter. Management said Q4 EBITDA was affected by the consolidation of FY26 acquisitions and one-time regulatory and employee-cost provisions at a subsidiary.
Management points to expansion alongside higher investment
Management said FY26 standalone EBITDA margin was close to the higher end of its 25%-27% guidance range. The company said it plans two new Indian manufacturing plants, expects R&D expense to double from 1.7% of sales over the next 3-5 years, and plans to launch 25-30 products a year over the next 3-4 years. It also reported FY26 capex of Rs 296 cr, 35 products launched, and the acquisition of Brazil-based Medyneo.
The market reaction was weaker than Poly Medicure's usual post-result move
The stock fell -3.19% on the results day and -17.32% over five sessions, with relative performance of -16.33% against the market over five sessions. That compares with five down moves and three up moves across the last eight result reactions, and a median absolute move of 1.66%. The five-session decline was therefore substantially larger than the stock's typical post-result reaction.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹535 cr | ₹494 cr | +8.27% | +21.25% |
| Other income | ₹19 cr | ₹21 cr | -7.90% | -26.75% |
| Expenses | ₹424 cr | ₹382 cr | +10.89% | +31.97% |
| Operating profit | ₹110 cr | ₹111 cr | -0.70% | -7.58% |
| Operating margin (%) | 20.65% | 22.52% | — | — |
| Interest | ₹6 cr | ₹6 cr | +7.55% | +195.39% |
| Depreciation | ₹38 cr | ₹29 cr | +32.93% | +81.79% |
| Profit before tax | ₹85 cr | ₹98 cr | -12.69% | -30.63% |
| Tax | ₹20 cr | ₹27 cr | -24.70% | -34.95% |
| Net profit | ₹65 cr | ₹71 cr | -8.15% | -29.17% |
| EPS (₹) | ₹6.54 | ₹7.00 | -6.57% | -26.68% |
Operating margin of 20.65% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.19% | -4.51% |
| Next session | -9.91% | — |
| 5 sessions | -17.32% | -16.33% |
| 15 sessions | -5.09% | — |
| 30 sessions | +1.01% | — |
Volume on the results session was 1.16× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Cumulative stent deployments surpassed approximately 11,000 units as of 30 April 2026.
- The company achieved sales of 450 dialysis machines during FY26, reaching an installed base of approximately 1,000.
Guidance & outlook
- Standalone EBITDA margin guidance for FY26 was 25%-27%.
- R&D expense is expected to double over the next 3-5 years.
- The company plans to launch 25-30 new products per year over the next 3-4 years.
Expansion
- The company plans to scale manufacturing in India through two new plants.
- FY26 capex spend was Rs. 296 crore.
- The company acquired Brazil-based medical device company Medyneo.
- The company plans to hire more than 100 sales associates across India in FY27.
New products
- Commercial sales of DEB were initiated with positive clinician feedback.
- The company launched 35 products in FY26.
New initiatives
- The company is implementing automation and lean practices to reduce costs and sustain value-based pricing.
- PACE Academy has trained more than 400 nurses from 52 hospitals, with 4-5 new academies planned.
- The company signed a solar power purchase agreement and is increasing solar power capacity.
Problems & risks
- Q4 EBITDA was affected by consolidation of FY26 acquisitions.
- Q4 EBITDA was affected by one-time regulatory and employee cost provisions at a subsidiary.
- The company cites government pressure to reduce healthcare spending as a market factor.
What to watch
- Whether operating margin stabilises above 20.65% after four consecutive quarterly declines.
- Whether other income's 22.85% share of pre-tax profit decreases.
- Whether interest growth moderates from +195.39% YoY as acquisition-related costs are absorbed.