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Harsh Rajuka
A CFA level 2 aspirant with over 3 years of equity investment experience, coupled with a p... A CFA level 2 aspirant with over 3 years of equity investment experience, coupled with a practical knowledge of business handling and marketing. Read more
Summary
Polymatech Electronics, Indias first opto-semiconductor chip manufacturer, is emerging as a major player amid global supply chain shifts. With explosive financial growth, strong industry tailwinds, and IPO plans underway, it presents a promising opportunity in the unlisted space with some risk & rewards.
When Donald Trump took office as the 47th President of the United States on January 20, 2025, it stirred up global markets in a big way. Inflation picked up, trade wars escalated, and stock markets, including India’s, started feeling the heat. With tensions between the U.S. and China rising, many global companies are rethinking their manufacturing strategies—and India is emerging as a clear winner. As one of the fastest-growing economies and a rising manufacturing hub, India is perfectly positioned to benefit from this shift. And tucked within this bigger story is a company that’s quietly catching attention: Polymatech Electronics.
Polymatech Electronics, founded in 2007 as a subsidiary of Japan’s Polymatech Company Ltd, was acquired in 2018 by Mr. Eswara Rao Nandam and Ms. Uma Nandam. It is India’s first opto-semiconductor chip manufacturer, leveraging advanced European and Japanese technologies.
Opto-semiconductors are electronic components that convert electrical energy into light or vice versa. These are vital in applications such as:
TV screens
Mobile displays
Indicator lights
Pulse oximeters
The Indian opto-semiconductor market has seen strong momentum, according to a reports by the Times of India:-
Indian opto semiconductor market has grown with 12% CAGR from 2018 to 2022
Projected to reach Rs. 444 billion by 2028, growing at 15% CAGR
India’s global market share expected to rise from 5% to 9% by 2028
- Polymatech stands to benefit directly from this growth, with:
41% of business from LEDs
24% from image sensors
22% from Opto couplers
4% from Laser Diode
Polymatech’s financials are nothing short of impressive:
Revenue: Rs. 45 Cr (FY21) → Rs. 1,221 Cr (FY24), CAGR: 200%
EBITDA: Rs. 11 Cr → Rs. 320 Cr, Average Margin: 29%
Net Profit: Rs. 7 Cr → Rs. 240 Cr, Average Margin: 24%
EPS: Rs. 0.18 → Rs. 6.03, CAGR: 222%
These numbers point to an extremely fast-growing and profitable company.
Current Ratio: 1.51x
ROE: 30%
ROCE: 32%
Debt-to-Equity: 1.04 (reasonable for capital-intensive industries)
Inventory Turnover: Decreased YoY, indicating preparation for larger orders
Polymatech appears undervalued:
Valuation metrics like PE, PB, and PS are lower than industry averages
ROE (30%) and ROCE (32%) outperform peers' averages of 9.2% and 17.8%, respectively
In valuation front, Polymatech’s unlisted shares are trading at Rs. 54/share (as of April, 2025), at its 52-week low of Rs. 54, with a PE ratio of 9x at sharscart.com which is platform designed for facilitating buying & selling of unlisted shares.
Based on historical trends & Industry growth Polymatech’s forecast for FY28 includes:
Revenue ~Rs. 3,600 Cr
EBITDA ~ Rs. 1,050 Cr
Net Profit ~ Rs. 870 Cr
The company filed for an IPO in 2023 but faced rejection due to undisclosed shareholding by its merchant bankers. Now, Polymatech is in talks with KPMG and Bank of Baroda to lead its IPO after consolidating global operations.
It plans to invest $100 Million in 2 phases of $20 million & $80 million in Bahrain to ensure uninterrupted power and gas supply for semiconductor production, further boosting future prospects.
Polymatech enjoys a first-mover advantage in a capital-intensive, high-barrier industry. Key positives include:
Strong R&D capabilities
Client base including Fortune 100 companies
Robust financials
Government incentives for the semiconductor sector
Export order book worth Rs. 7,000 Cr
With global supply chains shifting, India’s role in semiconductor manufacturing is only set to grow—and Polymatech could be a major beneficiary, However the risk & reward of this business needes to be studied as well before taking an investment call.
Stiff wondering? Watch our deatiled video anlysis on youtube to get more clarity
This article is for informational purposes only. Please conduct your own research before investing.
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