Poly Medicure Limited (POLYMED) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Polymedic Unlimited Q4F526 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on touchtone phone. Today on this call, we have with us from the senior management team of the company, represented by Mr. Himan Shubed, the managing director, Mr. Naresh Vijay-Vergia, CFO, Mr. Rahul Gautam, President, Strategy and Corporate Development. I would now like to hand the conference over to Mr. Himan Shubed. Thank you, and over to you, sir.

Thank you very much. Good evening, everyone. I welcome you all to our Q4 and full-year FY26 earnings call. I sincerely thank you all for being here today. You know, last financial year, FY2526 was a year of deliberate transition, you know, a fundamental upgrade from our business model towards high technology, high complexity, high growth segments. A year in which we chose to invest in a difficult external environment, then waited out. We invested in high technology verticals, built out clinical and R&D teams, and despite general headwinds, we delivered every commitment we made to you on quarter three call. So Polymed is currently under strategic transition where we intend to become a globally recognized brand in high-end medical devices over the next five years. FY26 was just an initiation in that journey, and FY27 will concentrate initiatives that we have undertaken, drive synergies across the group, and continue investments in higher and high-end technology segments. Let me share how we intend to leverage Pentraker and CTP over the next two years. The companies we acquired last year, and integration work is in fully underway. On the cost side, the procurement and manufacturing processes are sourcing, registered savings, so we are working on those areas aggressively. On the revenue side, we'll be cross-selling both directions. India will review these products. We are waiting for registrations to come through. It takes between six to nine months to get import registrations. And we have also started leveraging Polymer's distribution network globally for this product, and I think as time progresses, we'll see a lot of work happening there. Internationally, we are using our global presence to widen the reach in newer markets, and that's already happening as we speak. On the R&D front, our teams are collaborating for new products. We are already working on a lot of new devices. The R&D team there in Europe and in India is working simultaneously to fast-track a lot of projects which were stuck earlier. So a lot of work happening there. All these initiatives will already be undertaken, and I expect that post-recovery and all the necessary regulatory approvals will start to reflect in the performance of FY27. Before the numbers, I would like to update on your expansion of a global footprint in a new geography with an acquisition of Medinio in Brazil, a medical device company in Brazil. Brazil is being the largest medical device market in South America, close to around $13 to $15 billion is a gateway to the Latam region. Medinio comes with N-Visa and import licenses. We've passed our entry to the market where approvals actually take years together. Brazil is a very important market for our parliament with a strong grand recall, and this is a step in this direction, ensuring long-term success of our business in that region. So we're in the process of hiring people there, building a team, clinical team, sales team, directly in their market. And as we had, you know, opened our own subsidiary volume in Brazil last year, I think this is in continuation of that strategy that now we have a fully operating company with all the licenses needed to start, you know, going directly in that market. Each of these initiatives is already in motion. In one or two years, we'll make these three businesses into a single global platform for growth. So we're already working in that direction. Some key business updates, we've launched close to 35 new products across the group in FY26. Of course, that also includes some products which came through acquisition. On a standalone basis, we added around 20 products last year. On the Reno platform, we have placed around 450 ISIS machines last year, taking our installed capacity to approximately 1,000 machines. On cardiology, now we have deployed close to around 11,000 stands. Clinical registries are over now, 650 patients, and I think by the end of the year, we'll complete the entire enrollment of 2,000 patient pools in India and outside India. U.S. business is picking up momentum with the conversation on multiple projects with customers, again, you know, getting active. I think due to the, you know, scenario which was created last year, especially because of tariffs, I think we had a setback, but now I think we are on track, and I think we're also getting some new products that have been approved for my pipeline right now. So I think pretty positive about the U.S. development, and I think we've taken a one-year setback on this business, I think now we're back on track, and I think a lot of new opportunities are coming up from the U.S. after the change in scenario. Let me share the financial performance. Let me start with standalone performance. On a full year basis, the standalone revenue was around $1,662 crores, which was up by around 4% compared to previous years. Last year was a tough year for us, especially on the export front. The low growth in standard revenue was due to tough external environment, and again, mainly impacted from international revenue. Gross margin expanded by around 128, and it was up to around 68% from last year's 66.8% or something like that. And on the profitability, we had guided standalone EBITDA in the range of 25 to 27%. We had delivered close to 26.8% at the higher end of the range, and standalone EBITDA was 446 crores. Standard revenue for the quarter floor was 443 crores. Up 5.2% year-on-year, 6% sequentially, it was highest, it was standalone quarter, with Q4 gross profit of around 295 crores, EBITDA of 121 crores, with a healthy margin of 27.3%. So, as you can see, there's been a constant improvement. So, when we started the year, we were at around, you know, 180 crores for a quarter revenue. Standard-alone, now we have moved to almost close to 443 crores. So, is it steady increase, every sequential you have been increasing at this time on business? Now, in the consolidated picture, full year consolidated revenue grew by 12.3% to 1875 crores. Domestic business were around 20%. International was about 9%. Year on year, of course, that includes, you know, addition from our acquisitions at the growth level. And, of course, these were not full year revenues. These were one acquisition happened in September, one in November. So, in FY27, we'll see a full impact of the revenue. On the Q3 call, if you recall, I commented that H2 will be about 20% above H1, and we have exactly delivered that, so the growth has been from 847 crores to 1049 crores, an increment of around 21%. Q4 Consolid revenue was 534 crores, up strong around 21% year-on-year, with a gross profit of 356 crores and 66.7% margin. The growth in the quarter was broadly based on domestic growth of around 25%, international business around 19%. And Q4 Consolid EBITDA was 112 crores. A little lower than the standard number because there was an impact on consolidation of lower margin acquisitions and about 9 crore one-time regulatory and cost provisions and one of our international subsidiaries. Other important points to highlight is shift in our revenue mix in Q4-26. Infusion therapy now accounts for 50% of the revenue, down from 57% in Q4-25, with renal around 11%, steadily rising share coming from cardiology, critical care, and other acquisitions. In other words, our new higher technology segments are now contributing to over 50% of our revenue, and I expect this proportion to keep on improving in coming years. And that is also one of the reasons that the gross margin has started looking upwards. On the balance sheet, liquidity remains strong in consolidated cash of around 842 crores. This amount is a strategic reserve for our strategic initiatives in the future, and we intend to use operating cash flows to meet regular KPIs requirements across the group. For FY26, the Capex was around 2.96 crores. We can do our plants in Raizwar, Faizabad, Mithral, and also in Yaira Medical Park. Current year, I'll share the numbers slightly later. Let me give you the forward-looking guidance. Again, you know, there has been, of course, a huge shift in the external environment. We have seen the current disruption caused by, you know, Gulf War, and I think the situation is quite challenging. But let me tell you that we are managing every piece, you know, and, you know, working on a lot of initiatives inside the organization. I think West Asia, I just want to call it out, has around 6 to 8 percent of our revenue comes from there. And though the demand seems to be quite intact, we don't see any drop in demand. I think it's a logistic nightmare right now, and I think there's a lot of bottlenecks. We are causing some disruption in shipping products out of India, but I think from the demand side, I think it's pretty much intact, and we have pending orders which we need to execute, but we are still waiting for supply chain and shipping routes to improve and, you know, have better pricing. There has been an impact on raw materials and plastic packaging materials. All across, because most of them are crude linked, you know, and we see there was impact of around 20% on aggregate basis in raw materials and a meaningful advent to the gross margin. But just let me tell you one thing that your company was... Well, maintaining adequate stocks, almost inventory of close to two and a half to three months. And because of that, we didn't see too much of an impact, you know, in quarter one. So far, we've been able to minimize it, and we are taking more steps to minimize this risk. And I think the crude prices, the current business plan we have looked at has been made on crude levels of around $100 and I think $100 to $110. But I think in times to come, crude prices will definitely soften up. So I think this headwind will kind of go down a little bit. But let me tell you that, you know, the freight costs, the minimum wage revisions in Haryana has caused some disruption, but we are able to get a price increase from customers between range of 3 to 5 percent already. And also, you know, currency which has moved, rupee is currently depreciated against all major currencies, and companies, 60-70% business is international, export-driven, on a standalone basis. So, there, we are able to, you know, recover some costs back overall. On the current situation, based on where we are today, as on today, we may see some erosion on gross margin going from, let's say, 68% to maybe around 66% or maybe in that region, maybe lower by 200-300 pips, but this is just a present estimation, and I think if the cruise prices soften up, let's say, in next, let's say, a few months, I think then this impact can also be minimized, but also to minimize this risk. We are already working on a lot of cost-saving projects, looking at alternate supply sources, a lot of raw materials which we are importing, we are trying to buy from indigenous sources, a lot of parts and components which are coming from the third countries, we are also trying to make them in-house. We are working a lot, you know, we are also seeing some saving through our dharma plant, which we have, you know, established this year is now fully operational. So a lot of, you know, saving, you know, optimization projects are already happening inside the organization. So hopefully by the end of the year, we may see this impact to be very, very negligible, not even this 200, 300, but I just want to, you know. You know, based on the current situation, I think we see today where we are, but going forward, it may further reduce. I think that's what we are looking at. I just want to give you a revenue guidance for FI27. On a console basis, we are guiding a revenue of 2,300 to 2,400 crores. Up from 1,875 crores, we have done an FI26, which will include a full-year consolidation of PENVAC and GTS. On a standalone basis, we are guiding on a revenue of 1,900 crores to 1,950 crores, with domestic business growing upwards of 20% and international business growing upwards of 15%. So this is our guidance for the full year of FY27, standalone 1,900 to 1,950, and on console basis between 2,300 to 2,400. A standalone EBITDA margin is expected to be, again, we are giving a guidance of 25 to 27 percent range. Of course, this year, last year, FY26 was the same range we have given. We should be able to almost cover the same thing. On a consolidated basis, EBITDA margin, because our subsidies operate at a lower EBITDA margin right now, and we are on the phase of, you know, doing a lot of cost-saving projects there. We expect this year consolidated EBITDA to be between 23% and 25%, but standalone will be between 25% and 25%. We expect, you know, to spend between 200 to 225 crores on CAPEX this year. This is the guidance. This is lower than last year. You know, last year was 296. This year, as most of these projects are getting ready, the plants are getting operational, so the KPEX requirement will be a little lower. But, of course, we are pushing more on automation right now, so that at least we can mitigate some wage revisions, which has happened in a higher wage salary course. In summary, I think we have delivered every Q3 commitment we made, H2, 20% of H1, standard EBITDA, and the higher end of the range, around 450 machine placements done in the year. So, almost 35 new products launched in FY26. I think we have a clear domestic import substitution strategy, an international strategy accelerating in U.S., Europe, and with a prudent entry into Brazil. I can genuinely tell you that business is now adequately positioned for growth ahead. As you can see, already the plan is to move from 1875 to 2300 to 2400 crores. It's a substantial growth we are planning this year. So, again, I want to assure all of you that we are on the right track. We have been able to preserve margins. We are able to preserve growth in the organization. And in spite of all the headwinds and challenging situations, we are still guiding, you know, highs. Because today, you know, the demand is coming back, what we had lost earlier in the last year. And also Indian market, I think we can see our presence now in most of the corporate chains, Larger hospitals, and even stand-alone hospitals, and I think that business is also bound to grow, you know, in a higher percentage level. So, thank you again for your trust and time. I'll now hand over to the operator, and we'll be happy to take your question. Thanks again.

Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

First question is from the line of Siddharth

Nirandi from CWC. Please go ahead.

Hi. Hi, Mr. Behz. Thank you for the opportunity. Three questions from my end. If you could give us some details on the Brazil acquisition in terms of the, you know, categories the target operates in, what is the revenue, and what's the acquisition cost like that you've paid? And on the current acquisitions that were made, GTS and Pentacare, is it fair to assume that most of their sales, which you highlighted broadly about 65 crores this quarter, are in EU itself? Or is there a EU and ROW sort of split there? If you could give us that and, you know, accordingly to understand what the organic performance on EU and ROW is. And, you know, on your guidance of 15 to 17 percent standalone growth, could you give us a sense of how would that pan out domestically versus for exports? And for the core infusion therapy versus the new therapies. Yeah.

Okay, so let me take the Brazilian acquisition, and I'll, you know, request Imanchu to comment on the other questions. So the Brazilian acquisition is a small acquisition. It's a company which was registered last year as a medical devices storage and distribution company. The company does not have currently any operations. And as Imanchu mentioned during the opening remarks, the rationale for acquisition for this was to leapfrog the regulatory timelines that are required to get the importation license and the Envision license for us to be able to take the medical devices distribution business in Brazil. From an acquisition standpoint, it was about $40,000, so it's a small acquisition from a cash outlay perspective, but it clearly saves us anywhere between 18 to 24 months to be able to operationalize the business. Quarty.

And on the other two companies, yes, you know, PenraCare and CTFV have almost 50% sales in Europe and 50% in the rest of the world. CTFV has also business in North America, in U.S. and Mexico, which is around 35-40% of the business right now, and 50% is in Europe. PenraCare has majority business in Europe and some business in Middle East and Latin America. And on the Indian business, on the standard-owned business, basically we are saying domestic business will grow around 20%. That's what I've guided again. And international business will grow, you know, around 15% or so. So we're anticipating standard-owned business, you know, to grow to around 1,900 to 1,950 crores from a current base of around 1,662 crores.

Got it. Just to follow up on that, given how that's panned out, in terms of the headwinds that you saw this year in Europe, how do you see the situation on ground now, and when do you expect, at what point in time in FI27 or whenever, do you expect this to normalize?

I think I would say that, you know, we have bounced back in Europe. That's what I can tell you right now. We have added, you know, quite a few customers in Europe. And also the existing customers, you know, where we had an over-inventory situation and, you know, a little slowdown, you know, in demand. I think that has come back. And currently, last three, four months, we are seeing a good uptick, and I think the pipeline is also very, very strong in Europe. So I think overall, we are very positive about the current business in Europe, what we are doing from Parliament's channel-owned basis.

Thank you so much. Thanks a lot. I'll get back in.

Thank you. The next question is from the line of Samit Ashar from Abbott Capital. Please go ahead.

Yeah, hi. Hi, sir. Thanks for the opportunity. So, I just wanted to know what kind of growth you are projecting in your NL segment because in the Q3 you had mentioned you are facing some competition from some domestic players as well as some Chinese players.

He is important. Not domestic. Domestic there is nobody. Except Bollywood, there is nobody in the market today. Domestic-wise.

Okay, so what kind of growth are you projecting for in FY23 in the Reynolds segment?

20% growth in the Reynolds segment again. So we will not say maybe around earlier we were targeting 30-35% growth, but I think these Chinese headwinds continue to kind of disrupt the market. So we are still seeing maybe... 20% growth or maybe over 20% growth this year also in this business. We have initiated certain, you know, actions against, you know, Chinese companies. I can't tell you because that's confidential. But we are working with the government of India to help us through this because many Chinese companies have set up, you know, bases in ASEAN countries where we have a zero import duty on medical products from ASEAN countries. So that is hurting the current environment. So we are working with the government to arrest that point, and I think hopefully we will see some action. But in spite of all that, you know, maybe it happens, doesn't happen. I think we are still targeting a growth of over 20 percent.

Got it. And also in the European market, are you back, projecting around 15 or 15?

Yeah, we are back, and I think we have added some distributors in Northern Europe, we have added some distributors in UK and also in Germany, so I think all that is helping out.

Are the Chinese still dumping there? Is that situation resolving?

We stand in jumping in every industry. I think that is the problem across the industry, not in any. But because Qualymad, see, we have a lot of products which are very specific. There are certain patents, protections. So I think we are not impacted. See, the demand is not getting, see, demand which was impacted due to, you know, supply chain. You know, last time, you know, I mentioned very specifically that, you know, there was, let's say, you know, maybe an oversupply because of the route opening from, you know, Red Sea and also, you know, which continues moving around Africa to Europe. So, that was a mismatch there, but now everything is smooth, so I think now we are seeing a better demand coming from Europe, actually.

Got it, sir. And also, if I look at your inventory, how much of that would be under goods in transit, if you could give some bifurcation, because I'm sure some of that must have been because of the logistical issue. So, how much do you expect to bill it in the first quarter?

Inventory in transit? No, are you talking about export inventory?

The overall inventory. So if I look at your balance sheet, your inventories have increased from 285 crores to over 30 odd crores. So is there any sum of inventory which is yet to be built? Is it a console number or you are looking at the standard? Console number.

So obviously got an impact of the acquisitions as well. If you look at the standalone balance sheet, that increases about 30 odd crores.

And the standalone is only 30 crores addition. On inventory. And basically, the SGS for finished good inventory as on 31st March was around 30-35 crores. So, there's not too much of, you know, we don't keep so much of SGS and basically five, six days inventory basically at the end of the year. So, it's very, you know, tightly managed. And of course, it was in a raw material level. So, that's the reason those first two, three months, we're not able to, you know, feel that heavy impact of, you know, raw material price increase. So, that's where you see that. Thank you.

Good answer. Thank you. I'll come back in the queue for more questions. Thank you.

Thank you. The next question is from the line of Koneksh Gupta from SS Family Office. Please go ahead.

Yes, sir. Hello. A very good evening to you. Sir, my question would be that if the business is currently for F526 grown at low double digits despite the real confidence of mid-teens growth, what specific levels give management confidence that the company can re-accelerate growth over the next three to five years?

See, I think we have to see that last year was more or less, for us, also a lot of transition here. Because there was a lot of focus on, you know, high technology, building new technology products. And over a period of time, you know, Polymed was very steady on the... So, you know, we are transitioning from low technology to medium to high technology, and that's a huge transition we are committing. And as I mentioned on my call initially, so next five years, That's where the direction is, whether we focus more on orthopedics, on cardiology, neonatology, on oncology. So these are, you know, four or five key areas, you know, renal care. These are four or five areas we are going to focus more and more in future. And that helps us to even get a better gross margin in the business. And also, what we have seen over the last one year, that wherever we had some lower revenue, we are trying to fix that. The U.S. was a big, I think, for us, I would say a red flag because of the current situation, which was in the U.S. on tariff situation. So that delayed our launch to the U.S. market quite a lot. So all that is coming back. India is coming back because, see, you have to see from two perspectives. First of all, Indian currency which is devaluating is going to help us more in exports, for sure. So that's a big advantage. Secondly, see, medical device industry is 70% import-driven in India, 60-70%. So whatever companies they were importing products in India were getting expensive for them. Being a local manufacturer, import substitution, you know, bringing import substitution products, that, you know, makes the product more comparable to hospitals. And also the whole scenario is changing in India. The hospital sector, which was, you know, let's say 50% cash driven, 50% insurance driven, now things are changing. I think there is now 60-65% insurance and balance is cash. So that also is pushing them more towards domestically manufactured products. So all these are, you know, tailwinds which are going to help us to, you know, grow our business. And plus we are going direct to markets. We talked about US a little bit earlier, we talked about Brazil, and then going a little bit more direct in Europe with our subsidiaries. So all that will happen next coming year. It will help us to grow faster and increase our presence in modern markets.

Sir, broadly at present, is it really safe to say that the worst is really behind us?

I can say that absolutely for the moment, yes, but we don't know what is happening tomorrow morning. That is my worry. And I'm sure it's everybody's worry. What happens tomorrow morning, nobody knows. But I think if we see a steady state, even at current crude level prices, I think we are in a good shape.

And, sir, realistically, what would be the sustainable organic growth rate of the business over the next five years, excluding acquisitions?

If you see even on the guidance we have given this year, even when we say 2,400 revenue guidance for this year, console level, we are already talking over 25% growth rate, over 25% growth rate. So, it's already, you know, we are pushing the pedal again. So, this is very clear. Even on standalone basis, when we say 1900 to 1950, you know, crores revenue from 1662, we are already grinding over 15 to 16 percent revenue increase. And I think gradually, Standard 1 will further increase as we launch more products in different segments we are working on as a lot of new launches are happening. So, I'm sure some of you have visited facilities already know what we are doing.

Got it, sir. Got it. And the final question would be that over the years, what do you think has contributed most to customers' stickiness in your business, especially in export markets where customers have multiple sourcing options?

Yeah. So I think there are two important points here. Most of our customer relationships outside of India have been for the last 15, 20 years. And we have hardly lost any large customer in the last 15, 20 years. That's number one. And the stickiness is created because of two, three reasons. One, because of quality, which we deliver, because today Polymed has almost every quality standard, our products comply to every possible global quality standard. Number two, In terms of performance, our products are performing at par with multinational products in the global market. Number three, the innovation we are able to do. Today, the company has over, you know, at a group level, we have around close to 399 patents. So we are able to innovate products at a much frugal cost compared to any other company and then put those products in the market. So that gives us a stickiness in the business. All these factors contribute to that stickiness.

And, sir, in the long run, what kind of revenue mix do you want to achieve in terms of Indian and international business?

So, it's a great question. So, ideally, I would, you know, like it to be between like one-third India and two-third ROW.

Okay, sir, really, really appreciate the answer. Thank you very much.

Thank you.

Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, we would request you to please limit your question to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Neen Mehta from Equator Securities. Please go ahead.

Yeah, hi, sir. Thank you for the opportunity. A couple of questions from my side. Sir, first, for the quarterly perspective, you are a subsidiary, you are one who stands at roughly, very much around 92%. Can you please give the broad-based viperation of what kind of revenues will be from the Pantra get, project bottom, and what kind of revenues from the CTP, and what will be the YY percentage growth rate of these two? That's my fourth question.

Yeah, so Raul can answer that question.

Yeah, so Neil, the total revenue of 65 crores that you've done from the two acquisitions, about 43-44 crores is from CDF, and the balance is from PenderCamp. And what would be that YOY growth rate of debt? Up to your numbers, I will check on that and come back to you.

Okay. And, sir, if I see from the standard on labor life, since you mentioned that 30 growths only increase in inventory, just because if you see the F1 to 6, our growth rate is close to around 4-5 percent. That's why probably it doesn't look so. But if we see from the perspective of the days, inventory days, it has increased from 50 to 58 days. How we are coming to reduce that? And apart from inventory days, if you see the receivable state, which has increased drastically from, like say, due to 40 crores to 440 crores. Like, in terms of days, it's 68 days to 86 days. So, like, can you just help me, you know, can you throw some guide on that? How do we see that?

So, Neil, I think on the inventory side, we are not too concerned. In fact, it's currently helping us only because large part of our inventory is in raw materials, right? So, which is helping us cushion some of the price impact that we're seeing. So, you know, a 30 crore increase for a business of our size is probably not worrisome. On the data side, you know, I think obviously there has been a significant jump on the data side, and that's primarily because of the external factors, right? Because, you know, as you mentioned, the international environment was quite troublesome, and we had to support our customers in terms of better terms. For them to drive growth, right? So I think that's been the primary reason. The bulk of the increase on the debtors have happened because of the international business. The domestic business receivable cycle continues to remain quite strong, and we don't see any challenge. I think as the international environment becomes more malleable, I think the data cycles will come back, but in the interim for us, ensuring our customer retention and ensuring growth, you know, we are there when the growth comes back. We are willing to extend the help to the customers. I think at the moment, looking at the environment, I would expect, you know, the civil cycles to be similar for FI27.

Oh, okay. Thanks, sir. If we see from the export revenue from the first strategy of OOPF, I understand that we have roughly clocked almost around 360 to grow. If I now remove the CTP and Pintra here, or let's say remove the subsidiary revenues out of that, which is 90 euro kind of numbers, then the core export growth looks slightly, slightly flattish or a slight decline in that. So, how, like, what we are doing to then, for that, you know, we can command the growth going forward from the Xcode market good, X of Pentraderyl Institute.

I think two things, you're right. The export, in fact, were negative, not slattish. Also, we were, I think, minus 3 or 4 percent on the export side. But, again, what we are trying to do is, as I said earlier, U.S., again, you know, the doors are open, and we see some new products getting added this year for export to U.S. market. We are in that process, so that will add something. In Europe, we have added more distributors, so I think that is, you know, helping us to regain that growth in the European market. And in certain markets, we will go direct as we have opened a substitute in Brazil. We are going direct there, so that will also open some doors there. So I think all in all, I think, and then our focus has been more on the clinical side. So we have added a lot of people on the clinical team. So now we are doing a lot of global clinical trainings, and we have increased our hospital visits internationally. So, our team has been visiting globally all across, you know, from, you know, almost every country in Europe to, you know, in Middle East or, of course, or in Southeast Asia. All these markets, we are putting a lot of clinical support, which is helping us to, you know, mitigate, you know, earlier challenges. So, and then this upset is actually helping us to move into more products into the hospitals.

Perfect, sir. And just last two questions from my side. Sir, I think we have done really good in terms of renal studies. I just wanted to know that what kind of, would you like to put a number like how much dialysis machines that we have sold for FY26 and how we see that number coming up in FY27? That's my first question. And last question is that, so can you just help me with the with the modeling of mind track and CTB for the product? Thank you for watching. Thank you.

I think on the renal side, very quickly, I said, we sold 450 machines last year, and this year also, as I said, renal business, we grew close to around 20%, so we'll see maybe a sequentially 20% increase in the sales of machines also this year. That's the current plan. And I think on CCC and PenderCare, maybe we'll ask Rahul to very quickly chip in. Neil, can you just repeat your question on this, please?

Yeah, yeah. So, sir, I just wanted to know what kind of EBITDA margin that we have clocked for Pangerica and CPP individually for this quarter.

Yeah, so I think this quarter, the EBITDA margin, the acquisition has had a negative impact on EBITDA of about 2.6 crores. You know, there are two, three reasons for it. Number one, you know, quarter one tends to be, or quarter one of their calendaria tends to be a lower quarter because of shorter working period. Plus, for PenderCare, they had fairly large exposure to Middle East compared to what the overall group level is, which has gotten impacted a bit more. And for CityF, they had a sort of a product mix issue in terms of selling certain low-margin products because of which EBITDA margins were lower. I think on a steady-state basis, when things become normal, we think both the business... Can operate at, you know, mid-teens in terms of EBITDA margin, and obviously with the benefit of synergies that we will drive over the course of next few years, we expect that number to go up to 20%, but quarter four or quarter one of their calendar year was a lower EBITDA margin for them.

Okay. Thank you so much. That was very helpful.

Thank you.

Thank you. The next question is from the line of A. Sriram Palani Pappan from i.PMS. Please go ahead.

Thanks for the opportunity. So, in intrafascular lithotripsy and regulating world, for these new products, is the complete product development done in-house? And have the products been commercialized? And can we also know the utilization rate of the capacities that were expanded after QIP-1?

Yeah, so after the QIP-1, I'll answer the last question first. So we are seeing a capacity would lie here close to around 65 to 70 percent right now. And on the product which I developed, it's fully developed in-house. So a lot of products are in pipeline right now, which we'll announce in due course. We will already launch the floating balloons. Again, fully indigenous developed product. It's a 100% import substitute product. And very, very few companies are able to make that kind of product, and we are working on some high-level products, which will be around 1 lakh or 7, 8 lakh, 10 lakh of these products, you know, in times to come. So there are a lot of development, you know, projects going on in cardiology space, in orthopedic space, also in oncology, and also some new products are getting launched in real space also.

Great to know, sir. And, sir, in a previous con-call, you mentioned there's a good opportunity to replace the multinationals in the event segment. We usually enter a market where there's no domestic player as an input substitution. But, sir, hello. Yeah, go ahead. Yeah, but we have a couple of large domestic players along with other large investors. So, how are we planning to increase our market share in this competitive segment?

So, again, the focus is not in selling stents. You know, we are not focusing on, stent is a very small part of our business, maybe 10-12 crores out of 1,800 crores. So, I think that is not what we are focusing on. Our focus is to develop products because, you know, you need the full basket when you are approaching a hospital with products. So, we can't be just working on few products, and that doesn't complete the basket, and it's very hard to change the practice. So, we are moving up the value chain, as I told you earlier, on DES and some other new devices, DEBs, drug-rooting balloons, and some other specialized products, you know. So, that is where we are working on, and I think drug-rooting stands on the part of that basket. And I think import substitution, our focus is overall on the whole product category, whether it was renal or oncology or whether it was neonatal or it was vascular access. So we are working on across all categories to bring import substitution in real country.

Understood, sir. Thank you.

Thank you. The next question is from the line of Deepak from Sundara Mutual Fund. Please go ahead.

Yeah, thank you for the opportunity. Am I audible?

Yes, yes, we can answer.

Yeah, yeah. Hi, sir. So, first of all, congratulations on delivering good set of numbers on the top line as promised in the earlier call. Sir, my question was first on gross margin. So if I look at our nine months gross margin, what we delivered in the first three quarters, it was roughly between 68.5 to 69%. And you did highlight on the call that it is because, you know, our critical care and cardio vertical, which is our new vertical for us, which is ramping up nicely. And that is what you eventually want to grow in the next couple of years also. But if I look at Q4 gross margin, you know, there is a dip of almost 1.7 to 1.8% on a QOQ basis. So despite this two product going up, let's say, in terms of execution and also full quarter consolidation of high gross margin business like CTF and PendraCare, we just wanted to understand why there is a dip in the gross margin in Q4.

Yeah, Deepak, you know, I think the quarter forward impact is primarily because of product mix issue. You know, obviously, we have a large product portfolio, right? And in some cases, some of the products are lower margin on a gross basis. And so I think the impact of that is primarily because of product mix rather than anything else.

Okay, got it. And you also had mentioned about this price hikes, which we have taken 3 to 5% and gross margin of 66%. Sir, do you think there is risk to this number since the inflation is quite a lot? And I do understand that we operate at fairly high gross margin because of the nature of the business. I just wanted to understand how much price hike we would need to take incrementally, let's say, to offset any more erosion in the gross margin going forward.

Basically, you know, when we see today, our raw material is percentage around 32-33%, basically, because that's where the rest is the gross margin, basically. So, on that, we have seen almost a 20% increase in overall raw material pricing, when we spread across all the materials which we buy, you know, from packaging to basic raw materials, which are, a lot of them are polymers. So, Already, we see that around some of it is already mitigated by, you know, rupee depreciation across because we have almost two-thirds, more than two-thirds revenue coming from international business. And then we have done some price increases with customers between 3% to 5%. So that will also help. You know, today's situation is very fluid, and I think we'll have more clarity end of quarter one, you know, when we review everything, but at the present state, I think with the high inventory of raw material which we're carrying on as of 31st March, we're able to, you know, really, you know, manage it very well, and hopefully, you know, as we talk in the next few months from now, you know, the crude prices may soften from where they are today, and that will again, you know, Help us to mitigate those risks which have been created today. So, so far, I think we are okay. I don't see any huge risk, but let's wait for a few more months. So, interim, I think we are okay in the interim situation.

Okay. And so your renal segment, so last call, you were sounding a little bit cautious because of this Chinese dumping, right? But this quarter, you have done very well, like 25% QoQ growth in the renal revenue. So just wanted to understand, has something changed between the quarter for the execution to pan out so well? And, you know, how is the situation on that Chinese dumping?

If Chinese dumping continues, I think there is no, you know, unless until government, you know, things otherwise, the dumping continues. And you have to see, you know, from that angle that today Chinese are importing at 0% UD, only 5% GST repay on the finished product. Whereas I'm importing, I'm buying all the raw materials, I'm importing some raw materials, I pay 18% UD, I pay 2.5% UD, custom UD on my raw materials, 18% GST. There is a lot of cost inversions plus the dumping of the Chinese, you know. So all that is actually, you know, and that's the reason you see today hardly any needle bear has come in the last five to seven years in the country. In spite of, you know, the segment being very open and, you know, the growth still there in this segment. So I think that is a challenge. And, of course, Polymed being a large manufacturer, we are able to mitigate a lot of this. Because we have a lot of manufacturing excellence, you know, so we are able to mitigate that part. So, again, you know, our focus is to gain market share. We are working on that. And I think this dollar devaluation, you know, rupee devaluation against the dollar will also maybe one of the factors which may help us in the wrong run because, you know, somebody is importing products, they'll have to pay at a higher price. So I think, and we are also, you know, pushing the government to, you know, put some counter duties on the product. Let's see what happens, but I think overall 20-25% growth is still attainable in this business.

Okay. So, one last question on the acquisitions. So, would it be, will you be able to call out what was the CTF and PentraCare, let's say, calendar year, 25 full year revenue in terms of Euro million?

Deepak, for CTF, that number was about 17.5 million Euro, and for PentraCare, it was about 8 million Euro.

Okay. And, sir, in these terms, how much growth are we anticipating in this, both in FY27, in Euro terms?

In Euro terms, I think we should be growing for CTF in low W or 10 to 12%. And for PenderCare, because of the middle-aged situation and their exposure to that, I think we are restricting the guidance.

Okay. Okay. No worries, sir. Very helpful and all the best.

Thank you.

Thank you. Next question is from the line of Siddharth Negandi from CWC. Please go ahead. Siddharth, please go ahead with the question. Your line is unmuted.

Hi. Thanks for the follow-up. Just a couple of questions. On the 9 crore one-time cost that you mentioned in respect to the acquisitions, If you could give us some color around what that cost was, that was question number one. Question two was, if I had to sort of deduce. This is the 50-50 split in Europe and the rest of the world for your quarter four sales for GTF and PenderCare, right? Then that means the rest of the world's sales in quarter four may have a slight degrowth. Is that the right inference? And if so, could you share where that impact primarily was? That was question two.

I think the acquisition cost question is basically these are transaction related costs. So payments to advisors you have to do for undertaking the acquisition. So, you know, that's the cost. I think on your question, and you mean, you're mentioning sequential degrowth or year-on-year you're mentioning?

No, year-on-year. So basically, looking at your 65 crore split 50-50 into Europe and rest of the world and keeping that base, right? Europe seems to be more flat on Q4, FI26 versus 25, and rest of the world seems to be a minor degrowth.

Yes. So, Siddharth, I think it's important to understand that it's a B2B business. So, there are obviously on a quarter-on-quarter basis some differences on where the orders are coming from. It's not reflective of any significant trend in the business. I think best for such businesses to be looked at from a full year perspective, you know, these quarter-on-quarter variations can always happen in which geography we are selling the product.

Got it. Sure. And so, you had mentioned on the one-time cost being certain regulatory and employee costs. So, is there already some manpower rationalization and cost savings that one can expect?

So, these were basically costs which were, you know, just accounted for at the end of the year in quarter four and which impacted the quarter four numbers. And, you know, there is no manpower rationalization being done in any of these entities.

Got it. And on KBS, I just wanted to understand you mentioned 17.5 million this year, you know, and the acquisition call mentioned about 17 odd million in 24. So, was that performance?

So, it was a flat performance and it was primarily because of one of the tenders that they had been, one in the LATAM region was cancelled and was pushed out. And because of which they lost a certain revenue in last calendar year.

Did that answer your question?

We'll take the next question, which is from the line of Kharish Jens, from KJMC Capital. Please go ahead.

Am I audible? Yes, Giri ji, I can hear you very well, sir. Thank you, Ananshu ji, for taking my question. In the opening remarks, you mentioned that FI 26 was a year of transition. So I presume you're referring to the move from product-focused to a therapy-focused approach. That's correct, Giri ji.

You have actually understood very well.

And, you know, you also mentioned about the breakup of the segment revenue. I think you mentioned infusion. Vertical has gone down to 52% and venal has gone up to 11%. I could not capture the other percentages between cardio and onco.

These are Oncocardia, very new businesses, so we don't specifically, you know, call out those revenues. But, you know, the whole idea is that, you know, company at one point of time was doing 65% business on infusion. And we are trying to de-risk that and, you know, add more products in the other product categories. And I think that is really helping us to, you know, grow the business globally and also improve some gross margins. So that's the whole idea. We don't call out those numbers specifically because we're confidentially. We don't want to share what company is doing and that information goes out publicly.

But safe to assume that inclusion as a percentage of the overall revenue will still be coming down, even though it may grow on a standalone basis, but as a percentage of the overall inclusion may come down and the other segments may go up, and therefore pulling your gross margin higher?

Again, that is our core, core, core business. So, we think that it will stay around that 50% level in fusion because that's where polymetry. Today, if you see one of the products we manufacture, we have almost global 11% market share on the product. If it is 600 million of those pieces. So, that means, you know, we have global excellence on these products. You know, there are hardly any companies in India which can claim a 10% global market or any single product, and we have that today. So, I think that still remains to be our core business, you know, and all accessories we produce, we have a global excellence, we have a lot of patents on that product technology. So, that will be there, but, you know, as we move on to the higher price segment, you know, when you look at orthopedics or cardiology, the price per product is very high. So that, you know, infusion, which is, let's say, 10, 15, 20 rupees, these products are thousands of rupees or, you know, sometimes north of 20,000 also. So that is how the product mix, you know, revenue mix is changing.

So hopefully once the raw material price comes, becomes normal, then we can expect some expansion in the margin with this change in revenue.

Today we are calling out those margins. If you see the guidance we have given for India business, they are at around 25-27% EBITDA margin in spite of all the headwinds. What do you see today? And overall, we have guided for 23-25% that we know that the international businesses operate at lower EBITDA margin. So we are still guiding in these ranges because we know, and all this has been accounted for based on the current cruise price level. So if we see some improvement in cruise price level at the next few months, definitely, you know, those margins should get better. I think that's what we think. But at least from the current state, let's assume that we are, you know, in that band of 25-27%. But yes, we will try to deliver at a higher band what we have delivered in the past year also, in FY26. We delivered the numbers at a higher, you know, band of, you know, between 25 and 27 percent. We delivered at 26.8 percent EBITDA at the standalone level.

Thank you. And just a really good question on the margin. Is there any, I'm sure there must be a strategy which maybe you can highlight on how we plan to increase the margins in the companies which we recently acquired, CTIF and Pendra Care?

So, Gini J., it's a good question. So, what we are trying to do is, you know, we're trying to bring in a lot of synergies. So, a lot of, you know, engineering work we are doing in India right now. We are also looking at the global supply chain, helping them to secure materials at much lower price, what they were buying earlier. And also some part of manufacturing, you know, we will probably shift to India at some point of time once we have all the regulatory clearances to do that. So all that in the long run will help us to see currently these companies will operate, let's say, around 12 to 14 percent margin, you know, that is what we anticipate. But I think in the next two, three years, we could see that improvement going to around 18 to 20 percent.

Okay, that's wonderful. Thank you and all the best.

Thank you, sir.

Thank you. Ladies and gentlemen, that was the last question for today. With that, I now hand the conference over to Mr. Himanshu Bait for closing comments.

I'd like to thank all of you for being on the call today and hearing our updates on the company. And let me assure you again, we are in medical devices, healthcare business. It's bound to grow. Last year was a challenging year. Of course, again, a lot of strategic planning went in last year in terms of acquisitions and, you know, Capex spend. I think in terms of infrastructure, today the company has one of the best infrastructure. Some of you have visited plant already know that, that Polymer is one of the best infrastructures, you know, in terms of medtech manufacturing. And we continue to build very strongly. And as we are seeing more and more registrations coming through in many countries in the current year and also in the following year, we'll see our business increasing globally. And in India also, we are pushing hard, you know, in a lot of these cooperates today. The brand is very well-known. People see this brand as a quality product, and it has taken quite a while to do that. And I think we are in a very safe space, I can tell you that. And I'm pretty sure that once you see a performance, which I already guided today, I think you will see that happening, and I think you will see much better results in the coming years. Thank you very much.

Thank you. Ladies and gentlemen, on behalf of Polymedicure Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.