Q1 2027 Poly Medicure Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, you have been connected to the Poly Medicure conference call. The call will begin shortly. We request you to please stay connected. A reminder to all participants: you are connected for the Poly Medicure Limited conference call.

Speaker #1: The call will begin shortly. We request you to please stay connected. Thank you. Ladies and gentlemen, good day and welcome to the Poly Medicure Limited Q1 FY27 online conference call.

Operator: Ladies and gentlemen, good day, and welcome to the Poly Medicure Limited Q1 and FY27 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 your touchtone phone.

Speaker #1: As a reminder, all participants online will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Today on this call, we have with us the senior management team of the company, represented by Mr. Himanshu Webb, the Managing Director, and Mr. Rahul Gautam, President, Strategy and Corporate Development.

Operator: Today on this call, we have with us the senior management team of the company, represented by Mr. Himanshu Baid, the Managing Director, Mr. Rahul Gautam, President, Strategy and Corporate Development. I now hand the conference over to Mr. Himanshu Baid. Thank you and over to you, sir.

Speaker #1: I now hand the conference over to Mr. Himanshu Webb. Thank you, and over to you, sir.

Himanshu Baid: Yeah. Good evening, everyone. I welcome you to our Q1 FY27 earnings call. I sincerely thank all of you for being here today. Before I come to numbers, I want to give you a glimpse of our strategic vision 2030. We're calling this as a PolyMed 3.0. As you all know, PolyMed initiated operations in 1997 with an IPO of INR 2.65 crores using which we set up our first plant. In the next 25 years, we remain bootstrapped and slowly build our leadership in our core infusion therapy business by painstakingly building global quality products. During this period, business grew from zero to almost INR 7 billion in revenue. In 2021, PolyMed started 2.0 journey, which we call the inflection point in our history of the company. We did our first institutional fundraise, which resulted in multi-fold expansion of capacity.

Speaker #2: Good evening, everyone, and I welcome you to our Q1 FY27 earnings call. I sincerely thank all of you for being here today.

Speaker #2: Before I come to numbers, I want to give you a glimpse of our strategic vision 2030. And we are calling this PolyBind 3.0.

Speaker #2: As you all know, PolyMed initiated operations in 1997 with an IPO of ₹2.65 crores, using which we set up our first plant. In the next 25 years, we have remained bootstrapped and slowly built our leadership in our core infusion therapy business by painstakingly building global quality products.

Speaker #2: During this period, business grew from zero to almost INR 7 billion in revenue. In 2021, PolyMed started its 2.0 journey, which we call the inflection point in the history of the company.

Speaker #2: We did our first institutional fundraise, which resulted in a multi-fold expansion of capacity. We also entered into high-technology segments like cardiology, critical care, and orthopedics.

Himanshu Baid: We also entered into high technology segments like cardiology, critical care, and orthopedics. During this period, we also started an inorganic growth journey with acquisitions of PendraCare and Citieffe. The revenue during this period almost went up by 2.75 times to INR 1,875 in FY26. Starting FY27, we have initiated PolyMed 3.0 or Sail we are calling ascent. During this period, we have set a goal to double our revenue by FY30 by unlocking value via organic and inorganic expansion, leveraging technology to scale high complexity verticals globally, and deepening direct customer access, especially in international markets. I believe we are at a point of time in our journey where growth should happen exponentially, led by high technology, high margin segments. Given the strength of our balance sheet, where we continue to have strong liquidity, we believe this audacious goal is truly achievable.

Speaker #2: During this period, we also started our inorganic growth journey with acquisitions of Pentera Care and GDF. Revenue during this period almost went up by 2.75 times to INR 1,875 crore in FY26.

Speaker #2: Starting FY27, we have initiated PolyMed 3.0, a phase we are calling Ascent. During this period, we set a goal to double our revenue by FY30 by unlocking value via organic and inorganic expansion, leveraging technology to scale high-complexity verticals globally, and deepening direct customer access, especially in international markets.

Speaker #2: I believe we are at a point in our journey where growth should happen exponentially, led by high-technology, high-margin segments. Given the strength of our balance sheet, where we continue to have strong liquidity, we believe this audacious goal is truly achievable.

Himanshu Baid: I'm really excited about this phase, which I believe will truly make Poly Medicure a global MedTech MNC out of India. On the leadership front, we have already initiated actions to achieve our Poly Medicure 3.0 vision. We have appointed Indranil Mukherjee as our CEO for India and APAC, Bernardo Roca as CEO for Brazil. Indranil has joined the company on 1 June 2026. Bernardo has joined the company on 1 August 2026. We have also brought in Abhinav Hooda as the head of renal business in India to augment sales and also build a strong capability in this segment. I believe above leadership reinforcement will help us to put a strong position to deliver on our aspirations. Moving on to financial performance of the company on Q1 financial results. On the financial performance side, let me start with the standalone performance as this remains core for our group.

Speaker #2: I'm really excited about this phase, which I believe will truly make PolyMed a global medtech MNC out of India. On the leadership front, we have already initiated actions to achieve our PolyMed 3.0 vision.

Speaker #2: We have appointed Indrani Mukherjee as our CEO for India and APAC, and Renata Roka as CEO for Brazil. Indrani joined the company on June 1, 2026.

Speaker #2: Renata has joined the company on August 1, 2026. We also brought in Abhirani Huda as the head of the renal business in India, to augment sales and also build a strong capability in this segment.

Speaker #2: I believe the above leadership reinforcements will help us to put us in a strong position to deliver on our aspirations. Moving on to the financial performance of the company, on the Q1 financial results.

Speaker #2: On the financial performance side, let me start with the standalone performance. As this remains core for our group, standalone revenue for Q1 was ₹431 crore, up 12.3%, with domestic at ₹146 crore, giving a growth of 16.2%, and international at ₹281.8 crore, giving a growth of 10%.

Himanshu Baid: Standalone revenue for Q1 was INR 431 crores, up 12.6% with domestic at INR 146 crores, giving a growth of 16.2%, and international at INR 281.8 crores, giving a growth of 10%. Gross profit for Q1 was 71.5%, showing significant improvement due to better product mix and impact of price hikes implemented in Q1 and inventory gains. I expect that our growth margin should continue to reflect on historic margin trend of 68% to 69% in the near term. We had guided a standalone EBITDA margin of 25% to 27% for FY27, but we have delivered 28%, 100 basis higher than the guided range. Absolute operating EBITDA was INR 120.8 crores, up from 18.8% on year-on-year basis. This was despite employee cost rising almost by 29%, driven by 35% increase in minimum wages in Haryana with effect from 1 April 2026. Increase in headcount as well as impacting increments for FY27.

Speaker #2: Gross profit for Q1 was 71.45%, showing significant improvement due to better product mix and impact of price tag implemented in Q1 and inventory gain.

Speaker #2: I expect that our gross margin should continue to reflect the historic margin trend of 68 to 69% in the near term. We have guided our standalone EBITDA margin to be 25 to 27% for FY27, but we have delivered 28%, which is 100 bps higher than the guided range.

Himanshu Baid: We had guided a standalone EBITDA margin of 25% to 27% for FY27, but we have delivered 28%, 100 basis higher than the guided range. Absolute operating EBITDA was INR 120.8 crores, up from 18.8% on year-on-year basis. This was despite employee cost rising almost by 29%, driven by 35% increase in minimum wages in Haryana with effect from 1 April 2026. Increase in headcount as well as impacting increments for FY27.

Speaker #2: Absolute operating EBITDA was ₹120.8 crores, up by 18.8% on a year-on-year basis. This was despite employee costs rising almost 29%, driven by a 35% increase in minimum wages in Haryana, with effect from 1 April 2026, an increase in headcount, as well as impacting increments for FY27.

Himanshu Baid: Now, on the consolidated picture, consolidated revenue was INR 525 crores, up 30.3%. Of that, INR 72.3 crores came from acquisitions. On organic basis, revenue was INR 453.1 crores, up 12.4%. Within international, Europe grew 43.8% to INR 187.3 crores, and importantly, it grew 17.6% organically, reflecting improvement in the performance in the region. As you know, last year Europe was a laggard, and this year, as we have onboarded new customers, we were able to come back to our original growth or our planned growth of 17% to 18% as we had forecasted in the beginning of the year. Rest of the world grew at 30.3% on reported basis, or only 4.0% organically. The reason for low growth was 32% de-growth in the Middle East due to ongoing West Asia crisis.

Speaker #2: Now, on the consolidated picture, consolidated revenue was ₹525 crores, up 30.3%. Of that, ₹72.3 crores came from acquisitions. So, on an organic basis, revenue was ₹453.1 crores, up 12.4%.

Speaker #2: Within international, Europe grew 43.8% to ₹187.3 crores, and importantly, it grew 17.6% organically, reflecting improvement in performance in the region. As you know, last year, Europe was a laggard, and this year, as we have added and onboarded new customers, we were able to come back to our original growth or planned growth of 17% to 18%, as we had forecasted at the beginning of the year.

Speaker #2: The rest of the world grew at 30.3% on a reported basis, and only 4.0% organically. The reason for the low growth was a 32% degrowth in the Middle East due to the ongoing West Asia crisis.

Himanshu Baid: Customer demand in the region is intact, but given the current logistic and infrastructure bottlenecks, we are unable to meet that demand. We are hopeful that once the situation improves in the region, we will return to normalcy. Our order book is pretty strong for Middle East, but currently, we are unable to ship the products. Consolidated gross profit was INR 85.6 crores at a margin of 73.4%, up 495 basis points. The better margin profile of the newly acquired businesses helping improve group's gross margin. Consolidated operating EBITDA was INR 126.7 crores, up 17.7%, at a margin of 24.1%, within our guided range of 23% to 25% for the year. IV therapy grew by 11.1% to INR 259.2 crores, led by strong domestic growth on back of rising share of higher value-added products and price increases.

Speaker #2: Customer demand in the region is intact, but given the current logistics and infrastructure bottlenecks, we are unable to meet that demand. We are hopeful that once the situation improves in the region, we will return to normalcy.

Speaker #2: Our order book is pretty strong for the Middle East, but currently, we are unable to ship the products. Consolidated gross profit was ₹385.6 crore at a margin of 73.4%, up 495 basis points.

Speaker #2: The better margin profile of the newly acquired business is helping improve the group's gross margin. Consolidated operating EBITDA was ₹126.7 crore, up 17.7%, at a margin of 24.1%, which is within our guided range of 23% to 25% for the year.

Speaker #2: Infusion therapy grew by 11.1% to ₹259.2 crore, led by strong domestic growth on the back of a rising share of higher value-added products and price increases.

Himanshu Baid: Internationally, we have started to witness a strong recovery in the business despite a 32% de-growth in the Middle East markets. Orthopedic contributed INR 49.2 crores, which reflects the consolidation of TTFP. Cardiology grew from INR 2.9 crores to INR 28.6 crores, led by PendraCare acquisition together with genuine scale-up of domestic business. Others grew by 18.5% to INR 149 crores, constituting the balance. The one soft spot was renal. They de-grew by 3.8% to INR 43.2 crores. The renal business was impacted by continued pricing pressure from Chinese players in India, but we made a conscious choice to raise prices to cushion the raw material price increases rather than different volume at any cost. Separately, there is an important development.

Speaker #2: Internationally, we have started to witness a strong recovery in the business despite 32% degrowth in the Middle Eastern markets. Orthopedic contributes 49.2 crores, which reflects the consolidation of TTFE, cardiology group from 2.9 crores to 28.6 crores, led by Pentera Care acquisition together with Genuine scale-up of domestic business.

Speaker #2: Others grew by 18.5% to ₹149 crore, constituting the balance. The one soft spot was renal, which degrew by 3.8% to ₹43.2 crore. The renal business was impacted by continued pricing pressure from Chinese players in India, but we made a conscious choice to raise prices to cushion the raw material price increases rather than drive volume at any cost.

Speaker #2: Separately, there is an important development. Based on an application filed by the company, the government has initiated an anti-dumping investigation into imports of dialyzers from China and Malaysia.

Himanshu Baid: Based on application filed by the company, the government has initiated an anti-dumping investigation into imports of dialyzers from China and Malaysia, and we have claimed for an injury margin of 20%, and we hope in the next few months we will see some decision taken by the government to protect local industry. On the balance sheet front, the liquidity remains strong and with a cash of about INR 855 crores, which is the reserve we have set aside for strategic initiatives. Now let me connect this to our forward-looking guidance for FY27. Before this, I would also like to point out that company has been now pushing hard on the developing new medical devices. For that, we have also initiated a lot of clinical studies.

Speaker #2: And we have claimed for an injury margin of 20%, and we hope that in the next few months we will see some decision taken by the government to protect the local industry.

Speaker #2: On the balance sheet front, the liquidity remains strong, with cash of about ₹855 crore, which is the reserve we have set aside for strategic initiatives.

Speaker #2: Now, let me connect this to a forward-looking guidance for FY27. Before this, I would also like to point out that the company has now been pushing hard on developing new medical devices.

Speaker #2: And for that, we have also initiated a lot of, you know, clinical studies. And as support, the Government of India has also granted aid of around ₹3.3 crore.

Himanshu Baid: As a support, Government of India has also granted an aid of around INR 3.3 crores for undertaking clinical studies of some new clinical devices which we have just recently developed.

Speaker #2: For undertaking clinical studies of some new critical devices, which have just recently been developed. On the guidance front, on a consolidated basis, we are guiding for revenue of ₹2,300 to ₹2,400 crores, including a full-year consolidation of Pantera Care and TTF. We are maintaining this guidance after quarter one.

Rahul Gautam: On the guidance front, on the consolidated basis, we are guiding for revenue of INR 2,300 to 2,400 crores, including the full-year consolidation of PendraCare and GDS. We are maintaining this guidance after Q1. On standalone basis, we maintain revenue guidance of INR 1,900 to 2,000 crores, with the domestic business expected to grow over 20% and international business growing by over 15%. Standalone EBITDA margin is expected to be between 25% and 27%, though currently in Q1 we have done 28%, still we think that maybe for Q1 the margin was slightly higher because of price increases we have taken and some inventory correction. Hopefully we should be in the higher range of 25% to 27%. The consolidated EBITDA margin is expected to be in the range between 23% and 25%.

Himanshu Baid: On the guidance front, on the consolidated basis, we are guiding for revenue of INR 2,300 to 2,400 crores, including the full-year consolidation of PendraCare and GDS. We are maintaining this guidance after Q1. On standalone basis, we maintain revenue guidance of INR 1,900 to 2,000 crores, with the domestic business expected to grow over 20% and international business growing by over 15%. Standalone EBITDA margin is expected to be between 25% and 27%, though currently in Q1 we have done 28%, still we think that maybe for Q1 the margin was slightly higher because of price increases we have taken and some inventory correction. Hopefully we should be in the higher range of 25% to 27%. The consolidated EBITDA margin is expected to be in the range between 23% and 25%.

Speaker #2: On a standalone basis, we maintain revenue guidance of ₹1,900 to ₹2,000 crore, with the domestic business expected to grow over 20% and international business growing by over 15%.

Speaker #2: Standalone EBITDA margin is expected to be between 25% to 27%. Though currently, in the first quarter, we have run at 28%, we still think that, you know, maybe for the first quarter, the margin was slightly higher because of the price increases we have taken.

Speaker #2: And some inventory correction, but hopefully we should be in the higher range of, you know, 25% to 27%, with consolidated EBITDA margin expected to be in the range between 23% and 25%.

Rahul Gautam: This quarter we are on 24%, we are pretty much in the range, hopefully we can maintain this. We expect to spend between INR 200 to 225 crores in the CapEx for FY27. In summary, this is a quarter where the strategy started converting into numbers. The high technology, high complexity segments we invested in through PolyMed 2.0 are now generating the value we anticipated. I remain confident in the direction of the business for the year FY27. Thank you very much for your trust and time. I will now hand over to operator and will be very happy to take your questions. Thanks again, everyone.

Himanshu Baid: This quarter we are on 24%, we are pretty much in the range, hopefully we can maintain this. We expect to spend between INR 200 to 225 crores in the CapEx for FY27. In summary, this is a quarter where the strategy started converting into numbers. The high technology, high complexity segments we invested in through PolyMed 2.0 are now generating the value we anticipated. I remain confident in the direction of the business for the year FY27. Thank you very much for your trust and time. I will now hand over to operator and will be very happy to take your questions. Thanks again, everyone.

Speaker #2: This quarter, we have run at 24%, so we are pretty much in the range, and hopefully we can maintain this. We expect to spend between ₹200 to ₹225 crore in Capex for FY27.

Speaker #2: In summary, this is a quarter where the strategy started converting into numbers. The high-technology, high-complexity segments we invested in through Polymer 2.0 are now generating the value we anticipated.

Speaker #2: I remain confident in the direction of the business for the year FY27. Thank you very much for your trust and time. I will now hand over to the operator and will be very happy to take your questions.

Speaker #2: Thanks again, everyone.

Operator: Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Before we take the questions, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two questions only per participant. If you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the questions assemble. First question comes from the line of Abhaya Gandhi with Bajaj Alternate Investment Management Limited. Please go ahead.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin with a question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Before we take the questions, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your questions to two per participant.

Speaker #1: If you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Bhavya Gandhi with Bajaj Alternate Investment Managers Limited.

Speaker #1: Please go ahead.

Abhaya Gandhi: Yeah. Hi, thanks for the opportunity. Hope I'm audible.

Bhavya Gandhi: Yeah. Hi, thanks for the opportunity. Hope I'm audible.

Speaker #3: Yeah, hi. Thanks for the opportunity. Hope I'm audible.

Operator: Yes, sir, you are.

Rahul Gautam: Yes, sir.

Speaker #1: Yes, sir, you are.

Rahul Gautam: Yeah. Just wanted to understand on the standalone business, we are looking at an absolute revenue of closer to INR 350 to 400 crores, whereas in Q1 we've grown closer to 12% on the standalone business. If you can just help us tally the number in terms of absolute revenue, INR 350 to 400 crores, where exactly are we planning to get there? Yeah, that is question one.

Bhavya Gandhi: Yeah. Just wanted to understand on the standalone business, we are looking at an absolute revenue of closer to INR 350 to 400 crores, whereas in Q1 we've grown closer to 12% on the standalone business. If you can just help us tally the number in terms of absolute revenue, INR 350 to 400 crores, where exactly are we planning to get there? Yeah, that is question one.

Speaker #3: Yes, sir.

Speaker #2: Yeah.

Speaker #3: Yeah. Just wanted to understand, on the standalone business, we are looking at an absolute revenue of close to 350 to 400 crores. Whereas in Q1, we have grown close to 12% on the standalone business.

Speaker #3: So, if you can just help us tally the numbers, in terms of absolute revenue—₹350 to ₹400 crore—where exactly are we planning to get there?

Speaker #3: Yeah, that is question one.

Rahul Gautam: You mean the incremental growth of 350 to 400? That's what you mean?

Speaker #2: Sir, do you mean the incremental growth from 350 to 400? Is that what you mean?

Abhaya Gandhi: Yeah.

Bhavya Gandhi: Yeah.

Speaker #3: Yeah, yeah.

Rahul Gautam: I think our Q1 tends to be the lowest, if you look at the history of the business, and it tends to grow as we go into the financial year. This year, because we've also taken a price hike at the beginning of the financial year to account for the increase in raw material prices, the beginning of the year was slightly slow, and we recovered some of the revenue in the later part of the quarter. As that momentum continues, we believe that we should be able to get to much better numbers in Q2 onwards and still achieve the guidance that we've given.

Speaker #2: Yeah, so I think our Q1 tends to be the lowest if you look at the history of the business, and it tends to grow as we go into the financial year.

Speaker #2: This year, because we also took a price hike at the beginning of the financial year to account for the increase in raw material prices, the beginning of the year was slightly slow, and we recovered some of the revenue in the later part of the quarter.

Speaker #2: Has that momentum continued? We believe that we should be able to get to much better numbers in Q2 onwards, and still achieve the guidance that we've given.

Abhaya Gandhi: Got it. Fair enough. Sir, the second question is regarding the inorganic acquisition. We have closer to INR 850 crores in terms of cash. If you can throw some light on what exactly are we looking out for. Are we going to utilize the entire amount of INR 850 odd crores or how is it? That is question two.

Bhavya Gandhi: Got it. Fair enough. Sir, the second question is regarding the inorganic acquisition. We have closer to INR 850 crores in terms of cash. If you can throw some light on what exactly are we looking out for. Are we going to utilize the entire amount of INR 850 odd crores or how is it? That is question two.

Speaker #3: Got it. Fair enough. And sir, the second question is regarding the inorganic acquisition. We have close to ₹850 crores in terms of cash. If you can throw some light on what exactly we are looking out for?

Speaker #3: Are we going to utilize the entire amount of 850-odd crores, or how is it? Yeah, that is question two.

Rahul Gautam: Basically, we are looking at expansion, organic and inorganic. As we have done a very small acquisition in Brazil recently, we are trying to put our presence there, and the board has also allocated some funds for Brazilian market where we can expand the direct sales presence. Of course, we are looking at technologies around three critical businesses, in cardiology, oncology, and orthopedics. Wherever we find an opportunity, we will look at that. Some of the funds are also allocated for the CapEx to be done at two plants, which are under construction at this moment. One is coming in Palwal, in Faridabad, and then one in Noida, basically in the medical device park.

Speaker #2: So, basically, we are looking at expansion, both organic and inorganic. And, as we have done a very small acquisition in Brazil recently, we are trying to, you know, establish our presence there, and we have also allocated some funds for the Brazilian market where we can expand with a direct sales presence.

Speaker #2: And of course, we are looking at technologies around three critical businesses: cardiology, oncology, and orthopedics. We are also looking at adjacent technologies. Wherever we find an opportunity, we will pursue that.

Speaker #2: And some of the funds are also allocated for the Capex to be done at two plants which are under construction at this moment.

Speaker #2: And one is coming in Polyvalence in Faizabad, and then one in Noida, basically in the medical device part.

Abhaya Gandhi: Okay, got it. Would you like to share some asset terms for the CapEx that you're planning?

Bhavya Gandhi: Okay, got it. Would you like to share some asset terms for the CapEx that you're planning?

Speaker #3: Okay, got it. Would you like to share some asset terms for the CapEx that you're planning?

Rahul Gautam: The asset terms for us, if you look at the past, remains between 1.2 to 1.4. We expect on a balance sheet this similar kind of asset then to continue.

Speaker #2: The asset terms for us, if you look at the past, remain between 1.2 to 1.4. And we expect, on a balance sheet basis, a similar kind of asset term to continue.

Abhaya Gandhi: Okay, fair enough, sir. Thank you so much. I'll get back in the queue. Thank you.

Bhavya Gandhi: Okay, fair enough, sir. Thank you so much. I'll get back in the queue. Thank you.

Speaker #3: Okay, fair enough, sir. Thank you so much. I'll get back in the queue. Thank you.

Operator: Thank you. Next question comes from the line of Siddharth Negi with CWCP Square.

Speaker #1: Thank you. Next question comes from the line of Siddharth in Heganthi with CWC. Please go ahead.

Siddharth Negi: Hi. Thank you for the opportunity. If I look at our India growth ex of renal, and I am assuming all of renal was India, then that is 27%. Overall infusion growth was much lower, right, around 11%. What was the therapy that drove India growth, if you could give us some understanding. On the disruption that you've seen in ROW export. Given that this is really at some level an essential product. Have you seen the resumption of exports in Middle East, or are you still envisaging this to continue until the conflict settles? The third one is, do we expect further RM cost impact in Q2 versus what we've seen in Q1, given your inventory levels? I know you've taken certain price increases, but how should one think of gross margins in Q2? Yeah. These are my three questions.

Sidharth Negandhi: Hi. Thank you for the opportunity. If I look at our India growth ex of renal, and I am assuming all of renal was India, then that is 27%. Overall infusion growth was much lower, right, around 11%. What was the therapy that drove India growth, if you could give us some understanding. On the disruption that you've seen in ROW export. Given that this is really at some level an essential product. Have you seen the resumption of exports in Middle East, or are you still envisaging this to continue until the conflict settles? The third one is, do we expect further RM cost impact in Q2 versus what we've seen in Q1, given your inventory levels? I know you've taken certain price increases, but how should one think of gross margins in Q2? Yeah. These are my three questions.

Speaker #2: Hi. Thank you for the opportunity. If I look at our India growth versus the regional plan, I'm assuming all of Renal was India. Then, that is 27%.

Speaker #2: But overall, infusion growth was much lower, right? Around 11%. So, what was the one that drove—or what was the therapy that drove India growth? If you could give us some understanding?

Speaker #2: And on the disruption that you've seen in ROW exports, right, given that this is really at some level an essential product, have you seen the resumption of exports in the Middle East, or are you still envisaging this to continue until the conflict is settled?

Speaker #2: And the third one is, you know, do we expect further RM cost impact in Q2, you know, versus what we've seen in Q1, given your inventory levels?

Speaker #2: I know you've taken certain price increases, but how should one think of gross margins in Q2? Yeah, these were my three questions.

Rahul Gautam: Yeah. Thank you for these questions. Let me take the first one, which is the segment which has driven the growth for us domestically. As you rightly said, our IV therapy business has grown at about 11%, and this reflects the performance both domestically and internationally. On the domestic side, infusion business has actually grown 20% plus for us in this quarter. The other segment which has grown for us is obviously cardiology, critical care, two segments which we have recently initiated, and those are contributing to growth quite meaningfully in this quarter. Your second question, Ketan.

Speaker #4: Yeah. No, thank you for these questions. Let me take the first one, which is the segment that has driven the growth for us domestically, right?

Speaker #4: As you rightly said, our infusion therapy business has grown at about 11%. This reflects our performance both domestically and internationally. On the domestic side, the infusion business has actually grown over 20%.

Speaker #4: For us, in this quarter, the other segment which has grown for us is obviously cardiology and critical care—two segments which we have recently initiated.

Speaker #4: And those are contributing to growth quite meaningfully in this quarter. Your second question, Kelly?

Siddharth Negi: On the second question, the supply chain on the shipping is still disrupted right now. If you look at the shipping schedule, shipping schedule is still disrupted for Middle East, and it is still hard to find containers which can go to Middle East ports. Still the disruption continues. Hopefully, in coming weeks, we may see something easing out. On the demand side, we see still it is an intact demand. We've ordered from customers. They're piling up at the ports, but unfortunately, the ships are not calling, so they are stuck up at the ports. That is the issue. On the price side, I think currently as crude stays where it is, I think we don't see a major impact on raw material cost. A very minor few percent here and there, but more or less, I think, probably we have almost seen that peak off.

Sidharth Negandhi: On the second question, the supply chain on the shipping is still disrupted right now. If you look at the shipping schedule, shipping schedule is still disrupted for Middle East, and it is still hard to find containers which can go to Middle East ports. Still the disruption continues. Hopefully, in coming weeks, we may see something easing out. On the demand side, we see still it is an intact demand. We've ordered from customers. They're piling up at the ports, but unfortunately, the ships are not calling, so they are stuck up at the ports. That is the issue. On the price side, I think currently as crude stays where it is, I think we don't see a major impact on raw material cost. A very minor few percent here and there, but more or less, I think, probably we have almost seen that peak off.

Speaker #2: So on the second question, you know, the supply chain is, you know, on the shipping or, you know, are still disrupted, right?

Speaker #2: Now, if you look at the shipping schedule, the shipping schedule is still disrupted for the Middle East, and it's still hard to find containers which can go to Middle East ports.

Speaker #2: So still, the disruption continues. Hopefully, in the coming weeks, we may see something easing out. But on the demand side, we see, you know, it's still an intact demand.

Speaker #2: We have orders from customers. We are piling up at the ports. But unfortunately, as the ships are not calling, they are stuck at the ports.

Speaker #2: So, that's the issue. On the price side, I think currently, as crude stays where it is, we don't see a major impact on raw material cost.

Speaker #2: You know, maybe a minor few percent here and there, but more or less, I think probably we have, you know, almost seen that peak off.

Rahul Gautam: Right.

Speaker #3: All right. And just on the acquisitions, any update in terms of how the integration is going? You know, how are you thinking about integration in terms of cross-sell, or the movement of some of that production back to India?

Siddharth Negi: Just on the acquisitions, any update in terms of how the integration is going? How are you thinking of any integration in terms of cross-sell or the movement of some of that production back to India? Just some updates on that.

Sidharth Negandhi: Just on the acquisitions, any update in terms of how the integration is going? How are you thinking of any integration in terms of cross-sell or the movement of some of that production back to India? Just some updates on that.

Speaker #3: Just some updates on that.

Rahul Gautam: Yeah, Sudarshan, I think we are quite happy with the way how the integration process is going on. For both the acquisitions that we've done, we have clearly identified areas of benefit that both the companies see with each other. We have created a group, which is continuously following up on all of these synergies. This includes across the cost items as well as on the R&D side, plus the sales velocity that we're trying to increase. On an overall basis, we are very happy. On the part of moving the manufacturing process to India, we are currently working with both PendraCare and CTF on that part. Given this is a regulated sector and any such process change needs regulatory approval, some of these processes currently are at the regulatory approval stage.

Speaker #2: Yes, Siddharth, I think, you know, we are quite happy with the way how the integration process is going on. For both the acquisition that we've done, we have clearly identified areas of benefit that both the companies see with each other.

Speaker #2: We have created a group which is continuously following up on all of these synergies. This includes across the cost items, as well as on the R&D side, plus the sales velocity that we're trying to increase.

Speaker #2: So, on an overall basis, we are very happy. On the part of moving the manufacturing process to India, we are currently working with both PendreCare and CTF on that part.

Speaker #2: Given this is a regulated sector, and any such process change needs regulatory approval, some of these processes are currently at the regulatory approval stage.

Siddharth Negi: Got it. Rahul, have we already started seeing some cross-sales synergies, or is that going to be more later in the year?

Sidharth Negandhi: Got it. Rahul, have we already started seeing some cross-sales synergies, or is that going to be more later in the year?

Speaker #3: Got it. Rahul, so have we already started seeing some cross-sales synergies, or is that going to be more later in the year?

Rahul Gautam: I would expect some of this to start playing out from next financial year onwards, given medical devices is a regulated sector, any new market that you want to open up, like even for India, if you want to bring those products into India, we need to take the approval from the CDSCO, and that process is on. I would expect that to be visible from next financial year onwards.

Speaker #2: I would expect some of this to start playing out from next financial year onwards, because, you know, all of these you know, given medical devices is a regulated sector, any new market that you want to open up, like even for India, if you want to bring those products into India, we need to take the approval from the CDSO.

Speaker #2: And that process is on, so I would expect that to start being visible from next financial year onwards.

Siddharth Negi: Got it. Got it, thanks.

Sidharth Negandhi: Got it. Got it, thanks.

Speaker #3: Got it. Got it. Thanks.

Rahul Gautam: Thanks, Sudarshan.

Speaker #2: Thanks, Siddharth.

Operator: Thank you. Reminder to all the participants, kindly limit your question to two question only per participant. If you have a follow-up question, you can rejoin the queue. Our next question comes from the line of Raksha Srivastava from Narmada Financial Services. Please go ahead.

Speaker #1: Thank you. Reminder to all the participants: kindly limit your questions to two per participant. If you have a follow-up question, you can rejoin the queue.

Speaker #1: Next question comes from the line of Raksha Srivastava from Normalia Financial Services. Please go ahead.

Raksha Srivastava: Hello. Am I audible?

Speaker #5: Hello. Are you audible?

Rahul Gautam: Can you be louder, please? We can't hear you.

Speaker #2: Can you be louder, please? We can't hear you.

Operator: Participant has left the queue. We can move forward to the next participant. Our next question comes from the line of Bharat C. Shah with BCS Capital Ideas Private Limited. Please go ahead.

Speaker #1: The participant has left the queue. We can move forward to the next participant. The next question comes from the line of Bharat Sisha with BCS Capital Ideas Private Limited.

Speaker #1: Please go ahead.

Bharat C. Shah: Yeah. Hi, Himanshu.

Speaker #6: Yeah, hi, Himanshu.

Rahul Gautam: Yeah.

Himanshu Baid: Yeah.

Speaker #1: Yeah.

Bharat C. Shah: Good to see the hunger for the growth is enunciated in PolyMed 3.0. The first question is, we have said we want to double the turnover and margins to be the industry-leading margins. The growth will come both organically as well as inorganically.

Speaker #6: It's good to see that the hunger for growth is enunciated in Polymed 3.0. So, the first question is: we have said we want to double the turnover and have margins that are industry-leading.

Speaker #6: And the growth will come both organically as well as inorganically. So, when you say 2030, I presume it is March 2030? So, four years, right?

Rahul Gautam: Correct.

Himanshu Baid: Correct.

Bharat C. Shah: When you say 2030, I presume it is March 2030. Four years, right?

Rahul Gautam: Yeah.

Himanshu Baid: Yeah.

Bharat C. Shah: Okay. That means doubling will mean about 18% compounded growth in the four-year journey.

Speaker #2: Yeah.

Speaker #6: Okay. And that means doubling will mean about 18% compounded growth in the four-year journey. So how much of that is counted as organic?

Rahul Gautam: Correct.

Himanshu Baid: Correct.

Bharat C. Shah: How much of that is counted as organic?

Rahul Gautam: Bharat, if you see current avatar, company does around 80% organic business and 20% inorganic business. I think we'll probably continue at a similar run rate.

Himanshu Baid: Bharat, if you see current avatar, company does around 80% organic business and 20% inorganic business. I think we'll probably continue at a similar run rate.

Speaker #2: So Bharat, if you see, in the current avatar, the company does around 80% organic business and 20% inorganic business. And I think we'll probably continue at a similar run rate.

Bharat C. Shah: Okay. About 14% and 15% domestic, sorry, organic, and 3% to 4% would come from acquisition.

Speaker #6: Okay. So, about 14–15% domestic, sorry, organic, and 3–4% would come from acquisition.

Rahul Gautam: That's the trajectory, basically.

Himanshu Baid: That's the trajectory, basically.

Speaker #2: That's right. So that's the trajectory, basically.

Bharat C. Shah: Sure. By industry-leading margin, I presume much better than what we have outlined for the current year. What kind of margins should one assume on that?

Speaker #6: Sure. And by industry-leading margin, I presume you mean much better than what we have outlined for the current year. But what kind of margins should one assume for that?

Rahul Gautam: Bharat, this is Rahul. If you look at the margin profile of Poly Medicure today, we are already the flagbearers in terms of profitability across the industry. I think we have the ability to improve our margins even now, but given we are focusing on growth in the near term, we want to keep the margins in the similar range. Currently, obviously, margins have been between, we have guided for 25% to 27% margin. We expect that we should close this year with upper end of that guidance range. As the scale happens, we should be able to increase that margin as well. Given we will be reinvesting back in the business, from a modeling perspective, assuming a similar kind of margin will be a reasonable assumption to take.

Speaker #2: Bharat, this is Rahul. You know, if you look at the margin profile of Polymed today, we are already the flag bearers in terms of profitability across the industry.

Speaker #2: You know, I think we have the ability to improve our margins even now. But, you know, given we are focusing on growth in the near term, we want to, you know, keep the margins in the similar range, you know, currently, obviously, margins have been between, you know, we've kind of thought 25 to 27% margin.

Speaker #2: We expect that we should close this year at the upper end of that guidance range. As the scale increases, we should be able to increase that margin as well.

Speaker #2: But, you know, given we'll be reinvesting back in the business, from a modeling perspective, assuming a similar kind of margin would be a reasonable assumption to take.

Bharat C. Shah: Similar margins, but not lower, right?

Speaker #6: So, similar margins but not lower, right?

Rahul Gautam: Yes, that's correct.

Speaker #2: Yes, that's correct.

Bharat C. Shah: Okay. Himanshu, I'm just trying to understand. When we look at somebody like Meril, which is doing a lot of cardiology related business.

Speaker #6: Okay. And Himanshu, I'm just trying to understand. When we look at somebody like Meryl, which is doing a lot of cardiology-related business, the scale-up as well as the margins earned—the scale-up itself has happened at a pretty rapid pace.

Rahul Gautam: Yeah.

Himanshu Baid: Yeah.

Bharat C. Shah: The scale-up is really the margins earned. The scale-up itself has happened at a pretty rapid pace.

Rahul Gautam: Yeah.

Himanshu Baid: Yeah.

Bharat C. Shah: The margins also are quite impressive. I was just wondering what kind of opportunities we can hunt around, because this kind of margins and the rapid scale-up in the business, what are your own thoughts and your observation?

Speaker #6: And the margins also are quite impressive. So, you know, I was just wondering what kind of opportunities we can hunt around, because with these kinds of margins and the rapid scale-up in the business, what are your own thoughts and your observations?

Rahul Gautam: Bharat, Meril started the cardiology business around 15 years ago. It's not something that they've started new. They had started this business almost 15 years ago, developing products. Poly Medicure was never in that space earlier. Of course, we still had the great margin profile between 25% and 27%. We have started cardiology only 2 years ago, and that's how we are building it up, developing products. As I just told you, we have been given a grant of INR 3.3 crores for clinical studies in India, because a lot of these are import substitution devices. That's been our focus. As we move up, again, regulatory pathway is very important because that needs time, and it cannot be like that you build a product and you can start selling tomorrow. It's all about regulatory pathway, clinical studies.

Himanshu Baid: Bharat, Meril started the cardiology business around 15 years ago. It's not something that they've started new. They had started this business almost 15 years ago, developing products. Poly Medicure was never in that space earlier. Of course, we still had the great margin profile between 25% and 27%. We have started cardiology only 2 years ago, and that's how we are building it up, developing products. As I just told you, we have been given a grant of INR 3.3 crores for clinical studies in India, because a lot of these are import substitution devices. That's been our focus. As we move up, again, regulatory pathway is very important because that needs time, and it cannot be like that you build a product and you can start selling tomorrow. It's all about regulatory pathway, clinical studies.

Speaker #2: So Bharat, Meryl started the cardiology business around 15 years ago, so it's not something they've started recently. They started this business almost 15 years ago.

Speaker #2: Developing products, and PolyMed was never in that space earlier. And of course, we still had a great margin profile, between 25% and 27%.

Speaker #2: And we have started cardiology only two years ago, and that's how we are building it up—taking a, you know, developing products, as I just told you. You know, we have given a grant of ₹3.3 crores for clinical studies in India, because a lot of these are import substitution devices.

Speaker #2: So that's been our focus. And as we move up, you know, again, the regulatory pathway is very important, because that needs time, and it cannot be that you build a product and can start selling tomorrow.

Speaker #2: So, it's all about regulatory pathways and clinical studies. We're building this up, and I think in the next two to three years, you will see a lot of new products coming from our portfolio.

Rahul Gautam: We are building this up, and I think in next 2, 3 years, you will see a lot of new products coming from our portfolio on cardiology side. I think that's a journey we need to take. Let's not forget that we have our global excellence on infusion and vascular access, and we will continue to build that globally also. We have our cash cow, we have a product which works very well for us. We'll continue to build there, but we'll also continue to invest in this new area of orthopedic cardiology and critical care that will help us to actually grow business in India and internationally in near future.

Himanshu Baid: We are building this up, and I think in next 2, 3 years, you will see a lot of new products coming from our portfolio on cardiology side. I think that's a journey we need to take. Let's not forget that we have our global excellence on infusion and vascular access, and we will continue to build that globally also. We have our cash cow, we have a product which works very well for us. We'll continue to build there, but we'll also continue to invest in this new area of orthopedic cardiology and critical care that will help us to actually grow business in India and internationally in near future.

Speaker #2: On the cardiology side, I think that's the journey we need to take. But let's not forget that we have our global excellence in infusion and vascular access.

Speaker #2: And we will continue to build that globally also. So we have a cash cow, and we have a product which works very well for us.

Speaker #2: So we'll continue to build there, but we'll also continue to invest in this new area of orthopedics, cardiology, and critical care that will help us to actually, you know, grow business in India and internationally in the near future.

Bharat C. Shah: Okay. Just one last thing. Last year, in many ways, has been a bit of a tumultuous kind of a year where many imponderables kept coming in. Many of them outside your control in the external environment. Today as we stand and with armed with some of the acquisitions that we have done, with the plants and the capacities in place and some of the new categories established.

Speaker #6: Okay. And just one last thing. Last year, in many ways, there has been a bit of a tumultuous kind of career, where many imponderables kept coming in.

Speaker #6: Many of them are outside your control, in the external environment. Today, as we stand, and armed with some of the acquisitions that we have done, with the plans and the capacities in place, and some of the new categories established, when you look at the 2030 vision that you have spelled out, what are some of the very positive points you carry in your mind?

Rahul Gautam: Yeah.

Himanshu Baid: Yeah.

Bharat C. Shah: When you look at the 2030 vision that you have spelt out.

Rahul Gautam: Yeah

Himanshu Baid: Yeah

Bharat C. Shah: what are some of the very positive points you carry in your mind, and what are still some of the challenges that you visualize?

Speaker #6: And what are still some of the challenges that you visualize?

Rahul Gautam: Bharat, it's a long question. I'll try to answer in a short, limited time. One is, I think on the opportunity side, India happens to be the best opportunity in my view. Now Poly Medicure brand is very well known. Today we are present in almost every corporate hospital in the country or every important hospital. Most important thing will be to deepen that relationship with those hospitals and start working more aggressively in putting more products out there. I think that is number 1 priority. Number 2 will be Europe, where we continue to expand and our business and continue to go as a go-to-market direct strategy. We're currently present only in Italy. We want to go maybe three or four geographies, we want to go direct. That's a very important part of the strategy.

Himanshu Baid: Bharat, it's a long question. I'll try to answer in a short, limited time. One is, I think on the opportunity side, India happens to be the best opportunity in my view. Now Poly Medicure brand is very well known. Today we are present in almost every corporate hospital in the country or every important hospital. Most important thing will be to deepen that relationship with those hospitals and start working more aggressively in putting more products out there. I think that is number 1 priority. Number 2 will be Europe, where we continue to expand and our business and continue to go as a go-to-market direct strategy. We're currently present only in Italy. We want to go maybe three or four geographies, we want to go direct. That's a very important part of the strategy.

Speaker #2: So Bharat, it's a long question, but I'll try to answer in a short, limited time. So one is, I think on the opportunity side, India happens to be the best opportunity in my view.

Speaker #2: Because now the Polymed brand is very well known. Today, we are present in almost every corporate hospital in the country or every important hospital. So the most important thing will be to deepen that relationship with those hospitals and, you know, start working more aggressively and putting more products out there.

Speaker #2: So I think that is number one priority. Number two would be Europe, where we continue to expand our business and continue to go with a go-to-market direct strategy.

Speaker #2: We are currently present only in Italy, so we want to expand to maybe three or four geographies. We want to go direct, so that's a very important part of the strategy.

Rahul Gautam: As we just hired a CEO in Brazil, we'll also put our strategies there to go directly with more new products, the newer range we have today. Currently our distributors only sell our existing products. For new product ranges, they will want to go direct. That is on the product side, market side. Product side, anyway, we are going to launch 25, 30 products a year. That's already in the pipeline, is already happening.

Himanshu Baid: As we just hired a CEO in Brazil, we'll also put our strategies there to go directly with more new products, the newer range we have today. Currently our distributors only sell our existing products. For new product ranges, they will want to go direct. That is on the product side, market side. Product side, anyway, we are going to launch 25, 30 products a year. That's already in the pipeline, is already happening.

Speaker #2: And as we just had a CO in Brazil, so we'll also put a strategy there to go directly with more new products than the usual range we have today.

Speaker #2: So, currently, our distributors only sell our existing products. For new product ranges, if we want to go direct—and so that is on the product side, market side.

Speaker #2: So, on the product side, anyway, we are going to launch 25 to 30 products a year, so that's already in the pipeline; it's already happening. I think the challenge is probably the geopolitical risk, which I see.

Himanshu Baid: I think challenges is probably the geopolitical risk which I see. US, uncertain because every day there is a new situation which is coming up. Middle East, hopefully the war settles down that the markets resume and we are able to resume the flow. Also the logistic costs, which have actually gone up substantially two, three times in the last 6 months. I think they will have to come down for India to remain competitive and export. These are some of the things which come to our mind, Bharatbhai.

Speaker #2: The US is uncertain because every day there is a new situation coming up. In the Middle East, hopefully the war settles down so that the markets can resume and we are able to resume the flow.

Speaker #2: And also the logistic costs, which have actually gone up substantially—two to three times in the last six months. I think they will have to come down for India to remain competitive in exports.

Speaker #2: So these are some of the things which come to our mind, Bharat.

Bharat C. Shah: Sure. Now thank you, Himanshu, and all the very best.

Speaker #6: Sure. No, thank you, Himanshu, and all the very best.

Himanshu Baid: Thank you, Bharatbhai.

Speaker #2: Thank you very much.

Operator: Thank you. Next question come from the line of Deepak with Sundaram Mutual Fund. Please go ahead.

Speaker #6: Thank you. The next question comes from the line of Deepak with Sundaram Mutual Fund. Please go ahead.

[Analyst] (Sundaram Mutual Fund): Yeah. Thank you for the opportunity. Am I audible?

Speaker #5: Yeah. Thank you for the opportunity. Am I audible?

Himanshu Baid: Yeah. Please go ahead.

Speaker #2: Yeah, please. Please go ahead.

[Analyst] (Sundaram Mutual Fund): Yeah. Good afternoon, sir. Congratulations on delivering a resilient set of numbers. I had a couple of questions. First, on the acquisition. Sir, would it be possible to call out, let's say, in euro terms, what was the YOY growth of PendraCare and Citieffe and EBITDA margin for this quarter?

Speaker #5: Yeah, yeah. Good afternoon, sir. Congratulations on delivering a resilient set of numbers. I had a couple of questions. First, on the acquisition—sir, would it be possible to call out, let's say, in euro terms, what was the year-on-year growth of Pentera Care and CTF, and the EBITDA margin for this quarter?

Himanshu Baid: Deepak, I'll have to separately touch base with you on that. I don't recall that number immediately.

Speaker #2: Deepak, I'll have to separately touch base with you on that. I don't recall that number immediately.

[Analyst] (Sundaram Mutual Fund): Okay. Sir, second, if I look at our exports growth, ex of acquisition, in Q1, roughly as per my calculation, we have done somewhere around 10% to 11%. Which denotes that in nine months going into this year, we would have to clock more than 15%. Just wanted to know your thoughts around what will drive this organic export growth in the next nine months, and what's the growth outlook for the renal segment, since in the PPT you mentioned that we are facing some competition due to Chinese dumping.

Speaker #5: Okay. And sir, second, you know, if I look at our exports growth, you know, excluding acquisitions in Q1, roughly as per my calculation, we have done somewhere around 10 to 11 percent, you know, which indicates that in the remaining nine months of this year, we would have to clock more than 15 percent.

Speaker #5: So, just wanted to know your thoughts around what will drive this organic export growth in the next nine months. And what's the growth outlook for the renal segment, since in the PPT you mentioned that we are facing some competition due to Chinese dumping?

Himanshu Baid: On the export front, I think, for us, Europe, again, because we have done some new customer acquisition, that seems to be the growth market for us this year. Southeast Asia is also doing very well. I think these are two markets I'll call out for the moment. US, yes, we are growing, but we don't know what's going to happen if we have 100% tariffs tomorrow or today night, I don't know. It's pretty a fluid situation regarding US. These are two important geographies we'll continue to grow. I think once the situation in Middle East improves, I think we will see probably maybe a more than 20% to 25% growth from Middle East. Currently everything is torn, and all the orders are still lying at port or in factories. I think that is something we are looking at.

Speaker #2: See, on the export front, I think for us, Europe—you know, again, because we have done some new customer acquisitions—that seems to be the growth market for us this year.

Speaker #2: And Southeast Asia is also doing very well. So I think these are two markets I'll call out for the moment. US—yes, we are growing, but we don't know what's going to happen.

Speaker #2: If we have 100 percent tariffs tomorrow, or tonight—I don't know. So, it's a pretty fluid situation regarding the US. But these are the two important geographies where we'll continue to grow.

Speaker #2: And I think once the situation in the Middle East improves, I think we will see probably maybe more than, you know, maybe more than 20 percent, 25 percent growth from the Middle East.

Speaker #2: So, currently, everything is tall, and all the orders are still lying at court or in factories. So, I think that is something we are looking at.

Himanshu Baid: Export growth should happen. There's no reason it should not happen, and we're pretty confident. We have almost 25 new products in pipeline for CE marking, which should come sometime between now and next 3 to 4 months. That will also add to the basket for increasing the basket for export. What was the second question?

Speaker #2: And so, export growth should happen. There is no reason it should not happen, and we are pretty confident. We have almost 25 new products in the pipeline for CE marking, which should come sometime between now and the next three to four months.

Speaker #2: So that will also add to the bucket, or basket, for, you know, increasing the basket for exports. And second question over there.

[Analyst] (Sundaram Mutual Fund): Sir, I asked on renal segment growth outlook.

Speaker #5: Sir, can I ask one question about the renal segment growth outlook?

Himanshu Baid: Pardon me for that. On the renal side, I think we had a de-growth of around 3% in Q1. I think, again, as maybe my earlier comments, you must have heard about government opening an anti-dumping probe because we were pushing the government to look into the pricing which was dumped by Chinese, and most of the Chinese companies are importing into India duty using the ASEAN FTA. I think, even yesterday there was a minister's meeting, and we have also flagged that issue again to the minister, Mr. JP Nadda. With this anti-dumping probe getting evaluated right now, and with the injury margin on 20%, we think that something will happen between now and end of the year. That's number one on that front. Secondly, we have hired Abhinav Hooda, which you must have heard in my opening comments.

Speaker #2: Yeah, pardon me for that. So, on the renal side, I think we had a degrowth of around 3% in the first quarter, but I think, again, as you may have heard from my earlier comment, the government has opened an anti-dumping probe because we were pushing the government to look into the pricing, which was dumped by Chinese companies. Most of the Chinese companies are importing into India at zero duty using the ASEAN FTA.

Speaker #2: So, I think even the day before yesterday, there was a minister's meeting, and we have also flagged that issue again to the minister, Mr. J.P. Nadda.

Speaker #2: And with this anti-dumping probe getting, you know, evaluated right now, and with the injury margin of 20 percent, we think that something will happen between now and the end of the year.

Speaker #2: So that's number one on that front. But secondly, we have hired Abhinav Huda, which you must have heard in my opening comments. He comes from a strong renal background, and probably that will also help us to turn around and, you know, work with distribution partners in the country and outside the country to grow that business.

Himanshu Baid: He comes from a strong renal background, probably that will also help us to turn around and work with distribution partners in the country and outside the country to grow that business. Hopefully by this year-end, we should end with a growth of around 15% to 18% in business, maybe close to 20%, depending on how it goes, but we are pretty confident of this growth in spite of all the challenges we face today.

Speaker #2: So hopefully, this year-end, we should end with growth of around 15 to 18 percent in business, maybe close to 20 percent, depending on how it goes.

Speaker #2: But we are pretty confident of this growth, even in spite of all the challenges we face today.

[Analyst] (Sundaram Mutual Fund): Okay. That's very heartening to hear. Sir, lastly, if I look at our gross margin, this quarter we have reported multi-quarter high gross margin. I understand that you also mentioned that we have taken some price hike, which could have helped us to rake in this sort of gross margin.

Speaker #5: Okay, sir. That's very heartening to hear. And sir, lastly, if I look at our gross margin, you know, this quarter we have reported a multi-quarter high gross margin.

Speaker #5: I understand that you also mentioned that we have taken some price hikes, which could have helped us to achieve this sort of gross margin.

Himanshu Baid: Yeah.

[Analyst] (Sundaram Mutual Fund): Let's say on a steady-state basis, at least in the near term, let's say the nine months of this fiscal year, how should we look at the gross margin? Should it normalize to that 68%, 69%, or will it continue to clock above 70% rate?

Speaker #5: So, let's say, on a steady-state basis—at least in the near term, let's say the next nine months of this fiscal year—how should we look at the gross margin?

Speaker #5: Should it normalize to that 68–69 percent, or will it continue to, you know, clock above the 70 percent rate?

Himanshu Baid: See, basically on standalone basis, we should see between 67% to 69%. This is what we have called out also earlier. Also on the, let's say, consolidated basis, we should see further maybe 200, 300 basis points improvement because PendraCare and Citieffe operate on a higher gross margin. They probably at the end, consolidated numbers look between 71% and 72%, whereas standalone should look between 68%, 69%.

Speaker #2: See, basically, on a standalone basis, we should see between 67% to 69%. This is what we have called out also earlier. And also, on the consolidated basis, we should see further, maybe 200 to 300 basis points improvement because Pantera and CTF operate on a higher gross margin.

Speaker #2: So, they probably, at the end, consolidated numbers should look between 71% and 72%, whereas standalone should look between 60% and 69%.

[Analyst] (Sundaram Mutual Fund): Okay, sir. Very helpful, and all the best.

Speaker #5: Okay, sir. Very helpful, and all the best.

Himanshu Baid: Thank you.

Speaker #2: Thank you.

Operator: Thank you. Next question come from the line of Rashmi Shetty with Dolat Capital. Please go ahead.

Speaker #6: Thank you. Next question comes from the line of Rashmi Shetty with Dolet Capital. Please go ahead.

Rashmi Shetty: Yeah, thanks for the opportunity. Again, on the margin front, on the consolidated level, overall gross margin, you said it is in the range of 71% to 72%. On the consolidated level, our other expenditure and personal cost for this quarter is pretty high. On an annualized basis also, it would be a similar run rate of around 24% of sales in the subsequent quarters.

Speaker #4: Yeah, thanks for the opportunity. So, again on the margin front, at the consolidated level, you know, overall gross margin—you said it is in the range of 71 to 72 percent.

Speaker #4: But on the consolidated level, other expenditure and personnel costs for this quarter are pretty high. So, on an annualized basis also, it would be a similar run rate of around 24 percent of sales in the subsequent quarter.

Rahul Gautam: Rashmi, as you mentioned, our guidance for consolidated EBITDA is between 23% and 25%, and we are maintaining that guidance. As you rightly noticed, the people cost and other expenses are higher in case of our acquisitions. That's reflective of the nature of the business, plus the fact both the businesses are currently scaling up. That's why our consolidated EBITDA margin guidance is lower than our standalone EBITDA margin.

Speaker #2: Yeah. So, Rashmi, as you mentioned, our guidance for consolidated EBITDA is between 23% to 25%, and we are maintaining that guidance. As you rightly noticed, the people cost and other expenses are higher in the case of our acquisition.

Speaker #2: That's reflective of the nature of the business, plus the fact that both businesses are currently scaling up. And that's why our consolidated EBITDA margin guidance is, you know, lower than our standalone EBITDA margin.

Rashmi Shetty: Okay. On sales front, if you just compare organic and inorganic sales for this quarter, inorganic is around INR 73 crores in the export business. What I understand that, given whatever CY25 sales you have given for the acquired companies, if you convert it into the zero INR currency, then we are just integrating, right? We have not seen any major growth in the acquired company that is in the inorganic company's sales. We have not seen the pickup yet. Am I correct on this part?

Speaker #4: Okay. And on the sales front, if you just compare organic and inorganic sales for this quarter, inorganic is around ₹73 crores in the export business.

Speaker #4: So what I understand is that, you know, given whatever CY25 sales you have given for the acquired companies, and if you convert it into, you know, Indian Rupees, then we have not seen—we are just integrating, right?

Speaker #4: We have not seen any major growth in the acquired companies, that is, in the inorganic companies' sales. We have not seen the pickup yet.

Speaker #4: Am I correct on this part?

Rahul Gautam: You have to break it down into two parts. PendraCare and Citieffe are two different entities, both having their own set of growth journey. For PendraCare, as we had highlighted in our last call as well, they had over-indexed exposure to Middle East of about 20-odd percent. That business is actually currently not growing. In fact, it witnessed de-growth over last year as well. Citieffe is growing as per expectation in mid to high single digits and as the synergies kick in, we should be able to increase that further.

Speaker #2: Yeah, so basically, you have to break it down into two parts. Pentera and CTF are two different entities, both having their own set of growth journeys. For Pentera, as we had highlighted in our last quarter as well...

Speaker #2: They had an over-indexed exposure to the Middle East of about 20-odd percent. So that business is actually currently not growing. In fact, it witnessed degrowth over last year as well.

Speaker #2: CTF is growing as per expectation, in mid to high single digits. And, as the synergies are kicking in, we should be able to increase that further.

Rashmi Shetty: In the coming years, what is the kind of growth we are assuming in case if Middle East problems get resolved for FY28 from the acquired companies?

Speaker #4: Okay, so in the coming years, what kind of growth are we assuming in case the Middle East problems get resolved for FY28?

Speaker #4: From the acquired companies.

Rahul Gautam: Yeah. I think on a long-term basis, as we've called out earlier in our acquisition calls as well, these assets on the standalone basis have the ability to grow in high single-digit revenue growth. With the synergies that we want to drive in through product development, cost reduction, as well as through sales channel expansion, we want this to go into the mid-teens as an aspiration basis, assuming the current geopolitical situations resolve itself over the course of next few quarters.

Speaker #2: Yeah. So, I think, on a long-term basis, as you have called out earlier in our acquisition calls as well, these assets on a standalone basis have the ability to grow in high single-digit revenue growth.

Speaker #2: With the synergy that we want to drive in through product development, cost reduction, as well as through sales channel expansion, we want this to go into the mid-teens as an aspiration basis, assuming the current geopolitical situation resolves itself over the course of the next few quarters.

Rashmi Shetty: Okay. Is it better to assume that from next year onwards when the sales pick up and when things get resolved, we will be able to see the overall EBITDA margin, including these acquired companies to expand at least 100 to 150 basis points?

Speaker #4: Okay. So is it better to assume that, you know, from next year onwards, when the sales pick up and when things get resolved, we will be able to see the overall EBITDA margin, you know, including this acquired companies to expand at least 100 to 150 basis points?

Rahul Gautam: We haven't given any guidance like this at the moment. Rashmi, I won't be able to comment. Directionally, as these businesses scale up and the synergy benefits kick in, we expect the margins of these entities to improve, which will reflect in the consolidated EBITDA margins as well.

Speaker #2: We haven't given any guidance like this at the moment. So, Rashmi, I won't be able to comment. But directionally, as these businesses scale up and the synergy benefits kick in, we expect the margins of these entities to improve, which will reflect in the consolidated EBITDA margins as well.

Rashmi Shetty: Okay. Last question, just on the gross debt figure, if you can give that figure and what are the kind of repayments you are expecting this year?

Speaker #4: Okay. And last question—you know, just on the gross debt figure, if you can give that figure, and what are the kind of repayments you are expecting this year?

Speaker #2: Yeah. I mean, Poly Med standalone does not have any debt, other than the working capital debt.

Rahul Gautam: PolyMed standalone does not have any debt other than the working capital debt.

Rashmi Shetty: Yeah. Working capital.

Speaker #4: Yeah, working capital.

Rahul Gautam: Yeah. That amount is about INR 250 crores, which is a revolving credit. On our international subsidiaries, again, PendraCare does not have any long-term loan. For Citieffe, the total loan is about EUR nine million, of which about EUR 1.5 to two million has to be repaid every year.

Speaker #2: Yeah. So, you know, that amount is about ₹250 crores, which is a revolving credit. On our international subsidiaries, you know, again, Pentera does not have any long-term loan.

Speaker #2: For CTF, the total loan is about $9 million, of which about $1.5 to $2 million has to be repaid every year.

Rashmi Shetty: Sorry, how much?

Speaker #4: Sorry, how much?

Rahul Gautam: INR one and a half to two million crores to be repaid every year.

Speaker #2: One and a half to two million euros has to be repaid every year.

Rashmi Shetty: Okay. Thank you. That's it from my side.

Speaker #4: Oh, okay. Thank you. That's it from my side.

Rahul Gautam: Thank you.

Speaker #2: Yeah. Thank you.

Operator: Thank you. Next question come from the line of Siddharth Gangar from CWC. Please go ahead.

Speaker #6: Thank you. Next question comes from the line of Siddharth Niganthi from CWC. Please go ahead.

Siddharth Gangar: Hi. Just a quick follow-up on what you mentioned to Bharat regarding the overall growth aspiration. If I have to look at a 15% growth on the FY26 figure, that gets me to INR 3,000 crore out of a total of what we may have. The remaining will then come from CTF plus PendraCare, plus any new acquisitions that we make. Is that the right way of thinking about that?

Sidharth Negandhi: Hi. Just a quick follow-up on what you mentioned to Bharat regarding the overall growth aspiration. If I have to look at a 15% growth on the FY26 figure, that gets me to INR 3,000 crore out of a total of what we may have. The remaining will then come from CTF plus PendraCare, plus any new acquisitions that we make. Is that the right way of thinking about that?

Speaker #2: Hi. Just a quick follow-up on what you mentioned to Bharatbhai regarding the overall growth aspirations. So, if I have to look at a 15 percent growth on the FY26 figure, right, that gets me to ₹3,000 crores out of a total of what we may have, and the remaining will then come from CTF, plus Pentera, plus any new acquisitions that we make.

Speaker #2: Is that the right way of thinking about that? So, Siddharth, you have to help me—where are you doing the calculation from? If you're looking at standalone numbers only, then you have to also add standalone health into that.

Rahul Gautam: Siddharth, you have to help me. Where are you doing the calculation? If you're looking at standalone numbers only, you have to also add Planett Health into that.

Siddharth Negi: What I'm looking is INR 1,750 crore excluding PendraCare and CTF last year. Right?

Sidharth Negandhi: What I'm looking is INR 1,750 crore excluding PendraCare and CTF last year. Right?

Speaker #2: So what I'm looking at is 1,750 crores, excluding Pentera and CTF last year. Right? Which at 15 percent for four years gets me to about 3,000 crores.

Rahul Gautam: Okay.

Siddharth Negi: Which at 15% for four years gets me to about INR 3,060 crore. Right?

Sidharth Negandhi: Which at 15% for four years gets me to about INR 3,060 crore. Right?

Speaker #2: Right? The overall—sorry, I don't understand, because we have guided for a 2x on an overall basis. I'm saying, overall, if I look at 2x on 1,875, right? That leaves me with a gap of about 690 crores.

Rahul Gautam: Sorry, I don't understand. We've guided for a 2x on overall basis.

Siddharth Negi: I'm saying overall, if I look at 2x on 1,875, that leaves me with a gap of about INR 690 crores. INR 690 crores is essentially PendraCare plus CTF plus any new acquisition. Is that the broad framework that we should keep in mind?

Sidharth Negandhi: I'm saying overall, if I look at 2x on 1,875, that leaves me with a gap of about INR 690 crores. INR 690 crores is essentially PendraCare plus CTF plus any new acquisition. Is that the broad framework that we should keep in mind?

Speaker #2: So, 690 crores is essentially Pentera plus CTF plus any new acquisition. Is that the broad framework that we should keep in mind? You know, I think the Poly Med standalone business will grow faster than the subsidiaries.

Rahul Gautam: I think the PolyMed standalone business will grow faster than the subsidiaries directionally because the European assets are growing at a certain pace. PolyMed has been growing much higher pace. I think the same kind of growth may not be accurate. On a consolidated basis, we are seeing obviously 2x, PolyMed can only grow faster than the underlying subsidiaries.

Speaker #2: You know, directionally, because the European assets are growing at a certain pace, Poly Med has been growing at a much higher pace. So, I think the same kind of growth may not be accurate on a consolidated basis.

Speaker #2: We are seeing, obviously, 2x, but Poly Med standalone will grow faster than, you know, the underlying subsidiaries. Okay, got it, got it. And just a clarification on the RM cost—for this quarter, the reason we have the kind of gross margins we do is more due to the inventory that we were carrying, plus the price hikes we took.

Siddharth Negi: Okay, got it. Just a clarification on the RM cost. This quarter, the reason we have the kind of gross margins we do is more due to the inventory that we were carrying plus the price hikes we took. Therefore, should one expect some impact in Q2 or that's not really the case?

Sidharth Negandhi: Okay, got it. Just a clarification on the RM cost. This quarter, the reason we have the kind of gross margins we do is more due to the inventory that we were carrying plus the price hikes we took. Therefore, should one expect some impact in Q2 or that's not really the case?

Speaker #2: And therefore, should one expect some impact in Q2, or is that not really the case? You know, I think it is a mix of multiple things.

Rahul Gautam: No, I think it is a mix of multiple things, includes price hikes, product mix, as well as the inventory sort of gains. As Himanshu mentioned earlier part of the call, we are guiding for more like a 68% to 69% gross margin based on a standalone basis. Obviously, that would mean that there could be some correction to what we have reported in Q1 as gross margin.

Speaker #2: Includes price hikes, product mix, as well as the inventory sort of gains. And as Imran mentioned earlier, part of the call, you know, we are guiding for more like a 60% to 69% gross margin based on a standalone basis.

Speaker #2: So you know, obviously, that would mean that, you know, there could be some correction to what we have reported in Q1 as gross margin.

Siddharth Negi: Clear. Thank you.

Sidharth Negandhi: Clear. Thank you.

Speaker #2: Clear. Thank you. But overall, EBITDA may remain the same, depending on the higher revenue which you projected for the coming quarters. Very clear, Imanju.

Himanshu Baid: Overall, EBITDA may remain the same depending because of the higher revenue which is projected for coming quarters.

Siddharth Negi: Very clear, Himanshu. Very clear. Thank you.

Sidharth Negandhi: Very clear, Himanshu. Very clear. Thank you.

Speaker #2: Very clear. Thank you.

Operator: Thank you. Our next question comes from the line of Bhavana with NEG Analytics. Please go ahead.

Speaker #6: Thank you. Anish, the next question comes from the line of Bhavna with NEG Analytics. Please go ahead.

[Analyst] (NEG Analytics): Hi. I wanted to know what is the tariff impact from the US you're estimating for FY27?

Speaker #4: Hi. I wanted to know, what is the tariff impact from the US that you’re estimating for financial year 2027?

Rahul Gautam: Just a second, please.

Speaker #2: Just a second. See, US tariff in FY27?

Himanshu Baid: See, US tariff in FY27?

Rashmi Shetty: Yes.

Speaker #4: Yes.

Himanshu Baid: Currently, the duty is only 10%. If it remains where it is today, I think we still have a good pathway, but if any changes happen, it may impact us.

Speaker #2: So, currently, the duty is only 10 percent. So, if it prevails where it is today, then I think we still have a good pathway.

Speaker #2: But if any changes happen, then it may impact the business.

Rashmi Shetty: All right. Thank you.

Himanshu Baid: US exposure is not very big. This year also, our exports to US will be close to between $three and a half to four million. It should not be a big issue today, if anything happens in the US.

Speaker #4: All right. Thank you.

Speaker #2: US exposure is not very big. This year also, you know, our exports to the US will be close to between 3.5 and 4 million.

Speaker #2: So it should not be a big issue today, you know, if anything happens in the US.

Rashmi Shetty: All right. Thank you.

Speaker #4: All right. Thank you.

Operator: Thank you. Our next question comes from the line of Bhavya Kante with Bajaj Alternative Investment Management Limited. Please go ahead.

Speaker #6: Thank you. Anish, the next question comes from Bhavya Gandhi with Bajaj Alternate Investment Management Limited. Please go ahead.

Bhavya Kante: Hi, thanks for the follow-up. Sir, if you were to break up the overall employee expenses and other expenses, how much portion of that would be fixed and how much would be variable as a percentage of sales? We have around 24% as a percentage of sales coming from employee expenses and other expenses also closer to 24%. If you can just help us. Yeah.

Bhavya Gandhi: Hi, thanks for the follow-up. Sir, if you were to break up the overall employee expenses and other expenses, how much portion of that would be fixed and how much would be variable as a percentage of sales? We have around 24% as a percentage of sales coming from employee expenses and other expenses also closer to 24%. If you can just help us. Yeah.

Speaker #5: Hi, thanks for the follow-up. Sir, if we were to break up the overall employee expenses and other expenses, how much portion of that would be fixed and how much would be variable as a percentage of sales?

Speaker #5: We have around 24% of sales coming from employee expenses, and other expenses are also closer to 24%. So, if you can just help us...

Rahul Gautam: We don't have that breakup. Unfortunately, we won't be able to give you an answer right now on this.

Speaker #5: Yeah.

Speaker #2: We don't break up, unfortunately. We won't be able to give you an answer right now on this.

Abhaya Gandhi: Okay. Just, I wanted to understand how much is the operating leverage, which can still play out on a longer-term basis, not just one, two quarter or one or two years. Just wanted to understand on a very long-term basis, on a three to four year basis, how much could be the operating leverage that can play out?

Bhavya Gandhi: Okay. Just, I wanted to understand how much is the operating leverage, which can still play out on a longer-term basis, not just one, two quarter or one or two years. Just wanted to understand on a very long-term basis, on a three to four year basis, how much could be the operating leverage that can play out?

Speaker #5: Okay, I just wanted to understand how much operating leverage can still play out on a longer-term basis, not just over one or two quarters or one or two years.

Speaker #5: Just wanted to understand on a very long-term basis on a three to four-year basis, how much could be the operating leverage that can play out.

Rahul Gautam: Yeah. As you understand, we are a manufacturing company, so we have a lot of blue-collar workers who are involved in production. That's also a very reasonable part of our total employee cost, which you see on a consolidated basis. That piece remains as variable. The rest all is fixed, obviously subject to productivity gains. Within the staff also, there is a fixed portion plus a variable portion subject to performance. It's a mix of things. It's tough to give a very ballpark number right now on the call.

Speaker #2: Yeah. I mean, as you understand, we are a manufacturing company. So we have a lot of blue-collar workers who are involved in production. And that's also a very, very reasonable part of our total employee cost, which you see on a consolidated basis.

Speaker #2: That piece remains as variable. The rest is all fixed, obviously subject to productivity gains. But, you know, within the staff also, there is a fixed portion plus a variable portion subject to performance.

Speaker #2: So, you know, it's a mix of things, so it's tough to give a very ballpark number right now on the call.

Abhaya Gandhi: Okay, sure. We'll take it offline. Thank you.

Bhavya Gandhi: Okay, sure. We'll take it offline. Thank you.

Speaker #5: Okay, sure, sure. We'll take it offline. Thank you.

Operator: Thank you. Our next question comes from the line of Girish Jain with KJMC Capital. Please go ahead.

Speaker #6: Thank you. Anish, we have a question from the line of Girishan with KJMC Capital. Please go ahead.

Girish Jain: Yeah. Hi, am I audible?

Speaker #5: Yeah. Hi. Am I okay with it?

Himanshu Baid: Yes, Girish. Please go ahead.

Speaker #2: Yes. Please go ahead.

Girish Jain: Thank you for giving me the opportunity. Himanshu, you in the beginning outlined Strategy 3.0 Vision 2030. That was very helpful. As you mentioned, we are planning to double the revenue by 2030 by both organic as well as inorganic means. Given the fact that we are now transitioning, or we have already transitioned from being product-focused to being therapy-focused, if my understanding is correct. Are we looking to enter any new therapies, or we want to expand within the given therapies which we are already operating in?

Speaker #5: Yeah. Thank you for giving me the opportunity. Imanju, you in the beginning outlined strategy 3.4 Vision 2030. That was very helpful. And as you mentioned, we are planning to double the revenue by 2030 by both organic as well as inorganic means.

Speaker #5: Given the fact that we are now transitioning or we have already transitioned from being product-focused to being therapy-focused, it's my understanding is correct. Are we looking to enter any new therapies or do you want to expand within the given therapies which we are already operating in?

Himanshu Baid: Girish, I'll answer it straight away. See, currently we have just started these therapies. It was just started, maybe some were started last year or some year before that. These are very new. If you remember historically, our infusion business is a 30-year-old business. It takes time to mature any therapy, and there are a lot of regulatory roadblocks, which prohibit you from even moving out of the country because these are mostly critical devices, class 3 devices. It takes much longer to register most of these products. Sometimes it takes around 2, 3 years to register products and do clinical trials. I think we have enough on our plate right now with our existing businesses, and I don't think we'll be ready to launch anything new substantially in the next few years.

Speaker #2: So, Girish, I'll answer it straight away. See, currently, we have just started these therapies. You know, it was just started—maybe someone started last year or some year before that.

Speaker #2: So these are very, very new. If you remember, historically, our infusion business is a 30-year-old business. So it takes time to mature any therapy, and there are a lot of regulatory roadblocks.

Speaker #2: You know, we're prohibited from even moving out of the country, you know, because these are mostly critical devices—class 3 devices. It takes much, much longer to register most of these products.

Speaker #2: Sometimes it takes around two, three years to register a product and do clinical trials. So I think we have enough on our plate right now with the existing businesses.

Speaker #2: And I don't think, you know, we'll be ready to launch anything new, substantially, in the next few years.

Girish Jain: Given the existing therapies which we have present, would it be safe to assume that we cover almost 60% and 65% of the consumables used in the hospital?

Speaker #5: And given the existing therapies which we are present in, would it be safe to assume that we cover almost 60–65% of the consumables used in the hospitals?

Himanshu Baid: I don't think so, Girish. The market is very huge today. If you look at consumable market, there are many other therapies like peripheral vascular, neurology, urology. There are so many other therapies which, let's say, endosurgery. There are many therapies which we don't cover, gastroenterology. There are many big therapies we are not covering today. A lot of potential across different verticals. But again, it will take time to build a portfolio of products. But as we move along, I think next few years, definitely there is some work happening in the pipe, but I cannot disclose what we are going to do in next to three years on this call, basically. It's impossible.

Speaker #2: I don't think so, Girish. The market is very used today. If you look at consumables market, you know, there are many other therapies like peripheral vascular, neurology, you know, urology, you know, there are so many other therapies which, you know, let's say endosurgery, there are many, many therapies which we don't cover, you know, gastroenterology.

Speaker #2: So there are many deep therapies we are not covering today, so a lot of potential across different verticals. But again, it will take time to build up the portfolio of products.

Speaker #2: But as we move along, I think in the next few years, definitely there is some work happening in the pipeline. But I cannot disclose what we are going to do in the next two to three years on this call, basically.

Speaker #2: It's impossible.

Girish Jain: Right. I think you mentioned sometimes that you are seeing some bounce back in the Europe business, probably because of the inventory normalization. Could you comment on that and also give some idea of the working capital cycle? Have we seen any improvement in that?

Speaker #5: Right. And I think you mentioned sometimes that we are seeing some bounce back in the oral business, probably because of the inventory normalization. Could you comment on that and also give some idea of the working capital cycle? Have we seen any improvement in that?

Himanshu Baid: On the Europe side, we have already seen a growth of around 17% in Q1 compared to the previous year. I think the demand has come back. Also we have added some new customers. There are some customer acquisitions also. I think Europe seems to be in a pretty safe and good place. We are back with the growth in European market. On the working capital cycle, I think the cash conversion is still in the same level. In March it was 140 days. Currently, it's also a similar range of 140 days.

Speaker #2: So, on the Europe side, we have already seen a growth of around 17% in Q1 compared to the previous year. So, I think the demand has come back.

Speaker #2: Also, we have added some new customers. There have been some customer acquisitions as well. So, I think Europe seems to have been a pretty safe and good place.

Speaker #2: So, we are back with the growth in Europe and the market. But on the working capital cycle, I think the cash conversion is still at the same level.

Speaker #2: In March, it was 140 days. Currently, it's also in a similar range of 140 days.

Girish Jain: Okay. Do we expect that to improve going forward?

Speaker #5: Okay. And do we expect that to improve going forward?

Himanshu Baid: Sorry, Girish, can you repeat that again, please?

Speaker #2: Sorry, Girish, can you repeat that again, please?

Girish Jain: Do we expect that to improve going forward, the cash conversion cycle?

Speaker #5: Do we expect that to improve going forward, the cash conversion cycle?

Himanshu Baid: I think it depends, but I would say is that currently we should read it like this, but hopefully, maybe as time progresses and global situation normalizes, I think we may see some improvements. Because of high oil prices also, most of the export markets are a little choppy because of hard currency are not available in time in many markets where we operate. Now as probably oil prices stabilize, things will change and improve. Hopefully, the cycle should improve, but I don't have a definitive answer today, but hopefully it will improve.

Speaker #2: I think it depends, but I would suggest that currently we should read it like this. Hopefully, as time progresses and the global situation normalizes, I think we may see some improvements.

Speaker #2: Because of high oil prices, and also, you know, most of the export markets are a little choppy because of, you know, hard currency not being available in time in many markets where we operate.

Speaker #2: But now, as prices probably stabilize—oil prices stabilize—things will change and improve. So hopefully, you know, the cycle should improve. But I don't have any definitive answer today.

Speaker #2: But hopefully, it will improve.

Rahul Gautam: Girish, if I could just add to what Himanshu said. Given the current geopolitical situation and the war going on, the time for getting the product to the customer has also increased, which does tend to put pressure on recovery cycles because you can start getting your cash flows only once the product reaches, right? Given that situation, it's tough to give a forward-looking guidance on this at this point in time.

Speaker #3: And Girish, if I could just add to what Imanju said—you know, given the current geopolitical situation and the war going on, the time for getting the products to the customer has also increased.

Speaker #3: Which does tend to put pressure on, you know, recovery cycles because, you know, you can start getting your cash flows only once the product is released, right?

Speaker #3: So, given that situation, it's tough to give a forward-looking guidance on this at this point in time.

Girish Jain: Understood. Thank you and all the best.

Speaker #2: Understood. Thank you,

Speaker #5: Imanju.

Himanshu Baid: Thank you. Thank you a lot, Girish.

Speaker #2: Thank you. Thank you, Girish.

Operator: Thank you. Next question come from the line of Pramod Bhatt, an individual investor. Please go ahead.

Speaker #6: Thank you. Next question comes from the line of Pramod Bhatt, an individual investor. Please go ahead.

Pramod Bhatt: Yeah. Thanks for the opportunity. I just have one question. From the portfolio, I see that most of the products are the existing products with some other MedTech companies. Like, we don't produce something new. Do you have anything in plan that you are making something entirely new, which is not currently existing with other MedTech providers?

Speaker #5: Yeah, thanks for the opportunity. I just have one question. From the portfolio, I see that most of the products are existing products with some other MedTech companies.

Speaker #5: Like, we don't produce something new. Do you have anything planned, you know, where you are making something entirely new which does not currently exist with other MedTech providers?

Himanshu Baid: Basically if you see, PolyMed has 399 patents, and I think we have also disclosed that in the presentation we put out. PolyMed has a lot of products which have breakthrough technology. I don't know who we are comparing with. A lot of companies do copy our products. PolyMed is a market leader in infusion therapy and a lot of other therapies we operate on. There's a reason we are able to make that kind of margin, which other companies don't make. This industry basically works on two different parameters. One is a product performance where we have a global leadership there. Our products are going to 125 countries because this is based on performance, nothing works on price. Second is ability to add innovation, innovative ideas on the existing product.

Speaker #2: See, basically, if you see, PolyMed has 399 patents, and I think we have also disclosed that in the presentation we put out. So, PolyMed has a lot of products which are breakthrough technology.

Speaker #2: I don't know who we are comparing with. A lot of companies do copy our product. PolyMed is a market leader in infusion therapy, and a lot of other therapies we operate in.

Speaker #2: And there's a reason we are able to make that kind of margin, which other companies don't make. So, this industry basically works on two different parameters.

Speaker #2: One is our product performance, where we have global leadership. Our products are going to 125 countries because this is based on performance.

Speaker #2: Nothing works on price. And second is the ability to add innovation—innovative ideas to the existing product. The products may look similar when you look from a catalog perspective.

Himanshu Baid: The product may look similar when you look from a catalog perspective, when you use them or when a user sees, basically which is a clinician or a doctor, they will see the differentiation in the product.

Speaker #2: But when you use them, or when a user sees—basically, which is a clinician or a doctor—they will see the differentiation in the product.

Pramod Bhatt: Okay. Thank you. Those patents are worldwide patents, right?

Speaker #5: Okay, thank you. So those patents are worldwide patents, right?

Speaker #2: Yes. Sorry, sir, can you please repeat that again, sir?

Himanshu Baid: Sorry, sir. Can you repeat again, sir?

Pramod Bhatt: Means the coverage of those patents is not some region basis, right? It is a global patent.

Speaker #5: Yes, sir. The coverage of those patents, it's not on some regional basis, right? It is a global patent.

Himanshu Baid: Sir, the patents are global patents.

Speaker #2: So the patents are patents. Patents are global patents.

Pramod Bhatt: Okay. Thank you.

Speaker #5: Okay. Okay. Thank you.

Himanshu Baid: Thank you, sir.

Speaker #2: Thank you, sir.

Operator: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Girish Jain with KJMC Capital. Please go ahead.

Speaker #6: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star, then one. Our next question comes from the line of Girish Jan with KJMC Capital.

Speaker #6: Please go ahead.

Girish Jain: Yeah, thank you. Just quickly I have one question. Himanshu, did you mention about the new facilities you are getting operationalized, I think one you mentioned was in Noida, the other one I think was in Gujarat. Any timeline?

Speaker #5: Yeah, thank you. I just wanted to add one question. Imanju, you mentioned about the new facilities in operationalization. You mentioned it was in Noida and—.

Speaker #5: Any timelines?

Himanshu Baid: I'm not able to hear very clearly. Can you please repeat the question? Maybe you're on a speaker phone, so I'm not able to understand very clearly.

Speaker #2: I'm not able to hear very clearly. Can you please repeat the question? Maybe you're on speakerphone. I'm not able to understand very clearly.

Girish Jain: Okay. Can you hear me now?

Speaker #5: Okay. Can you hear me now?

Himanshu Baid: Yeah, much better, sir.

Speaker #2: Yeah. Much better, sir.

Girish Jain: Yeah, I was mentioning that during the call you mentioned about two new facilities coming online in the future.

Speaker #5: Yeah, I was mentioning that during the call, you spoke about two new facilities coming online in the future—one at Noida and the other at another location.

Himanshu Baid: Yes, sir.

Girish Jain: One is at Noida and the other one at another place.

Himanshu Baid: Yeah.

Girish Jain: Could you give us a timeline when are they expected to become operationalized and which particular therapy, if we have decided which therapy they'll be focusing on?

Speaker #5: Could you give us a timeline for when they are expected to become operationalized, and which particular therapy—if we have decided—will they be focusing on?

Himanshu Baid: Basically, the one coming up in Faridabad, Palwal area would be basically focusing on orthopedic and transfusion business, which we are expanding right now. Then some part of extra capacity expansion of infusion will also go there. Talking about Noida we are already planning to expand our cardio business basically out of the Noida facility.

Speaker #2: So basically, the one coming up in the Faizabad-Palwal area would be focusing on orthopedics and the transfusion business, which we are expanding right now.

Speaker #2: And some part of the extra capacity expansion for infusion will also go there. And talking about Noida, the cardio business is basically all over the Noida facility.

Girish Jain: Will they come online in this financial year?

Speaker #5: And will they come online in this financial year?

Himanshu Baid: The Faridabad-Palwal facility should come online by March 2027, most probably. That's the timeline we are looking at. Q1 of next year. The Noida facility will come live in maybe commercially Q1 of FY28.

Speaker #2: So the Faizabad Palwal facility should come online by March 27th, most probably. That's the timeline we are looking at—so, first quarter of next year.

Speaker #2: And the Noida facility will come live in quarter one, maybe commercially in Q1 of FY28.

Girish Jain: Okay. Thank you. All the best.

Speaker #5: Okay, thank you. All the best.

Himanshu Baid: Yeah.

Operator: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you. Anubhav to you team.

Speaker #6: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing remarks.

Speaker #6: Thank you, Anu, and to your team.

Himanshu Baid: Yeah. I think, thank you, everyone, and thank you for all your questions, and I think, hope we are good to answer them. Let me assure you again to all the investors that the company is on a growth path. We have made systemic changes in the portfolio. Our overdependence, which was there in the vascular segment, now is now only 50%. There's a lot of diversification that happened. We have moved more from a low-medium technology to high-technology business, and I think that is where we are shaping up. Also, we are adding more electronics in the business where our dialysis machine, our IV therapy is run on machine. I think we are diversifying into higher category of business, where they are more platforms than products itself. That's the change we are bringing in the portfolio.

Speaker #2: Yeah. I think thank you, everyone. And thank you for all your questions and I think hope we are able to answer them. And let me assure you again, to all the investors, that the company is on a growth path.

Speaker #2: We have made systemic changes in the portfolio. Our over-dependence, which was there in the vascular segment, is now only 50 percent. So there's a lot of diversification which has happened.

Speaker #2: And we have moved more from a low- to medium-technology to a high-technology business, and I think that is where we are shaping up. Also, we are adding more electronics in the business, where a dialysis machine—our IVL therapy—is run on machines.

Speaker #2: So, I think we are diversifying into a higher category of business, where there are more platforms than products themselves. So that's the change we are bringing in the portfolio.

Himanshu Baid: That's why we see a growth. Most of the newer products we're developing today are import substitution products, and definitely that will help us to take more market share as insurance penetrates deeper into the hospital sector, as one product penetrates deeper into the hospital sector in India. I think that will change the landscape, where hospitals will look at more quality-oriented, cost-effective devices versus imported devices which we're using today, which are more expensive. These are the changes we see in the industry. Thankfully, this industry continues to grow at a good pace in India, the healthcare industry. I think as that industry grows, medical devices industry, medical technology industry, as one of the partners of industry, will grow in the same pace or even higher. Thank you again for your time, and look forward to talk to you soon.

Speaker #2: And that's why we see a growth. Most of the newer products we are developing today are import substitution products. And definitely, that will help us to take more market share as insurance penetrates deeper into the hospital sector, and Ayushman Bharat penetrates deeper into the hospital sector in India.

Speaker #2: I think that will change the landscape, where hospitals will look at more quality-oriented, cost-effective devices versus imported devices, which we are using today and which are more expensive.

Speaker #2: So these are the changes we see in the industry. Thankfully, this industry continues to grow at a good pace in India—the healthcare industry.

Speaker #2: And I think as that industry grows—the medical devices industry, the medical technology industry—will, as one of the partners of the industry, grow at the same pace or even higher.

Speaker #2: Thank you again for your time, and I look forward to talking to you soon.

Operator: Thank you so much, sir. Ladies and gentlemen, on behalf of Poly Medicure Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your line.

Speaker #6: Thank you so much, sir. Ladies and gentlemen, on behalf of Poly Medicure Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your line.

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Q1 2027 Poly Medicure Ltd Earnings Call

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