Poly Medicure Limited ($531768)

Ladies and gentlemen, good day, and welcome to the Poly Medicure Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Today on this call, we have with us from the senior management team of the company, represented by Mr. Himan Subin, the Managing Director; Mr. Naresh Vijayvargiya, CFO, Mr. Rahul Gautam, President, Strategy and Corporate Development. I would now like to hand the conference over to Mr. Himanshu be. Thank you, and over to you, sir.

Thank you very much. Good evening, everyone. I welcome you all to our Q4 and full year FY '26 earnings call. I sincerely thank you all for being here today. last financial year, '25, '26 was a year of deliberate transition, funded upgrade from our business model towards high technology, high complexity, high growth segments here in which we chose to invest a difficult external environment than rated out. We invested in high-technology verticals, build out clinical and R&D teams and despite general headwinds, we delivered every commitment in Maydon quarter 3 call. So PolyMet is currently under strategic transition where we intend to become a globally recognized brand in high-end medical devices over the next 5 years. FY '26 just initiation in that journey. In FY '27 will consolidate initiatives that we have undertaken, drive synergies across the group and continued investments in higher and high-end technology segments. Let me share how we intend to leverage Pengana and CDC over the next 2 years, the companies we acquired last year. and integration work is fully underway. On the cost side, to procurement and manufacturing processes, outsourcing reset savings. So we are working on those areas aggressively. On the revenue side, we'll be cross-selling board directions. India will arise these products. We are waiting for registrations to come through. It takes between 6 to 9 months to get import registrations. And we have also started leveraging Polymer's distribution network globally for this product. And I think as time progresses, you'll see a lot of work happening there. Internationally, we are using our global presence to widen the reach in your markets, and that's already happening as we speak. On the R&D front, our teams are collaborating for new products. We are already working on a lot of new devices. The RNA team there in Europe and in India is working simultaneously to fast rate a lot of projects which were stuck earlier. So a lot of work happening there. All these initiatives are already undertaken, and I expect that post recovery and all the necessary regulatory approvals will start -- they'll start to reflect on the performance of FY '27. Before the numbers, I would like to update on your expansion of our global footprint in a new geography with an acquisition of Marine in Brazil, a medical device company in Brazil being -- Brazil being the largest medical device market in South America cost around INR 13 billion to INR 15 billion is a gateway to the LatAm region. Marina comes with mVisa and import licenses which Patriot enter into the market where approvals actually take years together. Brazil is a very important market for Payment with a strong brand recall and this is a step in the direction, ensuring long-term success of our business in that region. So we're in the process of hiring people there, building a team, clinical team, sales team directly in the market. And as we had opened our own subsidiary volume in Brazil last year, I think this is a continuation of that strategy that now we have a fully operating company with all the licenses needed to start going directly in that market. Each of these initiatives is already in motion, in 1 or 2 years, we'll get these 3 businesses into a single global platform for growth. So we're already working in that direction. Some key business updates. We've launched close to 35 new products across the group in FY '26. Of course, that also includes some products which came through acquisition. On a stand-alone basis, we have added around 20 products last year. On the dealer platform, we have raised around 450 rises machines last year, taking into base to approximately 1,000 machines. On cardiology, now we deployed close to around 11,000 tens. -- clinical registries were now 650 patients. And I think by end of the year, we'll complete the entire enrollment of 2,000 patient pools in India and outside India. U.S. business is picking up momentum with the conversation on multiple projects with customers, again, getting active. I think due to the scenario which was created last year, especially because of tariffs, I think we had a setback, but now I think we are on track. And I think we're also getting some new products FDA approved some pipeline right now. So I think pretty positive about the U.S. development. And I think we have taken a 1 year set back on this business, but I think now we are back on track. And I think a lot of new opportunities are coming up from the U.S. after the change in scenario. Let me share the financial performance. Let me start with standalone performance. On a full year basis, the standard revenue was around INR 1,662 crores. which was up by around 4% compared to previous year. So that last year was a tough year for us, especially on the export front. The low growth in Saudi is due to external environment, again, mainly impacted from a tractor revenue. Gross margin -- the gross margin expanded by around 128 with and was up to around 68% from last year's 66.8% or something like that. And on the profitability, we had guided a canton EBITDA in the range of 25% to 27%. We have delivered close to 26.8% at the higher end of the range and stand-alone EBITDA was INR 446 crores. Channel revenue for the quarter 4 was INR 43 crores up 5.2% year-on-year, 6% sequentially, it was highest ever stand-alone quarter, with Q4 gross profit of around INR 295 crores, EBITDA of INR 121 crores, with a healthy margin of 27.3%. And -- so as you can see, there's been a constant improvement. So when we started the year, we were at around INR 382 crores for the quarter revenue. Standalone now we have moved to almost close to of INR 443 crores. So it's a steady increase. Every sequential year is increasing the stand-alone business. Now on the consolidated picture, full year consolidated revenue grew by 12.3% to INR 1,875 crore, domestic business were up 20%. International was about 9% year-on-year. Of course, that includes addition from our acquisitions at the gross level. And of course, these were not full year revenue. These 1 acquisition happened in September, 1 in November. So in FY '27, we'll see a full impact of the revenue. On the Q3 call, if you recall, I committed that H2 will be about 20% above H1, and we have exactly delivered that. So growth has been from INR 847 crores to INR 1,049 crores, an increasement of around 21%. Q4 console revenue was INR 534 crores. up strong, around 21% year-on-year with a gross profit of INR 356 crores and 66.7% margin. The growth in the quarter was broadly based on domestic growth of around 25% in national business around 19% and Q4 consolidated EBITDA were INR 112 crores, a little lower than the sale number because there was an impact of consolidation of low-margin acquisitions and about INR 9 crore onetime regulatory and cost provisions in 1 of our international subsidiaries. Other important points of aliashift in our revenue mix in Q4 '26 infusions that have been now account for 50% of the revenue, down from 57% in Q4 '25 between around 11% steadily rising share coming from cardiological care and other acquisitions. In other words, our higher technology segments are now contributing to over 50% of our revenue and I expect this proportion to keep on improving in coming years. And that is also 1 of the reasons that the gross margin has started looking upwards. On the balance sheet, the equity remains strong and consolidated cash of around INR 8.2 crores, this amount is a strategic reserve for our strategic initiatives in future, and we intend to use operating cash flows to meet trader CapEx requirements across the group. For FY '26, the CapEx was around INR 296 crores. into our plant in Riga, Fidea, Metro and also in the era Medical Park. Current year, I'll give share the numbers slightly later. Let me give you the forward-looking guidance. Again, there has been, of course, a huge shift in the external environment. We have seen the current assumption cause by Gulf war and I think the situation is quite challenging. But let me manage -- tell you that we are managing every piece and working a lot of initiatives inside the organization. I think West Asia, I just want to call it out, has around 6% to 8% of our revenue comes from there. And though the demand seems to be quite entire. We don't see any drop in demand. I think it's a logistic nightmare right now. And I think there's which are causing some disruption in shipping products out of India. But I think from the demand side, I think it's pretty much intact. And we have pending orders, which we need to execute, but we are still waiting for supply chain and shipping routes to improve and have better pricing. There has been an impact on raw materials because in plastic packaging materials all across because most of them are crude linked. And we see there was an impact of around 20% on an aggregate basis in raw materials and a meaningful headwind to the gross margin. But just let me tell you 1 thing that your company was maintaining debate stocks, almost inventory was close to 2.5 to 3 months. And because of that, we didn't see too much of an impact in quarter 1. So far, we've been able to minimize it. and we are taking more sells to minimize this risk. And I think if the crude price is, the current business plan, we have looked at has been made on crude levels of around $100 and I think $100 to $110 but I think in time to come, crude prices will definitely open up. So I think this headwind will kind of go down a little bit. But let me tell you that the fat cost or minimum wage evasion in Ariana has caused the disruption, but we are able to get our price increase from customers between range of 3% to 5% already. And also, currency, which has moved rupee is currently depreciated against all major currencies and companies 60% to 70% business is international export driven on a stand-alone basis. So there we are able to recover some costs back overall. So on the current situation based on where we are today as on today, we may see some erosion on gross margin going from, let's say, 68% to maybe around 66% or maybe in that region, maybe lower by INR 210. But this is just a present estimation. And I think if the cruise prices soften up, let's say, in the next, let's say, a few months, I think then this impact can also be minimized, but also to minimize this risk -- we are already working a lot of cost-saving projects looking at alternate supplies sources. A lot of raw maters that we are importing, we are trying to buy for media sources. -- lot of parts and components, which are coming from the third countries, we are also trying to make them in-house. We are working a lot. We are also seeing some savings through our Gamma plant, which established this year is hopefully operational. So a lot of savings optimization projects are already happening inside the organization. So hopefully, by the end of the year, we may see this impact to be very, very negligible, not even this INR 200, INR 300. But I just want to -- based on the current situation, I think we see today where we are. But going forward, it may further reduce. I think that's what we are looking at. I just want to give you a revenue guidance for FY '27. On a consol basis, we are guiding a revenue of INR 2,000 crores to INR 2,400 crores, up from INR 1,875 crores done in FY '26, which will include full year consolidation of Pendants -- on talon basis, we are guiding on a revenue of INR 1,900 crores to INR 1950 crores with domestic business growing upwards of 20% and international present growing upwards 15%. So this is our guidance for the full year of FY '27, stand-alone INR 1,900 to INR 1950 and -- on consol basis between INR 2,300 to INR 2,400. Stand-alone EBITDA margin is expected to be -- again, we are giving a guidance of 25% to 27% range. Of course, this year, last year, FY '26 was the same range we have given. We should be able to almost cover the same thing. On a consolidated basis, EBITDA margin because our subsidiaries operate a lower EBITDA margin right now, and we are in the phase of doing a lot of cost saving projects there. So we expect this year consolidated EBITDA to be between 23% and 25%, but salon will be between 25% and 27%. We expect to spend between INR 200 crores to INR 225 crores on CapEx this year. This is a guidance. This is lower than last year. Last year was INR 296 this year, as most of these projects are getting ready, the plants are getting operational. So the CapEx requirement will be a little lower ports, we are pushing more on automation right now so that at least we can mitigate some wage revisions, which has happened in a higher wage salary cost. In summary, I think we have delivered every Q3 commitment we made to 20% of H1, stamina the higher range of the higher end of the range. around 4 billion machine placement done in the year. So -- and almost 35 new products launched in FY '26. I think we have a clear domestic import subscription strategy an international strategy accelerating in U.S., Europe and with a prudent entry into Brazil. I can genuinely tell you that business is now adequately positioned for growth ahead as you can see already, the plan is to move from INR 1,875 to INR 2,300 crore to INR 2,400 crores is a substantial what we are planning this year. So again, I want to assure all of you that we are on the right track. We've been able to preserve margins. We are able to preserve growth in the organization. In spite of all the headwinds and challenging situation, we are still guiding higher so that -- because today, the demand is coming back, what we had lost earlier in the last year, and also Indian market, I think we can see our presence in all -- most of the corporate chains, larger hospitals and even in standalone hospitals. And I think that business is also going to grow in a higher percentage level. So thank you again for your trust and time. I'll now hand over to the operator, and we'll be happy to take your questions. Thanks again.

Thank you very much. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Satani from CWC.

Three questions from my end. If you could give us some details on the Brazil acquisition in terms of the categories, the target operates in, what is the revenue and what's the acquisition cost like that you've paid? And on the current acquisitions that were made GTF and Pentracare, is it fair to assume that most of the sales, which you highlighted broadly about INR 65 crores this quarter are in itself? Or is there an EU and RW sort of split there? If you could give us that and accordingly to understand what the organic performance on EU and RWAs. And on your guidance of 15% to 17% stand-alone growth, could you give us a sense of how would that pan out domestically versus for exports and for the core infusion therapy versus the new therapies?

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

And on the other 2 companies, yes, PendraCare and CBRE have almost 50% sales in Europe and 50% and rest of world. has also a business in North America, in U.S. and Mexico, which is around 35%, 40% of the business right now. and 50% is in Europe. Pender Care has Mearibusiness in Europe and then in some business in Middle East and Latin America. And on the Indian business, on the in stand-alone business. Basically, we are seeing domestic business will grow around 20%. That's what I've guided again. And international business will grow around 15% or so. So we're anticipating stand-alone business to grow to around INR 1,900 crores to INR 1,950 crores from our current base of around INR 1,652 crores.

Got it. Just a follow-up on that, given how that's panned out. In terms of the headwinds that you saw this year in Europe, how are you the situation on ground now? And when do you expect, at what point in time in FY '27 or whenever do you expect this to normalize?

I think headwinds I would say that we have bounced back in Europe. That's what I can tell you right now. we have added quite a few customers in Europe. And also the existing customers where we had an over inventory situation and we had a little slowdown in demand. I think that has come back and currently, last 3, 4 months, we are seeing a good uptake. And I think the pipeline is also very, very strong in Europe. So I think overall, we are very positive about the current business in Europe what we are doing from polymer Solaron basis.

The next question is from the line of Sami Ashar from abitCapital.

So I just wanted to know how -- what kind of growth you are projecting in your reel segment because in the Q3, you had mentioned you are facing some competition from some domestic players as well as some Chinese players?

No domestic promising, there is nobody except qualified, there is nobody in the market today, domestic-wise.

Okay. So what are -- what kind of growth are you projecting for FY '27 in the renal segment.

20% growth in the regional segment again. So we are still not say maybe around -- earlier we were targeting 30%, 35% growth. But I think the Chinese headwinds continue to kind of disrupt the market -- so we are still seeing maybe a 20% growth or maybe over 20% growth this year also in this business. We have initiated certain actions against Chinese companies. I can't tell you because that's confidential. But we are working with the government of India to help us through this because many Chinese companies have set up bases in ASEAN countries where we have a 0 import duty on medical products from AA countries. So that is hurting the current environment. So we are working with the government to arrest that point. And I think, hopefully, you'll see some actual. But in spite of all that, maybe it happens doesn't happen, I think we are still the ageofover 20% in [indiscernible]

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

Yes, we are back. And I think we have added some distributors in Northern Europe. We have added some distributors in U.K. and also in Germany. So I think all that is helping out.

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

We don't think in every industry. I think that is the problem across the industry, not in any. But because Polymed we have a lot of products which are very specific things, there are certain patents protection. So I think we are not impacted. See, the demand is not getting demand, which was impacted due to supply chain, last time, I mentioned very specifically that there was, let's say, maybe an oversupply because of the route opening from Red Sea and also which continues going around Africa to Europe. So that was a mismatch there. But now everything is smooth. So I think now we are seeing more better demand coming from Europe, actually.

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

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

The overall inventory. So if I look at your balance sheet, your inventories have increased from INR 285 crores to INR 430-odd crores. So is there any some inventory, which is yet to be billed?

Is the conform number or you're looking at the consol number?

Is got an impact of the acquisition as well. If you look at the stand-alone balance sheet, that increase is about INR 30-odd crores.

On the stand-alone is only INR 30 crores addition on inventory -- and basically, more the SGS for final inventory as on 31st March was around INR 30 crores, INR 35 crores. So there's not too much of we don't keep over our SGS and we're basing it 5, 6 days in inventory basically at the end of the year. So it's very tightly managed. And also, there was a raw material level. So that's the reason the first 2, 3 months, we are not able to see the heavy impact of raw material price increase. So that's where you see that.

The next question is from the line of Kane Gupta from same office.

Sir, my question would be that if the business is currently for FY '26 grown at low double digits despite the earlier confidence of mid-teens growth, what specific levels with management confidence that the company can reaccelerate growth over the next 3 to 5 years?

I think we have to see that last year was more or less for us also a lot of transition here. So there is a lot of focus on high technology, building new technology products. And over a period of time, Polymet was very steady on the -- so we are transitioning from lower technology to medium to high technology, and that's a huge transition we are committing and as I've mentioned on my call initially, so next 5 years, that's where the direction is, whether we focus more on orthopedics on cardiology, unetology, on oncology. So these are 4, 5 key areas, renal care. These are forbid areas we are going to focus more and more in future. And that helps us to even get a better gross margin in the business. And also, what we have seen over the last 1 year that wherever we had some lower revenue, we are trying to fix that U.S. was a big -- I think for us, I would say, a red flag because of the current situation, which was in the U.S. on direct situation. So that delayed our launch to the U.S. market quite a lot. So all that is coming back. India is coming back because, see, you have to see it from 2 perspectives. First of all, our currency, which is Indian country, which is evaluating is going to help us more in export for sure. So that's a big advantage. Secondly, Volaris see medical device industries was 70% import driven in India, 60%, 70%, so whatever companies, they were including products they are getting expensive for them. Being a local manufacturer in both substitutions, bringing institution, import of fusion products, that makes the product more competitive to hospitals. -- and also the whole scenario is changing in India. The hospital sector, which was, let's say, 50% gas driven, 50% insurance driven. Now things are changing. I think there it's 60%, 65% insurance and balances cash. So that also is pushing them towards more towards domestic and manufactured products. So all these are tailwinds which are going to help us to grow our business. And plus we are going -- we talked about U.S. a little bit earlier, we talked about Brazil and then going a little bit more direct in Europe with our subsidiaries. So all that will happen in next coming years will help us to grow faster and increase our presence in important market.

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

I can say that absolutely for the moment here, but we opened over happen tomorrow morning. That is my worry, and answer everybody's worry. What happens to ordering, nobody knows I think PC is steady state, even at current crude level prices, I think we are in a good shape.

And sir, realistically, what would be the sustainable organic growth rate of the business over the next 5 years, excluding acquisitions?

See, if you see, even on the guidance we have given this year, even when we say INR 2,300 to INR 2,400 revenue guidance for this year, consol level, we're already talking over 25% growth rate, which is over 25% group led, so it's already -- we are pushing the pedal again. So this is very clear. Even on a stand-alone basis, when we say INR 1,900 crores INR 1,950 revenue from INR 1,652, we are already guiding over 15% to 16% revenue increase. And I think gradually, standalone will further increase as we launch more products in different segments we are working on a lot of new launches are happening. So I'm sure some of you have visited facilities already what we are doing.

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

So I think there are 2 important points here. Most of our customer relationships outside of India have been for the last 15, 20 years. And we have hardly lost any large customer in last 10 years. That's number one. And the stickiness is clear because of 2, 3 reasons. One, because of quality, which we delivered because depolement has almost every quality stands our products comply to every possible global quality standard. Number two, in terms of performance, our products are performing at par with multinational products in global markets. Number three, the innovation we are able to do. So the company has over -- at a group level, we have around close to 399 patents. So we are able to innovate products at a much fuel cost compared to any other company and then put those products in the market. So that gives us a stickiness in the business. So all these factors contribute to that take [indiscernible]

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

So it's a great question. So actually, I would like it to be between like 1/3, India and 2/3 ROW.

[Operator Instructions] The next question is from the line of Min Mehta from Ikeja ecologies.

Couple of questions from my side. Sir, first, for the quarterly perspective, our subsidiary revenue stands at roughly almost around INR 92 crores. Can you please give the broad-based bifurcation of what kind of revenue will be from the ante for the quarter? And what kind of revenues on the CTP and what will be the Y-o-Y percentage growth rate of this -- that's my first question.

Yes. Sir, a can answer that question.

Yes. So Neil, the total revenue of INR 65 crores that we have done from the 2 acquisitions, about INR 43 crores, INR 44 crores is from CTS and the balance is from Pendal.

And sir, what would be that Y-o-Y growth rate of that?

I will check on that and come back to you.

Okay. And sir, if I see from the stand-alone level like, since you mentioned that INR 30 crores only increase in dies because if you see the FY '26 no our growth rate is close to around 4%, 5%. That's why probably doesn't look so. But if we see from the perspective of the days, inventory has increased from 50 to 58 days. How we are planning to reduce that? And apart from inventory as we see receivables which has increased drastically from black INR 40 crores to INR 440 crores -- like in the terms of this is a. So like can this help me? Can you throw some light on that? How do we see that?

Yes. So Neil, I think on the inventory side, we are not too concerned. In fact, it's currently helping us only because a large part of our inventory is in raw materials, right, so which is helping us cushion some of the price impact that we're seeing. So a INR 30 crore increase for a business of our size is probably not very some. On the debtor side, I think, obviously, there has been a significant jump on the debtor side. And that's primarily because of the external factors, right? Because the -- as we mentioned, the international environment was quite troublesome, and we had to support our customers in terms of better terms for them to drive growth, right? So I think that's been prime the reason bulk of the increase on the debtors has happened because of the international business. The domestic business receivable cycle continues to remain quite strong, and we don't see any challenge. I think as the international environment becomes more valuable, I think the debtor cycle will come back. But in the interim for us, ensuring our customer retention and ensuring growth, we are there when the growth comes back, we are willing to extend the health to the customers.

Great, sir. So is it fair to say, let's say, from the perspective of FY '27 this will be then at a normalized level of receivable days by the end of FY '27.

I think at the moment, looking at the environment, I would expect receivable cycles to be similar for FY '27.

Okay. Okay. And sir, if you see from the export revenue from the first part of fourth year FY '27 or condition that we have allotted almost INR 362 crore. If I now remote Panta or, let's say, remove the subsidiary venues out of that, which is INR 90 crore kind of numbers. Then the core export growth looks kindly slightly flattish or a slight decline in that. So how -- like what we are doing to ramp that we can command the growth going forward from the export market good to antigenicity.

So I think 2 things, you're right. The export in fact, were negative, not flattish also, we were I think minus 3% or 4% on the export side. But again, what we are trying to do is, as I said earlier, U.S., again, the doors are open, and we see some new products getting added this year for export to S market. We are in that process. So that will add something. Europe. We've added more distributors. So I think that is helping us to regain that growth in the European market. And in certain markets, we go direct as we open a subset in Brazil, we're going direct there. So that would also open some doors there. So I think all in all, I think -- and then our focus has been more on the clinical side. Sian we have increased our hospital visits internationally. So our team has been visiting globally all across from every -- almost every country in Europe to in Middle East or, of course, or in Southeast Asia, all these markets, we are putting a lot of clinical support which is helping us to mitigate earlier challenges. So -- and then this upsell is actually helping us to move into more products into the hospital.

And just last 2 questions from my side. Sir, I think we have been really good in terms of renal segment. I just wanted to know that what kind of -- would you like to put a number like how much varies machines that we have sold for FY '26 and how do we see that number coming up in FY '27. That's my first question and last question is that on so can you just help me with the EBITDA margin of Mandarin for the quarter?

I think on the rental very, I said we sold 450 machines last year. And this year also, we -- as I said, real business, we grew close to around 20%. So we'll see maybe a sequentially 20% increase in the sales of machines also this year. That's the current plan. And I think on CPM Perelshtein.

Neil, can you just repeat your question on this, please?

Yes, yes. So sir, I just wanted to know what kind of EBITDA margin that we have locked for Pentair and Sudip individually for this quarter?

Yes. So I think this quarter, the EBITDA margin, the acquisition has had a negative impact on EBITDA of about INR 2.6 crores. there are 2, 3 reasons for it. Number one, quarter 1 tends to be -- or quarter 1 of their calendar test to be a lower quarter because of shorter working period plus for Pender care, they had a fairly large exposure to Middle East compared to what the overall group level is, which has gotten impacted a bit more. And for CTF they had a sort of a product mix issue in terms of selling certain low-margin products because of its EBITDA margin or lower. I think on a steady-state basis, when things become normal, we think both the business can operate at mid-teens in terms of EBITDA margin. And obviously, with the benefit of synergies that we will drive over the course of next few years, we expect that number to go up but quarter 4 or quarter 1 of their calendar year was a lower EBITDA margin for them.

The next question is from the line of sialaniPapan from IT BMS.

Thanks for the opportunity, sir. So in intravascular you could see and regulating for these new products, is the complete product development than in-house? And has the product been commercially and can we also know the utilization rate of the capacity that were expanded after [indiscernible]

Yes. So I'd be one, I'll answer the last question first. So we are seeing a capacity utilizing of close to around 65% to 70% right now. And on the products, which are developed, it's fully developed in-house. So a lot of products are in pipeline right now, which we'll announce in due course. We will already launched eroding balloons, again, fully in the giant developed product. There's 100% import substitute product and very few companies are able to make that kind of product. And we are working on some high-level products which is around 1 lakh or 7, 8 lakh lab products in times to come. So there are a lot of development projects going on in cardiology space in orthopedic space, also in oncology and also some new products are getting launched in real estate also.

Great. And sir, in the previous con call, you mentioned there's a good opportunity to replace the multinational in the stent segment. We usually in internal market where there is no domestic player as importation -- but we have a couple of large domestic players along with other large inventories. So how are we planning to increase our market share in this competitive segment?

So again, the focus is not in selling stands. We are not focusing our spend is a very small part of our business, maybe INR 10 crores, INR 12 crores order, crores. So I think that is not we are focusing on our focus is to develop products because you need the full basket when you are approaching a hospital product. So we can't be just working on a few products. And that doesn't compete the basin, it's very hard to change the practice. So they are moving up the value than, as I told you earlier, on DES and some other new devices,doubling balloons and some other specialized products. So that is where we are working on. I think drug-testing a part of that basket. And I think in both subsolution. -- our focus is overall in the whole product category where it was a real or oncology or whatever new nature, it was back floor access. So we are working on across all categories to bring import substitution in rural country.

The next question is from the line of Deepak from Sundaram Mutual Fund.

Sir, first of all, congratulations on delivering a good set of number on the top line, as promised in the earlier con call. Sir, my question was first on gross margin. So if I look at our 9 months gross margin, what we delivered in the first 3 quarters, it was roughly between 68.5% to 69%. And you did highlight on the call that it is because our critical care and cardio vertical, which is our new vertical firm. for us, which is ramping up nicely, and that is what you eventually want to grow in the next couple of years also. But if I look at Q4 gross margin, there is a dip of almost 1.7% to 1.8% on a Q-o-Q basis. So despite these 2 products going up, let's say, in terms of execution and also full quarter consolidation of high gross margin business like CTF and Pentair. I just wanted to understand why there is a dip in the gross margin in Q4?

Yes. Deepak, I think the quarter 4 impact is primarily because of product mix issue. Obviously, we have a large product portfolio, right? And in some cases, some of the products are lower margin on a gross basis. And so I think the impact of that is primarily to the product mix rather than anything else.

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

Basically, when we see it today, our raw material percentage around 32% to 33%, basically because that's where rests the gross margin basically. So on that, we have seen almost a 20% increase in overall raw material pricing when we spread across all the materials which we buy from packaging to basic raw materials, which are -- a lot of them are polymers. So already, we see that around -- some of it has already mitigated by rupee depreciation or cross because we have almost 2/3 moatrevenue coming from international business. And then we have done some price increases with customers between 3% to 5%. So that will also help. So today, situation is very fluid. And I think we'll have more clarity end of quarter 1 when we review everything. But at the present stage, I think with the high inventory of raw material, which we were carrying on as of 31st March, we will be able to really manage it very well. And hopefully, as we talk in the next few months from now, the crude prices may soften from where they are today, and that will again help us to mitigate those risks, which have been created today. So far, I think we are okay. I don't see any huge risk, but let's wait for a few more months. So internally, I think we are okay in the term situation.

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

Chinese something continues. I think there is no -- unless egovernment things otherwise, the dumping continues -- and you have to see from that angle that today, Chinese are importing at 0% duty only 5% GST pay in the finished product whereas I'm importing I'm buying all the raw materials, I'm importing some raw materials. I pay 18% duty-pay 2.5% duty custom duty on my raw materials, 18% GST there's a lot of cost in version plus the comping of the Chinese. So all that is actually -- and that's the reason you see today hardly any detail there has come in the last 5 to 7 years in the country. In spite of the segment being very open and both are still there in this segment. So I think that is a challenge. And of course, volume being a large manufacturer, we are able to mitigate a lot of this because we have a lot of manufacturing excellence we are able to mitigate that part. So again, our focus is to gain market share. We are working on that. And I think this dollar devaluation rupee devaluation against the dollar will also maybe 1 of the factors which may help us is not 1 because somebody's importing products will have to pay at a higher price. So I think -- and we are also pushing the government to put some counter duties on the product. So let's see what happens, but I think overall, 20%, 25% growth is still attainable in this business.

Okay. Okay. Sir, 1 last question on the acquisitions. So would it be -- will you be able to call out what was the CTF and Penta care, let's say, calendar year '25 full year revenue in terms of euro million?

Because for CTF, that number was about EUR 17.5 million. And for penderCare, it was about EUR 8 million.

Okay. And sir, in these terms, how much growth are we anticipating in this both in FY '27 in euro terms?

In euro terms, I think we should be growing for CTF in low or 10% to 12%. And for Fendercare because of the Middle East situation and their exposure to that, I think we are restricting the guidance.

Next question is from the line of Suhani from CWC.

Just a couple of question. On the INR 9 crore online cost that you mentioned in respect to the acquisitions, if you could give us some color around what that cost was, that was question number one. Question 2 was if I had to sort of deduce basis, the 50-50 split in Europe and rest of the world for your quarter 4 sales for Chita and Pender, then that means the rest of the world sales in quarter 4 may have a slight degrowth. Is that the right inference? And if so, could you share what -- where that impact primarily was? That was question too.

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

No, year-on-year. So basically looking at your INR 65 crores split 50-50 into Europe and rest of the world and keep keeping that base, right? Europe seems to be more flat FY '26 versus '25, and rest of the world seems to be a minority growth.

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

Got it. Sure. And sir, you had mentioned on the onetime cost being certain regulatory and employee costs. So is there already some manpower rationalization and cost savings that 1 can expect?

So these were basically costs which were just accounted for the end of the year in quarter 4, and it impacted the quarter 4 numbers. And there is no mention being done in any of these entities.

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

Yes. So it was a flat performance, and it was primarily because of 1 of the tenders that they had been on in the LatAm region was canceled and was pushed out. And because of which they lost a certain revenue in last calendar year.

We'll take the next question, which is from the line of Kirish Shen from KC Capital.

In the opening remarks, you mentioned that FY '26 was a year of transition. So I presume you are referring to the move from product focus to a therapy-focused approach.

Actually have actually understood very well.

And you also mentioned about the breakup of the segment revenue. I think you mentioned infusion vertical has gone down to 52% in Lone up to 11%. I could not capture the other percentages between cardio and Onco?

these are OncoCard very new businesses. So we don't specifically call out those revenues. But the whole idea is that company at 1 point of time was doing 65% business on infusion. And we are trying to derisk that and add more products in the other product categories. And I think that is really helping us to grow the business globally and also improve some gross margin. So that's the whole idea. We don't call out those numbers specifically because confidentially. We don't want to share what company is doing and that information goes out publicly.

But safe to assume that infusion as a percentage of the overall revenue will still be coming down even though it can grow on a stand-alone basis. But as a percentage of the overall infusion may come down and the other segments may go up. and therefore pulling your gross margin higher?

Again, that is our core, core business -- so we think that it will stay around that 50% level infusion because that's where polymer today, if you see 1 of the products we manufacture, i.e., Kathee have almost global 11% market share on the product. $600 million of those product cases. So that means we have a global excellence on this product. There are hardly any companies in India which in claim a 10% global market or any similar product, and we have that today. So I think that still remains to their core business and our accessories we produce we have a global excellence or have a lot of patents on that product technology. So that will be there. But as we move into the higher price segment, when you look at orthopedics or cardiology, the price per product is very high. So that infusion, which is I said INR 10, INR 15, INR 20, this products are INR 1,000s of us or sometimes not a INR 20,000 also. So that is how the product mix, revenue mix is shaky.

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

Today, we are calling out those margins if you see the guidance we have given of our India business is like around 25%, 27% EBITDA margin side of all the headwinds. What do you see today? And overall, we have guided for 23% to 25% that we know that the international business is operated lower EBITDA margins. So we are still guiding in these ranges because we know -- and all this has been accounted for based on the current crude price level. So if we see some improvement in full price level, let's say, next few months, definitely, those margins should get better. I think that's what we think. But at least from the current state, let's assume that we are in that band of 25%, 27%. But yes, we will try to deliver at a higher band what we have delivered in the past year also in FY '26. We deliver the numbers at a higher band of between 25% and 27%. We delivered at 26.8% EBITDA at the stand-alone level.

Just a relative question on the margin. Is there any -- I'm sure there must be a strategy, which maybe you can highlight on how we plan to increase the margins in the companies which we recently acquired City app and Pentair?

So Greig, it's a good question. So what we are trying to do is we're trying to bring -- so a lot of engineering work we are doing in India right now. We are also looking at the global supply chain, helping them to secure materials at much lower price, what they were buying earlier. And also some part of manufacturing, we will probably ship to India at some point in time once we have all the regulatory garants to do that. So all that in the long run will help us to see currently, these companies will operate, let's say, around 12% to 14% margin. That is what we anticipate. But I think in next 2, 3 years, we could see that improvement to go in to around 18% to 20%.

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

I'd like to thank all of you for being on the call today and hearing us our updates on the company. And let me assure you, again, we are in medical device and health care business, it's bound to grow. Last year was a challenging year. Of course, again, a lot of strategic planning went in last year in terms of acquisitions and spend. I think in terms of infrastructure to put a company hold and 1 of the best infrastructure as some of you visited plant already know that, that Polymers 1 of the best in sorters in terms of med tech manufacturing and we continue to build very strongly. And as we are seeing more and more registrations coming through in many countries in the current year and also in the following years, we'll see our business increasing globally. And India also, we are pushing hard and a lot of these corporate today. The brand is very well known. People and seen brand as a quality product. And it has taken quite a while to do that. And I think we are in a very safe space, I can tell you that. And I'm pretty sure that once you see our performance which you already guided today, I think you will see that happening and I think you'll see much better results in coming years.

Thank you very much. Ladies and gentlemen, behalf of Poly Medicure Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.