Ladies and gentlemen, good day and welcome to the Poly Medicure Limited Q4 FY 2026 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 touch-tone phone. Today on this call, we have with us from the senior management team of the company, represented by Mr. Himanshu Baid, the Managing Director, Mr. Naresh Vijayvergiya, CFO, Mr. Rahul Gautam, President, Strategy and Corporate Development. I would now like to hand the conference over to Mr. Himanshu Baid. 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 2026 earnings call. I sincerely thank you all for being here today. Last financial year, FY 2025/2026 was a year of deliberate transition. A fundamental upgrade from our business model toward high technology, high complexity, high growth segments. A year in which we chose to invest in a difficult external environment, rather than wait it out. We invested in high technology verticals, built out clinical and R&D teams, and despite general headwinds, we delivered every commitment we made you on Q3 call. Poly Medicure is currently on a strategic transition where we intend to become a globally recognized brand in high-end medical devices over the next five years. FY 2026 is just the initiation in that journey.
In FY 2027, we'll concentrate initiatives that we have undertaken, drive synergies across the group, and continue investments in high-end technology segments. Let me share how we intend to leverage PendraCare and Citieffe over the next two years, the companies we acquired last year, and integration work is in fully underway. On the cost side, through procurement and manufacturing processes, outsourcing, leverage savings. We are working on those areas aggressively. On the revenue side, we'll be cross-selling both directions. India will introduce these products. We are waiting for registrations to come through. It takes between six to nine months to get import registrations. We have also started leveraging Polymed's distribution network globally for this product. 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 new markets, and that's already happening as we speak. On the R&D front, our teams are collaborating for new products. We are already working on a lot of new devices. The R&D team there in Europe and in India is working simultaneously to fast-track a lot of projects which were stuck earlier. 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 to reflect in the performance of FY 2027. Before the numbers, I would like to update on the expansion of our global footprint in a new geography with an acquisition of MEDYNEO in Brazil, a medical device company in Brazil.
Brazil being the largest medical device market in South America, close to around INR 13 billion-INR 15 billion, is a gateway towards the LATAM region. MEDYNEO comes with ANVISA and import licenses, which fast-track our entry to the market where approvals actually take years together. Brazil is a very important market for Poly Medicure, with a strong brand recall, this is a step in the direction ensuring long-term success of our business in that region. We're in the process of hiring people there, building a team, clinical team, sales team, directly in their market. As we had opened our own subsidiary, Polymed Brazil LTDA last year, I think this is in continuation of that strategy that now we have a fully operating company with all the licenses needed to start going directly in that market.
Each of these initiatives is already in motion. I think in one or two years, we'll link these three businesses into a single global platform for growth. We are already working in that direction. Some key business updates. We've launched close to 35 new products across the group in FY 2026. Of course, that also includes some products which came through acquisitions. On a standalone basis, we added around 20 products last year. On the renal platform, we placed around 450 dialysis machines last year, taking our installed capacity to approximately 1,000 machines. On cardiology, now we've enrolled close to around 11,000 stents. Clinical registry is over around 650 patients. 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 our conversation on multiple projects with customers.
Again, they're getting active. I think due to the scenario we just created last year, especially because of tariffs, I think we had a setback. Now, I think we are on track, I think we are also getting some new products that we approved. Some are in pipeline right now. I think, pretty positive about the U.S. development, I think we've taken a one-year setback on this business. I think now we're back on track, I think a lot of new opportunities are coming up from the U.S. after the change in scenario. Let me share the financial performance. Let me start with standalone performance. On a full-year basis, the standalone revenue was around INR 1,662 crore, which was up by around 4% compared to previous year. Last year was a tough year for us, especially on the export front.
The low growth in standalone business is due to tough external environment and again, mainly impacted from international revenue. Though gross margin expanded by around 128 and was up to around 68% from last year's 66.8% or something like that. On the profitability, we had guided our standalone EBITDA in the range of 25%-27%. We have delivered close to 26.8% at the higher end of the range. Standalone EBITDA was INR 446 crores. Standalone revenue for the Q4 was INR 443 crores, up 5.2% year-over-year, 6% sequentially. It was highest ever standalone quarter with Q4 gross profit of around INR 295 crores, EBITDA INR 121 crores, with a healthy margin of 27.3%. As you can see, there's been a constant improvement. When we started the year, we were at around INR 384 crores for quarter revenue.
Standalone, now we have moved to almost close to INR 443 crores. It's a steady increase. Every sequentially, we have been increasing the standalone business. Now, on the consolidated picture, full-year consolidated revenue grew by 12.3% to INR 1,875 crores. Domestic business were around up 20%, international was about 9% year-on-year. Of course, that includes addition from our acquisitions at the growth level. Of course, these were not full-year revenue. These were one acquisition happened in September, one in November. In FY 2027, we'll see a full impact of the revenue. On the Q3 call, if you recall, I had commented that H2 will be about 20% above H1, and we have exactly delivered that. The growth has been from INR 847 crores to INR 1,029 crores, an increment of around 21%.
Q4 consolidated 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%, international business around 19%. Q4 consolidated EBITDA was INR 112 crores, a little lower than the standalone numbers because there was the impact of consolidation of low-margin acquisitions and about INR 9 crore one time regulatory and cost provisions in one of our international subsidiaries. Other important points to highlight is shift in our revenue mix in Q4 2026. Infusion therapy now accounts for 50% of the revenue, down from 57% in Q4 2025, with renal around 11%, steadily rising share coming from cardiology, critical care, and other acquisitions.
In other words, our newer higher technology segments are now contributing to over 50% of our revenue, and I expect this proportion to keep on improving in coming years. That is also one of the reasons that the gross margin has started looking upwards. On the balance sheet, term liquidity remains strong in consolidated cash of around INR 842 crores. This amount is a strategic reserve for our strategic initiatives in future, and we intend to use operating cash flows to meet regular CapEx requirements across the group. For FY 2026, the CapEx was around INR 296 crores. We went to our plants in Raigarh, Faridabad, Mitrol, and also in YEIDA Medical Park. Current year, I will share the numbers slightly later. Let me give you the forward-looking guidance. There has been, of course, a huge shift in the external environment.
We have seen the current disruption caused by Gulf War. I think the situation is quite challenging. Let me tell you that we are managing every piece and working on a lot of initiatives inside the organization. I think West Asia, I just want to call it out, has around 6%-8% of our revenue comes from there. Though the demand seems to be quite intact, we don't see any drop in demand. I think it's a logistic nightmare right now. I think there's a lot of bottlenecks which are causing some disruption in shipping products out of India. I think from the demand side, I think it's pretty much intact. We have pending orders which we need to execute. We are still waiting for supply chain and shipping routes to improve and have better pricing.
There has been an impact on raw materials and plastic packaging materials all across, because most of them are crude linked. We see there was impact of around 20% on aggregate basis in raw materials and a meaningful headwind to the gross margin. Just let me tell you one thing that your company was maintaining adequate stocks. Almost inventory of close to two and a half to three months. Because of that, we didn't see too much of a impact in Q1 . So far, we've been able to minimize it, and we are taking more steps to minimize this risk. I think if the crude prices, the current business plan we have looked at is being made on crude levels of around $100 and I think $100- $110. I think in times to come, crude prices will definitely soften up.
I think this headwind will kind of go down a little bit. Let me tell you that the freight costs and minimum wage revision in Haryana has caused some disruption, but we are able to get our price increase from customers between range of 3%-5% already. Also currency which has moved. Rupee has currently depreciated against all major currencies and company's 60%-70% business is international export driven on a standalone basis. There, we are able to recover some costs back overall. On the current situation, based on where we are today, as on today, we may see some erosion on gross margin going from, let's say, 68% to maybe around 66% or maybe in that region. Maybe lower by 200, 300 basis points.
This is just a present estimation. If the crude prices soften up, let's say a few months, then this impact can also be minimized. Also, to minimize this risk, we are already working on a lot of cost-saving projects, looking at alternate supply sources. A lot of raw materials which we were importing, we are trying to buy from indigenous sources. A lot of parts and components which are coming from the third countries, we are also trying to make them in-house. We are working a lot. We are also seeing some saving to our Gamma plant, which we have established this year, is now fully operational. A lot of saving optimization projects are already happening inside the organization. Hopefully, by the end of the year, we may see this impact to be very negligible, not even this INR 200, INR 300.
Based on the current situation, I think we see it 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 revenue guidance for FY 2027. On a consolidated basis, we are guiding a revenue of INR 2,300 crore-INR 2,400 crore, up from INR 1,875 crore we have done in FY 2026, which will include full-year consolidation of PendraCare and Citieffe. On standalone basis, we are guiding on a revenue of INR 1,900 crore-INR 1,950 crore, with domestic business going upwards of 20% and international business going upwards of 15%. This is our guidance for the full- year of FY 2027, standalone INR 1,900 crore-INR 1,950 crore, and on consolidated basis between INR 2,300 crore-INR 2,400 crore. Standalone EBITDA margin is expected to be, again, we are giving a guidance of 25%-27% range.
Of course, this year as well as last year, FY 2026 was the same range we have given. We should be able to almost cover the same thing. On consolidated basis, EBITDA margin, because our facilities operate at a lower EBITDA margin right now, and we are in on the phase of doing a lot of cost-saving projects there. We expect this year consolidated EBITDA to be between 23% and 25%, but standalone will be between 25% and 27%. We expect to spend between INR 200-225 crores on CapEx this year. This is the 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, the CapEx requirement will be a little lower.
Of course, we are pushing more on automation right now, so that at least we can mitigate some wage revisions, which has happened in our higher wage salary cost. In summary, I think we have delivered every Q3 commitment we made. H2, 20% of H1, standalone EBITDA in the higher end of the range. Around INR 450 million machine placements done in the year. Almost 35 new products launched in FY 2026. I think we have a clear domestic import substitution strategy, 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 crore to INR 2,300 crore to INR 2,400 crore is a substantial growth we are planning this year.
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 high because today, the demand is coming back, what we had lost earlier in the last year. Also Indian market, I think we can see our presence now in most of the corporate chains, larger hospitals, and even in standalone hospitals. I think that business is also going to grow in a higher percentage level. 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. Anyone who wishes to ask a question may press star and one on the touch-tone 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. Ladies and gentlemen we will wait for a moment while the question queue assembles. First question is from the line of Sidharth Negandhi from CWC. Please go ahead.
Hi, Mr. Baid. Thank you for the opportunity. Three questions from my end. If you could give us some details on the Brazilian acquisition in terms of the categories the target operates in, what is the revenue, and what's the acquisition cost like that you paid? On the current acquisitions that were made, Citieffe and PendraCare, is it fair to assume that most of their sales, which you highlighted broadly about INR 65 crore this quarter, are in E.U. itself, or is there a E.U. and ROW sort of split there? If you could give us that and accordingly to entail what the organic performance on E.U. and ROW is. On your guidance of 15%-17% standalone growth, could you give us a sense of how would that pan out domestically versus for exports and for the core infusion therapy versus the new therapies?
Okay. let me take the Brazilian acquisition, and I'll request Himanshu to comment on the other questions. The Brazilian acquisition is a small acquisition. It's a company which was registered last year as a medical devices storage and distribution company. The company does not have currently any operations. As Himanshu mentioned during the opening remarks, the rationale for acquisition for this was to leapfrog the regulatory timelines that are required to get the importation license and the ANVISA license for us to be able to take the medical devices distribution business in Brazil. From an acquisition standpoint, it was about $40,000, so it's a small acquisition from a cash outlay perspective, but it clearly saves us anywhere between 18 - 24 months to be able to operationalize the business.
Got it.
On the other two companies, yes, PendraCare and Citieffe have almost 50% sales in Europe and 50% in rest of world. Citieffe 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. PendraCare has majority business in Europe and some business in Middle East and Latin America. On the Indian business and on the standalone business, basically we are seeing domestic business will grow around 20%. That's what I've guided again. International business will grow around 15% also. We're anticipating standalone business to grow to around INR 1,900 crores-INR 1,950 crores from a current base of around INR 1,662 crores.
Got it. Just to follow up on that, given how that panned out, in terms of the headwinds that you saw this year in Europe.
Yeah.
How do you see the situation on ground now and when do you expect, at what point in time in FY 2027 or whenever, do you expect this to normalize?
I think headwinds have not. 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. Currently, last three, four months, we are seeing a good uptake, and I think the pipeline is also very strong in Europe. I think overall we are very positive about the current business in Europe, what we are doing from PolyMed's standalone basis.
Got it. Thank you so much. Thanks a lot. I'll get back with you.
Thank you. The next question is from the line of Shamit Ashar from Ambit Capital. Please go ahead.
Yeah, hi. Hi, sir. Thanks for the opportunity. I just wanted to know what kind of growth you are projecting in your renal segment, because in the Q3 you had mentioned you are facing some competition from some domestic players as well as some Chinese players.
Import. Not domestic. Domestic there's nobody. Except PolyMed, there is nobody in the market today, domestic-wise.
Okay, what kind of growth are you projecting for in FY 2027 in the renal segment?
20% growth in the renal segment again. Earlier we were targeting 30%, 35% growth, but I think these Chinese headwinds continue to kind of disrupt the market. 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 zero import duty on medical products from ASEAN countries. That is hurting the current environment. I think hopefully we'll see some action. In spite of all that, maybe it happens, doesn't happen, I think we are still targeting a growth of over 20% in renal.
Also in the European market, are you back projecting around 15% or 14%?
Yeah, we are back. I think we have added some distributors in Northern Europe, we have added some distributors in U.K. and also in Germany. I think all that is helping out.
Are the Chinese players still dumping there? Is that situation resolving?
Chinese dumping in every industry. I think that is the problem across the industry, not in any because Polymed, we have a lot of products which are very specific. There are certain patent protections. I think we are not impacted. See, the 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. That was a mismatch there. Now everything is smooth, I think now we are seeing a better demand coming from Europe actually.
Got it, sir. Also if I look at your inventory, how much of that would be under goods in transit, if you could give some bifurcation, because I am sure some of that must have been because of the logistical issue. How much do you expect to bill it in the Q1 ?
Inventory in transit? No. Are you talking about export inventory?
Your overall inventory. If I look at your balance sheet, your inventories have increased from INR 285 crores to INR 430 odd crores. Is there any inventory which is yet to be billed?
Is it console number or you are looking at the standalone?
Console number.
Obviously got an impact of the acquisitions as well. If you look at the standalone balance sheet, that increases about INR 30 crores. On the standalone, it's only INR 30 crores addition on inventory. Basically, the FG for finished goods inventory as on 31st March was around INR 30, INR 35 crores. We don't keep so much of FG and basically it's five, six days inventory basically, at the end of the year. It's very tightly managed. Of course, there was enough raw materials available. That's the reason those first two, three months we're not able to feel that heavy impact of raw material price increase. That's why you see that.
Got it, sir. Thank you. I'll come back in the queue for more questions.
Thank you.
Thank you. The next question is from the line of Kanishk Gupta from Axis Family Office. Please go ahead.
Sir, hello, a very good evening to you. Sir, my question would be that if the business is currently for FY 2026 grown at low double digits despite the earlier confidence of mid-teens growth, what specific levels give management confidence that the company can re-accelerate growth over the next three to five years?
See, I think we have to see that last year was more or less for us also a lot of transition year. There was a lot of focus on high technology, building new technology products. Over a period of time, Polymed was very steady, we are transitioning from low technology to medium to high technology, and that's a huge transition we are committing. As I mentioned on my call initially, next five years, that's where the direction is, whether we focus more on orthopedics, on cardiology, neonatology, on oncology. These are four or five key areas, renal care. These are four or five areas we are going to focus more and more in future. That helps us to even get a better gross margin in the business.
And also what we have seen over last one 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 tariff situation. That delayed our launch to the U.S. market quite a lot. All that is coming back. India is coming back because, see, you have to see from two perspectives. First of all, currency, which is Indian currency, which is devaluing, is going to help us more in exports for sure. That's a big advantage. Secondly, overall, see medical device industry is 70% import-driven in India, 60%, 70%. Whatever companies they were importing products, India was getting expensive for them.
Being a local manufacturer, import substitution, bringing import substitution product, that makes the product more comparable to hospitals. Also the whole scenario is changing in India. The hospital sector which was, let's say 50% cash-driven, 50% insurance-driven. Now things are changing. I think it's now 60%, 65% insurance and balance is cash. That also is pushing them more towards domestically manufactured products. All these are tailwinds which are going to help us to grow our business. Plus we are going direct to market. 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. All that will happen in next coming year. It will help us to grow faster and increase our presence in important markets.
Sir, broadly at present, is it really safe to say that the worst is really behind us?
I can say that absolutely for the moment, yes, we don't know what is happening tomorrow morning. That is my worry. I'm sure it's everybody's worry. That what happens tomorrow morning, nobody knows.
Definitely, sir.
Steady state. I think we see a steady state even at current approved level prices. I think we are in a good shape.
Sir, realistically, what would be the sustainable organic growth rate of the business over the next five years excluding acquisitions?
If you see even on the guidance we have given this year, even when we say INR 2,300-INR 2,400 revenue guidance for this year, consolidated level, we are already talking about 25% growth rate, over 25% growth rate. It is already, we are pushing the pedal again. This is very clear. Even on standalone basis, when we say INR 1,900 crore-INR 1,950 crore revenue from INR 1,652 crore, we are already guiding over 15%-16% revenue increase. I think gradually standalone will further increase as we launch more products in different segments we are working on as lot of new launches are happening. I am sure some of you have visited facilities already to know what we are doing.
Got it, sir. 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?
Yeah, I think there are two important points here. Most of our customer relationships outside of India have been for last 15, 20 years, and we have hardly lost any large customer in last 15, 20 years. That's number one. The stickiness is created because of two, three reasons. One, because of quality which we deliver because PolyMed has almost every quality standard. Our products comply to every possible global quality standard.
Number two. In terms of performance, our products are performing at par with multinational products in global markets. Number three. The innovation we are able to do. The company has, at a group level, we have around close to 399 patents. We are able to innovate products at a much frugal cost compared to any other company, and then put those products in the market. That gives us a stickiness in the business. All these factors contribute to that stickiness.
Sir, in the long run, what kind of revenue mix do you want to achieve in terms of Indian and international business?
That's a great question. Ideally I would like it to be between one-third India and two-third RoW.
Okay. Certainly, really appreciate the answer. Thank you very much.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, we would request you to please limit your question to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Neel Mehta from Equirus Securities. Please go ahead.
Hi, sir. Thank you for the opportunity. A 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 revenues will be from the PendraCare for that quarter, and what kind of revenues from the CTIP, and what will be the YoY % growth rate of these two? That's my first question.
Yeah. Rahul can answer that question.
Yeah. Neel, the total revenue of INR 65 crores that we've done from the two acquisitions, about INR 43-44 crores is from CTIP and the balance is from PendraCare.
Sir, what would be that year-over-year growth rate of that on a quarterly basis?
Last year numbers, I will check on that and come back to you.
Okay. Sir, if I see from the standalone level, since you mentioned that INR 30 crore only increase in inventory, just because if you see the FY 2026, that growth rate is close to around 4%, 5%. That's why probably it doesn't look so, but if we see from the perspective of the days, inventory days, it has increased from 50 to 58 days. How we are planning to reduce that? Apart from inventory days, if you see the receivable side, which has increased drastically from, let's say, INR 340 crore to INR 440 crore. Like in terms of days, it's 68 days to 86 days. Can you throw some light on that? How do you see that?
Neel, I think on the inventory side, we are not too concerned. In fact, it's currently helping us only because large part of our inventory is in raw material. Which is helping us cushion some of the price impact that we're seeing. INR 30 crore increase for a business of our size is probably not worrisome. On the debtor side, I think obviously there has been a significant jump on the debtor side, and that's primarily because of external factors, right? As you mentioned, the international environment was quite troublesome, and we had to support our customers in terms of better terms for them to drive growth, right? I think that's been primary reason, bulk of the increase on the debtors have happened because of the international business.
The domestic business receivable cycle continues to remain quite strong and we don't see any challenge. I think as the international environment becomes more malleable I think the debtor cycles will come back. 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 help to the customers.
Yes, sir. It is fair to say, let's say from the perspective of FY 2027, this would be then the normalized level of receivable days by the end of FY 2027?
I think at the moment, looking at the environment, I would expect receivable cycles to be similar for FY 2027.
Sir, if we see from the export revenue from the perspective of quarter, if I understand that we have a quick look at around INR 362 crore. If I now remove the CTIP and PendraCare or let's say remove the subsidiary revenue out of that, which is INR 90 crore kind of numbers, the core export growth looks slightly flattish or a slight decline in that. What we are doing to temper that? We can command the growth going forward from the export market growth ex of PendraCare and CTIP.
I think two things. You're right. The export, in fact, were negative, not flattish also. It was I think minus three or four % on the export side. 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 U.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. Certain markets we'll go direct. As we open subsidiary in Brazil, so we're going direct there. That will also open some doors there. I think all in all, our focus has been more on the clinical side. We have added a lot of people on the clinical team.
Now we are doing a lot of global clinical trainings, and we have increased our hospital visits internationally. Our team has been visiting globally all across from almost every country in Europe to in Middle East or of course in Southeast Asia. All these markets, we are putting a lot of clinical support, which is helping us to mitigate earlier challenges. I think this offset is actually helping us to move into more products into the hospital.
Perfect, sir. Just last two questions from my side. Sir, I think we have done really good in terms of renal segment. Just wanted to know would you like to put a number, like how much dialysis machines that we have sold for FY 2026, and how we see that number coming up in FY 2027? That's my first question. Last question is that, Mr. Gautam, also can you just help me with the margin of PendraCare and Citieffe for the quarter? That's it from my side. Really.
I think on the renal side, very quickly, I said we sold 450 machines last year. This year also, as I said, renal business will grow close to around 20%. We'll see maybe a sequentially 20% increase in the sales of machines also this year. That's the current plan. I think on Citieffe and PendraCare, maybe I'll ask Rahul to very quickly chip in. Neil, can you just repeat your question on this, please?
Yeah. sir, I just wanted to know what kind of EBITDA margin that we have clocked for PendraCare and Citieffe individually for this quarter?
I think this quarter, the EBITDA margin, the acquisition has had a negative impact on EBITDA of about INR 2.6 crores. There are two, three reasons for it. Number one, Q1 of their calendar year tends to be a lower quarter because of shorter working period. For PendraCare, they had a fairly large exposure to Middle East compared to what the overall group level is, which has gotten impacted a bit more. For Citieffe, they had a sort of a product mix issue in terms of selling certain low-margin products because of which EBITDA margin was lower. I think on a steady state basis, once things become normal, we think both the business can operate at mid-teens in terms of EBITDA margin.
Obviously with the benefit of synergies that we will drive over the course of next few years, we expect that number to go up to 20%. Q4 or Q1 of their calendar year was a lower EBITDA margin for them.
Okay, sir. Thank you so much. That was very helpful, sir.
Thank you.
Thank you. The next question is from the line of A. Sriram Palaniappan from iThought PMS. Please go ahead.
Thanks for the opportunity, sir. In intravascular lithotripsy and drug-eluting balloon, for these new products, is the complete product development done in-house? Have the products been commercialized? Can we also know the utilization rate of the capacity that were expanded after QIP one?
After the QIP one, I'll answer the last question first. We are seeing a capacity utilizing close to around 65%-70% right now. On the products which are developed, it's fully developed in-house. A lot of products are in pipeline right now, which we'll announce in due course. We will already launch drug-eluting balloons, again, fully indigenously developed product. This is 100% import substitute product. Very few companies are able to make that kind of product. We are working on some high-level products, which will be around INR 1 lakh or INR 7 lakh-INR 8 lakh, INR 10 lakh products in times to come. There are a lot of development projects going on in cardiology space, in orthopedics space, also in oncology, and also some new products are getting launched in renal space also.
Great to know, sir. In a previous con call, you mentioned there's a good opportunity to replace the multinational in the stent segment. We usually enter a market where there's no domestic player as an import substitution.
Sure.
Sir Hello?
Yeah, go ahead.
Yeah. Here we have a couple of large domestic players along with other industries . How are we planning to increase our market share in this competitive segment, sir?
Again, the focus is not in selling stents. Stent is a very small part of our business, maybe INR 10 crore, INR 12 crore out of INR 1,800 crore. 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 with products. We can't be just working on few products and that doesn't complete the basket, and it's very hard to change the practice. We are moving up the value chain, as I told you earlier, on DES and some other new devices, DEBs, drug-eluting balloons, and some other specialized products. That is where we are working on. I think drug-eluting stents forms a part of that basket.
I think import substitution, our focus is overall on the whole product category, whether it was renal or oncology or whether it was neonatal or it was vascular access. We are working on across all categories to bring import substitution into the country.
Understood, sir. Thank you.
Thank you. The next question is from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Yeah, thank you for the opportunity. Am I audible?
Yes. We can hear you well.
Yeah. Hi, sir. First of all, congratulations on delivering good set of number on the top line, as promised in the earlier con call. Sir, my question was first on gross margin. If I look at our nine months gross margin, what we delivered in the first three quarter, it was roughly between 68.5%-70%. You did highlight on the call that it is because our critical care and cardio vertical, which is our new vertical for us, which is ramping up nicely, and that is what you eventually want to grow in the next couple of years also.
If I look at Q4 gross margin, there is a dip of almost 1.7%-1.8% on a QoQ basis. Despite these two product going up, let's say, in terms of execution and also full quarter consolidation of high gross margin business like CTF and PendraCare, we just wanted to understand why there is a dip in the gross margin in Q4.
Yeah, Deepak. I think the Q4 impact is primarily because of product mix issue. Obviously we have a large product portfolio, right? In some cases, some of the products are lower margin on a gross basis. I think the impact of that is primarily because of product mix rather than anything else.
Okay. Got it. You also had mentioned about this price hikes, which we have taken 3%-5% and gross margin of 66%. Sir, do you think there is risk to this number since the inflation is quite a lot, and I do understand that we operate at fairly high gross margin because the nature of the business. Means, 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.
See, when we see it today, our raw material percentage is around 32%-33%, because that's where the rest is the gross margin. 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, a lot of them are polymers. Already we see that some of it is already mitigated by rupee depreciation across, because we have almost more than two-third revenue coming from international business. We have done some price increases with customers between 3%-5%. That will also help. Today's situation is very fluid, and I think we'll have more clarity end of Q1 , when we review everything.
At the present state, I think, with the high inventory raw material which we're carrying on as of 31st March, we were able to manage it very well. Hopefully, as we talk in next few months from now, the crude prices may soften from where they are today. 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 few more months. Interim, I think we are okay in the interim situation.
Okay. Sir, the renal segment, so last call you were sounding a little bit cautious because of this Chinese dumping, right?
Yes.
This quarter you have done very well, like 25% QoQ growth in the renal revenue. Just wanted to understand, has something changed between the quarter for the execution to pan out so well, and how is the situation on that Chinese dumping?
If Chinese dumping continues, I think there's no unless and until government thinks otherwise, the dumping continues. You have to see from that angle, that today Chinese are importing at 0% duty, only 5% GST they pay on the finished product. Whereas I'm importing, I'm buying all the raw materials, I'm importing some raw materials. I pay 18% duty, I pay 2.5% custom duty on my raw materials, 18% GST. There's a lot of cost inversion plus the dumping from the Chinese. That's the reason you see today, hardly any needles player has come in last five to seven years in the country, in spite of the segment being very open and the growth still there in this segment.
I think that is a challenge, and of course, Polymed being a large manufacturer, we are able to mitigate a lot of this because we have a lot of manufacturing excellence. We are able to mitigate that part. Again, our focus is to gain market share. We are working on that. I think this dollar devaluation, rupee devaluation against the dollar will also may be one of the factors which may help us in the long run, because if somebody is importing products, they'll have to pay at a higher price. We are also pushing the government to put some counter duties on the product. Let's see what happens, but I think overall, 20%-25% growth is still attainable as a business.
Okay. Sir, one last question on the acquisitions. Will you be able to call out what was the CTF and PendraCare, let's say, calendar year 2025 full-year revenue in terms of EUR million?
Deepak, for CTF, that number was about EUR 17.5 million, and for PendraCare it was about EUR 8 million.
Okay. Sir, in these terms, how much growth are we anticipating in this, both in FY 2027 in euro terms?
In euro terms, I think we should be growing for CTF in low double digit or 10%-12%, and for PendraCare, because of the Middle East situation, and their exposure to that, I think we are restricting the guidance.
Okay. No worries, sir. Very helpful, and all the best.
Thank you.
Thank you. Next question is from the line of Sidharth Negandhi from CWC. Please go ahead.
Hi, Sidharth.
Sidharth, please go ahead with the question. Your line is unmuted.
Hi. Thanks for the follow-up. Just a couple of questions. On the INR 9 crore one-time cost that you mentioned in respect of the acquisitions. If you could give us some color around what that cost was. That was question number one. Question two was, if I had to deduce basis the 50/50 split in Europe and rest of the world for your Q 4 sales for CTF and PendraCare, that means the rest of the world sales in Q 4 may have a slight de-growth. Is that the right inference? If so, could you share where that impact primarily was? That was question two.
I think the acquisition cost question, Sidharth, is basically these are transaction-related costs, so payments to advisors you have to do for undertaking the acquisition. That's the cost. I think on your question. You mean, you're mentioning sequential de-growth or year-on-year you're mentioning?
Year-over-year. Basically, looking at your INR 65 crores split 50/50 into Europe and rest of the world and keeping that base. Europe seems to be more flat on Q4 FY 2026 versus 2025, rest of the world seems to be a minor de-growth.
Yeah. Sidharth, I think if you want to understand that it's a B2B business, 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 business is to be looked at from a full-year perspective. These quarter-on-quarter variations can always happen in which geography we are selling the product.
Got it. Sure. You had mentioned on the one-time cost being certain regulatory and employee costs. Is there already some manpower rationalization cost savings that one can expect?
No. These were basically costs which were just accounted for at the end of the year in Q4 , and which impacted the Q4 numbers. There is no manpower rationalization being done in any of these entities.
Got it. On CTF, just wanted to understand, you mentioned EUR 17.5 million this year. In the acquisition call, it mentioned about EUR 17 odd million in 2024. Was that performance or?
Yeah. It was a flat performance, and it was primarily because of one of the tenders that they had bid, one in the LATAM region, was canceled and was pushed out, and because of which they lost a certain revenue in last calendar year.
Sidharth, does that answer your question? We will take the next question, which is from the line of Girish Jain from KJMC Capital. Please go ahead.
Am I audible?
Yes, Girish. I can hear you very well, sir.
Thank you very much, for taking my question. In the opening remarks, you mentioned that FY 2026 was a year of transition. I presume you're referring to the move from product-focused to a therapy-focused approach.
That's correct, Girish. You have actually understood very well.
You also mentioned about the breakup of the segment revenue. I think you mentioned infusion vertical has gone down to 52% and neonatal up to 11%.
Yeah.
I could not capture the other percentages between cardio and onco.
These are onco, cardio, very new businesses, so we don't specifically call out those revenues. The whole idea is that company at one point of time was doing 65% business on infusion. We are trying to deal with that and add more products in the other product categories. I think that is really helping us to grow the business globally and also improve some gross margins. That's the whole idea. We don't call out those numbers specifically because confidentially we don't want to share what company's doing, and that information goes out publicly.
Safe to assume that infusion as a percentage of the overall revenue will still be coming down, even if it may grow on a standalone basis. As a percentage of the overall infusion may come down and the other segments may go up, and thereby pulling your gross margin higher?
That is our core business. We think that it will stay around that 50% level, infusion, because that's where Poly Medicure today, if you see, one of the products we manufacture, IV catheter, we have almost global 11% market share on that product. It is 6 million or 600 million doses. That means we have a global excellence on this product. There are hardly any companies in India which can claim a 10% global market share on any single product, we have that today. I think that still remains to be our core business, all accessories we produce, we have a global excellence.
We have a lot of patents on that product technology. That will be there. As we move onto the higher price segment, when you look at orthopedics or cardiology, the price per product is very high. That infusion, which is let's say INR 10, INR 15, INR 20, these products are thousands of INR or sometimes north of INR 20,000 also. That is how the revenue mix is changing.
Hopefully once the raw material price becomes normal, then we can expect some expansion in the margin with this change in the revenue mix.
Today, we are calling out those margins. If you see the guidance we have given for India business still at around 25%-27% EBITDA margin in spite of all the headwinds, what you see today. Overall, we have guided for 23%-25%, that we know that the international businesses operate at lower EBITDA margins. We are still guiding in these ranges because we know, and all these have been accounted for based on the current crude price level.
If we see some improvement in crude price level, let's say in 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%. Yes, we will try to deliver at a higher band what we have delivered in the past year also in FY 2026. We delivered the numbers at a higher band of between 25% and 27%, we delivered at 26.8% EBITDA at the standalone level.
Thank you. Just a related question on the margin. I am sure there must be a strategy which maybe you can highlight on how we plan to increase the margins in the company, which we recently acquired, CTF and PendraCare.
Girish, it's a good question. What we are trying to do is, we're trying to bring in a lot of synergies. 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. Also some part of manufacturing, we will probably ship to India at some point of time once we have all the regulatory clearances to do that. All that in the long run will help us to See, currently these companies would operate, let's say, around 12%-14% margin. That is what we anticipate. I think in next two, three years, we could see that improvement going to around 18%-20%.
Okay. That's wonderful. Thank you and all the best.
Thank you, sir.
Thank you. Ladies and gentlemen, that was the last question for today. With that, I now hand the conference over to Mr. Himanshu Baid for closing comments.
I'd like to thank all of you for being on the call today and hearing our updates on the company. Let me assure you again, we are in medical devices, healthcare business, it's bound to grow. Last year was a challenging year. Of course, again, a lot of strategic planning went in last year in terms of acquisitions and CapEx spend. I think in terms of infrastructure today, the company has one of the best infrastructure. Some of you visited plant already know that Poly Medicure has one of the best infrastructures in terms of med tech manufacturing. We continue to build very strongly. As we are seeing more and more registrations coming through in many countries in the current year and also in following year, we'll see our business increasing globally. In India also, we are pushing hard.
In a lot of these corporates today, the brand is very well-known. People see this brand as a quality product, it has taken quite a while to do that. I think we are very safe space, I can tell you that. I'm pretty sure that once you see our performance, which we have 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.
Thank you. Ladies and gentlemen, on behalf of Poly Medicure Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.