Poly Medicure (NSE:POLYMED) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Poly Medicure Limited q two FY twenty seven and a half year FY twenty seven 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. Today on this call, we have with us the senior management team of the company represented by mister Himanshu Bayt, the managing director, mister Naresh Vijaya Varghia, CFO, mister Rahul Gautam, president, strategy and corporate development. I would now like to hand the conference over to mister Himanshu Bayt. Thank you, and over to you, sir.

0:46 Thank you very much. Good evening, everyone, and I welcome you all to q two and h one FY twenty seven earnings call. I sincerely thank all of you for being here today. Before we get into the financial performance, I want to highlight few strategic updates since our last earnings call. We are on track to optimize many new our subsidiary in Brazil. We had mentioned in our last call that Mr. Ranand Roca has joined as CEO of the company, Poly Medicure, Brazil operations. We have also started dispatching our goods for shipments of Brazil to the new subsidiary in October. It is a vital step for us to service our customers in Brazil, which is one of our key markets. We also established a direct presence in The UK. This has been done to capture new opportunities under the India UK FDA agreement.

1:37 We are already working on three important projects and hopefully the first project will go live in quarter one. The second one the quarter four of this current financial year, the next one in quarter one and then the third one is anticipated in quarter three of the next financial year. So we have three modern new projects going on other than what we are currently doing in The UK market. So these are some important initiatives we have taken. We also see similar opportunities in other parts of Europe under India, EU trade agreement, which is going to be operationalized soon. So we are building, working on building some direct presence in some of the key markets in near future. So these are some of the important initiatives I just wanted to call out early. Now on the financial performance summary, starting on our standalone performance, it remains a core for the group. For the half year revenue was INR919 crore, up 15% with domestic revenue of INR318 crore going by almost 20%, international revenue of INR $5.95 crores going around 25%.

2:41 Gross profit was INR $6.45 crores, up 17% with the margin expanding by INR 111 crores to 70.1%. Operating EBITDA was INR $2.55 crores, up 20% reflecting operating leverage in the business. Profit after tax was INR 180 crores. For the quarter, revenue was INR $4.88 crores, up 17% with domestic revenue at INR $170.72 crores growing 22% and international revenue at INR330 crores growing at 15%. Gross profit was INR136 crores reflecting a gross margin of 68.9 with an absolute growth of 16%. Operating EBITDA was INR134 crores with EBITDA margin of 27.4% with an absolute growth of 20%.

3:27 PAT for the quarter was INR92 crores. Our domestic business continues a strong growth trajectory with a growth of 22% in quarter and more than 19% for the half year, broadly in line with our guidance of around 20% given the beginning of the year. Taken together, we are seeing high growth across all verticals, not only established verticals like Infusion, Therapy and Blood Management, but also on the newer verticals. On export business, this is particular attention. International revenue grew by 15% in quarter two versus 10% in quarter one, reflecting improving growth trajectory. Export revenue grew by 12.5% for the half year once we add up the two quarters. And we are confident that the revenue recovery that we had spoken about earlier showing up consistency in the numbers.

4:12 In international markets, have added 30 new customers in last six months, deepen relationship with existing customers by increasing our share of revenue and cross selling new products to them. On the gross profit front, our gross margins increased by 111 bps to 70.1% in H1 with gross profit growing around 17%. As you may recall that in the beginning of the year, we had guided for an impact of 200 bps to 300 bps on gross margin due to increase in raw material prices on account of ongoing West Asia prices. We have effectively mitigated our risk by proactively managing inventory, taking calibrated price hikes and focusing on selling high value products. We reported a PAT of INR180 crores in H1, reflecting a margin of 18 a margin of 18%, for Q2 the PAT was INR92 crores reflecting a margin of 18.1%.

5:07 Coming on the consolidated picture for the half year revenue was $0.06 crores, up 31%. Excluding the impact of acquisition organic consolidated revenue grew by 14% led to continuous strong growth in India and Europe which grew by 1929% respectively. Gross profit was INR793 crores up 36%. The margin expanding by two seventy bps to 71.7% as the better margin profile of acquired businesses and greater contribution higher value added products continue to lift Group's gross margin. Operating EBITDA was INR266 crores, up 19%. Profit after tax was INR180 crores on H1 basis. It is important to note that H1 operating EBITDA of INR266 crores also absorbs the setup cost for our new U. K. And Brazil subsidiaries.

5:55 For the quarter, consolidated revenue was INR581 crores, up 31%. Gross profit was INR407 crores, up 32%. Operating EBITDA was INR139 crores, up 20%. PAT profit after tax was INR95 crores. Let me give you a quick update on each of the business segments. Infusion Therapy grew 11% to INR542 crores in H1, a 12% to INR280 crores in Q2, with domestic growing in the segment 20% both in H1 and Q2. Orthopedics contributed to INR 92 crores in H1 and 43 crores in Q2, reflecting consolidation at CTFE. The new business recovered well growing 7.5% to INR94 crores in H1 and 20% to INR51 crores in Q2. Despite the continued dumping from Chinese players, our dialysis machine business continues to scale. We have cumulatively sold now approximately four fifty machines till date.

6:54 We are still waiting for the result of the anti lumping case, which we have filed, which was filed in end of June. It's been four months, we have been pursing with the government. And I think we are seeing some movement there. Hopefully in few months, we should be able to see some action from the government on this issue. Cardiology revenue was INR56 crore in H1 and INR27 crore in Q2, that's why PentaCare acquisition. Clinical deployment is improving month on month. As in October, we have implanted close to 18,000 duraluding stent. Our 2,000 patient pacifier DL clinical registry has enrolled eleven fifty patients with full enrollment targeted by end of FY twenty twenty seven. We've also launched IVL, minimally invasive technology that uses sonic pressure wave to break up calcium in heavily calcified arteries.

7:40 This new product launch was done in August in current financial year and hopefully we will see the revenue taking up from this business also shortly. The other segment grew 23% to $3.17 crores in H1 and 26% to INR 173 crores in Q2. With broad based growth across critical grade translation system etcetera. Liquidity position and CapEx. Turning to our balance sheet, our liquidity remains strong at INR839 crore as on September 30 against consolidated debt of INR377 crore net cash position of INR460 crore. This gives us capacity to keep backing our strategic growth and growth oriented initiatives. We spent INR124 crore on CapEx in first half of our annual guidance of INR225 crores. Out of this INR110 crores in India business and INR15 crores in overseas business.

8:32 Forward looking guidance, now let me connect to our forward looking guidance for FY twenty twenty seven. We are reaffirming the guidance we have shared previously. Importantly, based on our Q2 performance, our annualized revenue run rate is already close to what is required to achieve our full year guidance. On a consolidated basis, we maintained revenue guidance of INR 2,300 crores to 2,400 crores. On a stand alone basis, 1,900 crores to $19.50 crores with domestic growing 20% and international growing 15%. We are increasing our stand alone EBITDA margin guidance from 25% to 27% to 26% to 27.5% for FY twenty twenty seven on improved performance. For consolidated business, are maintaining our EBITDA guidance of 23% to 25%. Our CapEx guidance also remains the same between 200% to 225%.

9:17 In summary, H1 and Q2 FY twenty seven numbers have reaffirmed the fundamental strength of our business model, diversity of our business across regions, customers, therapies that has ensured our business continues to grow despite geopolitical challenges. Our ability to improve EBITDA margin despite headwinds of raw metal price, freight cost increase reflects the inherent resilience of the business and its pricing power. Strong comeback in European business for us in this year reflects strongly on our brand presence in that core market. This is extremely important given Europe is a core part of our business. I remain extremely confident about the future potential of our business. We are aggressively working to go beyond the vision of doubling the revenue we have set for ourselves under POLYMED 3.0.

10:04 Again, thank you very much for your trust and your time. I now hand over to the operator and we'll be happy to take your questions. Thanks again. Thank you very much. We will now begin the question and answer session. Tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is assembled. Participants who wishes to ask a question, please press star and one now.

11:40 First question is from the line of Siddharth Nagandhi from CWC. Just wanted to understand on two aspects. One, organically, what was the growth in Europe and rest of the world? And on PendraCare and GTF, in terms of their own growth, what was their organic growth? And how are you seeing some of the geopolitical headwinds that were impacting their growth now play out? And, know, the impact that you had on your own Middle East business, how are you seeing that play out? That is one. The second was you saw strong growth on the critical care business. Is that coming from domestic markets?

12:29 Is that coming from Europe? Where where are you seeing the growth? And third is on US. If you could give us some color in terms of, you know, what's what's the early traction? Where are you? What's the GTM? Some some color on that might be helpful. Yeah. Those are my questions. Thanks. Sure. I I think on the organic side, we have put out the presentation also which provides data on region wise growth organically, which is excluding the impact of the acquisition. So if you look at that, our Q2 European business has grown at close to 40%, which is on the back of Q1, which has also grown quite well, but Q2 has really come back strongly. Our ROW market is down 7% in quarter two, reflecting the consistent geopolitical challenge that we're seeing because of wet tissue war. On a H1 basis, our Europe business has grown at 29%, while the ROW markets are down 1.8%.

13:30 So I think as we had called out earlier this year, we expected Europe business to come back strongly, which is very clearly getting played out. ROW market, because of the current challenges due to logistical and freight costs, which have gone up, is creating pressure on growth on the ROW markets, primarily in the Middle Eastern region. To your next question on the growth of the Pendra Care and City Air businesses. So Pendra Care business this year has still whitening until September has grown at about 10% as compared to on a year on year basis. CTF is up about three percent to 4% on a year to date basis between April and September.

14:18 And given the work that we're doing on integration, we expect that growth to go up over the next few years. In terms of your question on Critical Care, I think the business on the Critical Care segment is growing well both in India and in Europe. As you might know, our subsidiary in Italy, Plan one Health, primarily runs the critical care business and that business is also witnessing double digit growth. While our domestic business, which we set up the team about one years point back and it took time for us to develop the product and build relationship with the customers in India, that business is really starting to take off in the Indian market. Got it. And some color on the yes, go ahead, please. Sorry. Sorry, go ahead and then I'll come to U. S. No, no, that's what go ahead, please, The U. S.

15:13 Yes. On the U. S. Side, we got one more product approval in 05/10. It's an irrigation set which we got recent approval of. And business is starting to grow quite well in U. S. As well. The project that we have started, we had come to a standstill last year because of that tariff issue have picked up pace. And U. S. Is growing quite well for us in the current year. I think we will achieve the guidance from The U. S. That we have given for achieving about 7,000,000 to $8,000,000 sales at the group level from The U. S. Geography. That's useful. Just wanted to understand two additional follow ups on CTS, where do you think the challenge has been? And even on Fender Care, right, if I recall, right, if this was growing in the mid teens earlier, so where is the challenge on that? And the second one is on ROW, you know, what... Given that this is really an essential, right, is there a reason why growth is still not picking... I mean, somewhere this is an essential product and therefore growth somewhere needs to pick up agnostic of the logistical challenges, right?

16:32 So let me take that one by one. On Chile, the primary challenge in calendar year 2026 has been because of delay in tendering primarily in the Italian market, right. As you might know that a lot of the business is public tender driven in Europe, specifically in Italy. And there have been delays there because of which the business has not gone as well in Italy. If you for City Gear growth outside of Italy, whether it is U. S. Or the larger Latin region has been in line with our expectations. Hence, primary disappointment in City Gear has come from the Italian region. With respect to Pendrake, I think as you guided in the past, this asset on its own can grow in high single digits and with the integration with India and cost saving projects that we're doing, we expect it to go back to mid teens. But with Pendrake, the biggest challenge has been its exposure to Middle East.

17:34 Almost 20% of the revenue in last year came from Middle East. And given the challenge there, business effect is come to stances because within Middle East, they also had a reasonably large exposure in the Iranian market. So I think that's really been the reasons why these assets have not grown as well as we expected them to. On your question on the nature of the product and the fact that they are essential in character, you're absolutely right. The demand for the product continues to remain strong from that region. The biggest challenge is the fact that logistically to fulfill that demand is becoming very, very difficult for two reasons. One, availability of containers has been a challenge. Secondly, obviously, with all the issues going around Hormuz, getting products to the ports is a challenge. And thirdly, the freight costs have also gone up, right, which basically means that customers tend to just wait it out and say, okay, the freight rates will come down, they'll place the order. But from a demand underlying demand perspective, that remains quite strong.

18:50 Got it. That's useful. Thank you and all the best. Thank you. Thank you. Next question is from the line of Harish Jen from DB Investment Advisors. Please go ahead. Hello. Am I audible? Yes. Sorry. Yes. So thank you so much for the opportunity. My question is related to the year of business, right? So we have instead of growth of around 40% in l... And in f l twenty six, we had to give the update this issue. Sorry to interrupt you, mister Jain, but we are unable to hear you, sir. Your voice is breaking. Can you please come into a good reception area? Hello?

19:40 Mister Chen, yes? Yeah. So I was saying we have registered a 30% growth organically in the Europe business in. And F twenty twenty six, we had sales challenges related to some inventory issues and dumping from China. So can you just elaborate on what is driving this growth and how sustainable it is for the European market? Yes. So you're right, Pavesh, that last year was a tough year for the European business. And we had called it out reasons for it, over inventory in the year prior to that, the challenges of tariffs as well as the dumping, right. We had already started working last year on deepening our engagement with the customers, right, adding more customers, doing more clinical engagement with the customers.

20:32 Some of that benefit is starting to accrue now. As Himanshu also mentioned, we've been working on many projects in the larger European region, which some of them are starting to play out and some will play out in the next year, in fact, four and next financial year. And so I think the fact that we've been able to gain share in our existing customer base as inventory situation normalizes, the new projects that we're doing, plus the new customers that we've added, about 28, 29 customers that we've added in the first half, all of those things are helping us in driving the growth in European region. And we believe that the opportunity set in Europe is very much larger for us, and that's why we believe that the business can continue to grow organically in the European region at very, very attractive growth rates is very strong.

21:23 So this growth is driven by inventory normalization predominantly? No, it's a bunch of multiple things. As I said, as we engage deeper with our customers last year because we started to see challenges there in terms of bringing more clinical side of side of the story with them. That relationship building plus new customer addition, all of those factors have contributed to the growth. Okay. And the status of Chinese supply, is it shift there or it or has it normalized kind of situation? Yes. Mean, I think, see, dumping is not a medical device issue. I think in general, there has been a lot of rhetoric around the fact that despite tariffs, they've been able to grow their export business quite significantly.

22:12 We are taking steps which are in our control, which is building more customer relationships, deepening the engagement, introducing new products, right? As we've mentioned, we have multiple products which were under registration. Some of them have come through and are starting to get commercialized. So even the higher value added segment that we operate in, there we are able to continue to remain competitive and grow, keeping in mind all the clinical engagement we're doing. Okay. And just one more last point, we have 30 new product registrations which are coming up for registration in that market. Okay. Okay. And just one more question on the subsidiary. So you have like elaborated on the challenges faced by the Citi and the PANDACAIR subsidiary.

23:08 So my question is firstly on the what is the sustainable growth rate we can look for these subsidiaries? And secondly, the subsidiary margins have been operating at around 4% to 5%. It's a different than the console numbers. And we I think these are operating at around 12% to 15% kind of our margin band. So what sort of recovery in margins we can hope for in these businesses and in what time frame? So Bhavesh, on the growth point, as I mentioned earlier in the call, these businesses growth sort of potential was in the high single digits on their own, right? They were small assets operating in Europe, right?

23:55 So on their own, they can grow at between 8% to 10% sort of on a secular trend standpoint. From with the initiatives that we are taking with them in terms of bringing more procurement synergies, supply chain synergies, distribution synergies and product development synergies. We expect that to go back go into the mid teens from a growth perspective. Again, just to clarify, some of most of these initiatives have long lead time because all of them need to be go through the regulatory approval. So they take sometimes they take between one to three years. A lot of the work has happened the synergy side in the current year in calendar year 2026. And hopefully, we should start seeing benefits of some of those initiatives in the upcoming financial year.

24:45 To your question on the margins, you mentioned that the margins for these subsidiaries at 4% to 5%. It's actually when you look at when you're just doing the subtraction of consolidated versus the stand alone, that's when you to 4% to five percent EBITDA margin. If you look at the EBITDA margin of the three subsidiaries separately, right, Standard Care currently because of the challenges on the revenue side is currently making losses at the EBITDA level. The other two subsidiaries, which is which we acquired last year and Plan one Health are operating in mid teens in terms of EBITDA margin. So in the consolidated, we also have other subsidiaries, which are currently being in setup situation, right? So as Himanshu mentioned during the call, the EBITDA that you see in H1 also includes the setup cost for Brazil, U. K. And in some aspects even U.

25:36 S, right, because that is still under operationalization stage. So those are the reasons which is that's why you're seeing 4% to 5% when you just do a subtraction between stand alone and consult. Okay. So any outlook on recovery for PANDACAM clients? Yes. So I think with the projects we're doing with them currently, we're expecting some of those projects to start getting implemented from Q1 of calendar year twenty twenty seven. And those will start accruing. They've also got one big breakthrough with a large OEM, revenue for that should start accruing to them from calendar year mid of calendar year 2027. So I expect that calendar year 2027 or FY 'twenty eight, we should start to see recovery of EBITDA margins from PendraCare as well.

26:33 Okay. So just one more question on PendraCare. So when we acquired this subsidiary, so it was operating at around 12%. So this 14% margin kind of. So what led to this subsidiary like going into EBITDA losses? Like can you explain what operational challenges? Two things happened. One, because of the war that's going on, the raw material prices have gone up in general, which has led to their increase in raw material prices. Secondly, and this is probably the bigger impact because you have to understand that these companies are fairly small, right? 10,000,000, even small minor changes lead to significant just from a margin standpoint, right? Just when you look at the margin percentages, because of the loss of revenue in the Middle East region, which was close to 20% of the revenue of 2025, those are the two primary reasons I will say why the margins have gone down. Fundamentally, there is nothing that has changed in the business. The products continue to get sold in other markets. In fact, we are gaining more customers, including we have grown the one of the large OEMs where we have a relationship for over fifteen years has grown at about 40% this year, right? So some of the revenue loss has been recovered from other customers, but when you have a 20% fall for a business, which is 10,000,000 in size,

28:04 the margins do get impacted. Thank you. Next question is from the line of from MyThird PMS. Please go ahead. Sir, may I know the lower and upper range of tender values in Europe and UK for the kind of medical devices we deal with? Sorry. Shriam, can you please repeat your question? May I know the lower and upper range of tender values in Europe and UK for the kind of medical devices we deal with? That's very tough to answer on a 15,000,000,000.

28:49 Yeah. Maybe 1,000,000,000. Okay. Understood. Every... We have a different procurement process and there's... Like, some work on GPU, some work on tender systems and because we have a wide product range. So I think total available time in Europe could be exceeding few billion dollars actually. How many dialysis machines have we sold in H1 FY twenty twenty seven? Over 300. Sir. All right. Thank you, sir. Thank you. Next question is from the line of Simran Thakkar from Bees Capital.

30:00 So so thank you for the details and insights on the Pendra care and efficacy and what are the the problems that they are going through. But, also, one color that I wanted on this list earn out milestone. Right? Because of this, we have booked an exceptional item of INR 96,000,000. So if you could just detail out what milestone was missed and why was it the case, that will be helpful. Yes. So, Simran, if you go back to our investor presentation when we did the acquisition for Fenrir Care, we mentioned that there are certain projects for which we had agreed on an earn out structure with the selling shareholders. One of the projects working on, I mean, in medical devices, as you know, a lot of projects which are in development stages tend to not cross the commercialization threshold, right? Because the company does, in addition to selling their own products also does a lot of contract development manufacturing work development and manufacturing work with other customers.

31:04 One of the projects did not pass the regulatory and clinical trials and held that project was a shell. And because of that, we reversed the contingent consideration, which we had included in our financials. Understand. Helpful. Sir, on second thing, on the gross margin front, wherein it's a quarter on quarter reduction of some 73.4 to 70.1. So the one is how much was the reversal of Q1 inventory gains that we had? And versus the R and M inflation, if you could just dissect these two? And second part two, this is what is your FY 'twenty seven gross margin outlook overall? Yes. So again, in quarter one, our margins had expanded for two things. One, as we had called out, as we started to see raw material prices increase, we took pricing actions proactively to push out some of the cost increase to the customers, right? And we were successfully able to pass on the price hikes about 4% to 5% in quarter one.

32:14 Because we were adding inventory, which was low cost basis in Q4, we were able to increase our margins in quarter four. Some of those gains are now starting to get normalized, right? And that's why you see on a quarter on quarter basis, the margins have come down. Having said that, instead of a 200 to 300 basis point margin called out at the beginning of the year, we're able to maintain margins close to our historical trend of about 69%, which I think has been good performance. And we expect the full year to be in the range of 68% to 69% from a gross margin standpoint. I understand. So the first question is on the U.

33:01 S. Business. Like you mentioned that we are targeting INR 8,000,000 to INR 10,000,000 by the year end. But then seeing The U. S. Policy changes of the elections that are going on. We can't hear you well, actually. Very hard to understand on the call. I understand. Am I audible now? I'm sorry for this. Yeah. If you could just go a little slow. Okay. Sure. Sure. Sir, on The US business, like you mentioned that our target is 8,000,000 to 10,000,000. But looking now in... On the policy changes, right, due to elections, etcetera, do we stand off the goal, and how do we also see various 15 plus approvals and 10 plus more in the pipeline S. Plan?

34:02 So I think, Sameer, it's too early to call out what is going to happen in The U. S. After this election. But I think the good part is that we have a lot of products in the pipeline for five ten approvals. As Rahul mentioned, have approval recently, and we have guided 7,000,000 to $8,000,000 this year. And then going forward, we'll continue to increase and we have mentioned clearly that next three, four years, we'll build up to between 15,000,000 to $25,000,000 and that's the plan. And for that already a lot of new development is happening in terms of product side, specifically related to U. S. Market. And we are also working we are doing some new products of the undergoing testing requirements in The U. S.

34:48 Labs. And once those testing requirements are fulfilled and we hope to get approval for those products also. So I think that remains to be our focus right now. And we'll wait out for the next few months how things change in The U. S. And probably in the next quarter, we'll be able to maybe give more clarity what we see changes happening in The U. S. With the new changes that happened recently. Sure. Thank you so much. That's it from my side. Thank you. Next question is from the line of Rashi Shetty from Dollar Capital. Please go ahead. Yes. Thanks for the opportunity. This is Rashmi Shetty from Dollar Capital. So just on the gross margin again, you mentioned the guidance is around 68% to 69% for the consolidated level, right? So you expect that in the second half due to the inflationary issues, cost inflation and all, the gross margin will be soft in the coming quarters?

35:52 No. So, Rashi, that guidance was for a stand alone basis. On a consolidated basis, we should still be in 70% plus category. 70% plus category. Understood. And on the debt part, I've just seen that the long term debt has been has come down, whereas your lease liabilities has gone up. So if you can explain that part. And the short term borrowings, there is a spike in the overall number. So will it be going to the March levels again at the end of the year or it will be on an increasing mode only? Yes. So I think the working capital debt or the short term debt is primarily increasing because of the increase in working capital, right. As the business has grown and the working capital has increased, so the short term debt has increased in proportion, right. So I don't see any difference in the trend there. The lease liability that you highlight has gone up because we moved the underlying subsidiaries to IFRS accounting from start of this financial year.

36:58 So their rental cost, which was getting expensed off in the P and L is now getting accrued as under IFRS 16 or Ind AS 116. Got it, got it. Sir, I understood that. But any further repayment in the long term debt is expected? Or it will be at the same level at the March end? Long term debt actually on the balance sheet at a consolidated level as well. One of our subsidiary in Italy has long term debt and that has a plan agreed. But that amount in total is, I think about 6,000,007 million dollars at max. And that's getting repaid over the five years. So it should be between yearly repayment is between EUR 1,500,000 to 2,000,000. EUR 1,500,000 to EUR 2,000,000. Okay.

37:48 Thank you. That's it from my Thank you. Next question is from the line of from Clockwind Capital. Sir, in the renal segment on the dialyzer side, you have been facing significant competition from Chinese players. So what is the status on that considering that you've grown around 20% in this quarter on a Y o Y basis. Does it imply that the competition has reduced? This is my first question. So I think let me answer that. Basically, as you know, we have filed an antidumping case and government had initiated that process and which is a public knowledge.

38:36 So it's already been four months now. And I think what we hear now is government may take some action on this. So there is some movement in that direction, but these issues take longer than what we think. So we are just waiting it out. Hopefully, is some relief coming to us and I don't know how it's going to come, but it's a matter of time. On the competition, while the competition is still there, nothing has changed, but I think one good thing which has happened and I think I wanted to highlight that also which I didn't mention in my opening comments that there is a recent notification from Government of India, DGHS to use medical devices only one time. And I think this is a very big thing which has happened because currently dialyzers were used four to five times. And now with this notification, I think most of the dialysis chains will be now forced to use it only one time. Because earlier they were able to leverage this cost by using the same product four to five times, but it's only designed for single use. So now this notification has been issued by DGHS and that's a very important step. So I think this will also increase the demand for the product in the long run. So I think what we are seeing is that once this is implemented fully as all states are obligated to take this action and everybody has to follow this, all hospitals will also have to follow this. So I think this will lead to a demand, but I think it will take some time to build up, but we are also pretty

40:06 hopeful that this is a very important notification which are issued, which is in our favor, which help us to sell more products to dialysis centers. Sir, this new policy which has come up, when is it supposed to be implemented on the ground? Immediate effect, they have said immediate effect, there is a DGHF, you can Google it. Was issued by DGHIT, the General Health Services Government of India sometime in end of October. If I remember correctly, should be twenty second or October 23. And this is from immediate effect because today the biggest challenge with the patients are facing an operative reuse of devices and not properly sterilized and also acquired infections are actually increasing rapidly in hospital because of reuse of devices.

40:54 So I think this is something which has to stop and I think government has taken some initiative. Let's see how it is implemented because India is a big country and implement the human take time or at least there is a direction which is set. Got it, sir. And sir, you had plans to take the renal business outside India as well. So where are you on that front? I think firstly, we are looking at Southeast Asia. I think that's the market we're developing. So we are working with some right now consultants to help us explore that possibility. And the first market would be Southeast Asia market where we'll go. And so when do the revenue start outside India in this segment? It depends on the registration process cycle of one to two years. So we already initiated in some of the market. So as in when we get registration, but I think India is part of the bigger opportunity because what we are doing is full import substitution in the country. Still 90% market is import driven. So I think for us that is a big opportunity where we can replace that with our product and this is a portion. So I think and especially for machines, we need to set up the whole service setup and network and space part and everything And so I India, are very well positioned to do that.

42:11 So initial maybe next twelve to eighteen months will be more focused on India, right? Got it, sir. Thank you. That's all from my side. Thank you. Next question is from the line of Ashish Tee from UTI Asset Management. Please go ahead. Yes. Thanks for the opportunity. Sir, your acquired businesses, you obviously, you said your standard margins are 27%, 28%. When do you expect your acquired business margins to trend above 20% mark? How long would it take? Yes. So I think, Ashish, as you called out earlier, these companies CTF is already operating in mid teens, right, 14%, 15% EBITDA margin. Penrite Care, before the crisis, were operating in 1011%, 12% margin, right? So I think once some of these crisis and raw material crisis come down, we should have Pendrakir back to similar kind of margin range.

43:09 Our even three to five year target is to take these companies to close to 20% EBITDA margin and which is what we're working on. This will come through the synergy projects that we are running with them as well as the benefit of operating leverage as the business scales up from the current levels. Yes. So in the overall scheme of things at console level at least since you're guiding for twenty three percent, 25% margin, we should not go below the lower end of the band, right, in the next two to three years? Yes. Mean, I think we would expect it to obviously, we'll give the guidance as we go closer to the end of the financial year. But our aspiration is to obviously keep improving our consolidated EBITDA margins also as we grow the business.

43:55 Great. I think, Sanjay, so what is the Sorry. I'm sorry, mister Ashish. Your voice is breaking, sir. Hello? Yes, mister Ashish. Yeah. Sorry for that. The 500 crore CapEx guidance, what was the facility status? And we have given a broader guidance of doubling our revenues in the next five years. So are we staying the course? Any update on that would be helpful. So the CapEx guidance for this current financial is between INR 200 crores to INR $2.25 crores. And of course, we already laid out very clearly that by FY 'thirty, we'll double our revenues as the plan.

44:41 And we're already, I think, on that path. So a lot of CapEx have been doing have been currently undergoing to balance those activities in different plants and capacity. So we are already working on it and some lot of these new projects also are coming in where we're expanding our orthopedic and cardiology business, which we started just one, one point five years ago. So I think that a lot of that is happening also as we speak. Yeah. Great. And lastly, so India still does not have a dedicated med tech ministry. And since you are also on the cardiac stents, you obviously are manufacturing all those products. Yeah. Any chance as far as the industry representation to the government is concerned, would you guys have had any sense of whether there would be a dedicated medtech ministry in place?

45:29 That's a question which I can't answer honestly, Ashish. But yes, currently, the pharma ministry is taking care of, which comes under chemical and fertilizers, which has oversight on the medtech industry. But the good news is that maybe we will hear next maybe government is already working bringing out additional POI scheme for med tech sector because the first POI did not work well and because of the shortage of time and it came during the COVID period, so many companies could not meet the expected targets. So there could be something there. And then also there is a scheme for R and D promotion in MedTech. So there are some things which are happening. So on the policy front, I think government is very clear that they want more make in India products to happen and they want to reduce the import.

46:21 And I think we will see some action from government as time progresses on that front. Great. And finally, since you're planning to double your revenues roughly three to five years down the line, as far as the portfolio mix is concerned, how would you see infusion contribution planning over the next three, five years? Yes. So I think our infusion business growth is also expected to remain strong because a lot of our U. S. Expansion out of India is infusion driven, right? So as the U. S. Business expansion happens, infusion will also continue to grow. I think we will be happy if the Infusion contribution remains between 45% to 50% over the next four to five years.

47:07 Great. That's good to know. Thank you and all the best. Thank you. Thank you. You. As there are no further questions from the participants, I now hand the conference over to Mr. Himanshu Bayt for closing comments. So thank you again, everyone, for your keen interest and very relevant questions you've asked. And I think as we have mentioned earlier, I think the Q2 numbers are reflection of what we wanted to achieve during the whole year. And I think next two quarters also we are striving to achieve similar or a better growth.

47:53 And hopefully, we are very sure about meeting the expected range of EBITDA and revenue for the year. And I think this has been a big year for us in terms of adding new customers and also new products. And a lot of these will become more productive in next year where we see almost 30 new products getting added in European markets through new registrations, which we are going through. And then Brazilian subsidiary picking up and UK business coming up where we have already established subsidiaries. So a lot happening right now. So hopefully, will see much better performance in coming years. Thanks a lot. Thank you again everyone. 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.