The first question is from the line of Rashmi Shetty from Dolat Capital.

Congratulations on the good set of numbers. So just on capex, again, you mentioned that the investment for the capex would be around the similar levels of FY '24 that is roughly around INR250 crores this year. So generally, this INR800 crores, we will be spending phase wise right every year?

So basically, the INR800 crores we are planning to raise because we have done our first capex cycle of the last 3 years through the first initial QIP, I think the company has kind of grown almost 2x in the last 3 years. And we are in that same trajectory of growth. And with whatever we are seeing with the new businesses which we are developing today, so there's a lot of technology investment, which has to come in. And we have to fast track that investment so that we are ready to bring the products much faster in the market. Otherwise, if we go through our normal capex cycle, then the manufacturing and the new technology integration will get further delay.

Sir you said that you will be in vesting in Haridwar plant and in Faridabad, so these will be completely new facilities, right? And one more you said which I missed it.

Completely new facility, they are build greenfield facilities in these days.

So one you said Haridwar, second is at Faridabad and the third one I missed it.

Say again, please?

I missed the third one. So Haridwar, you said Faridabad you said and then 1 more plant, right?

Yes. So we have 1 more plant to be planned in Jaipur. Sorry, I missed on the call by mistake. And there'll be one more plant coming near SEZ in Mahindra, it's a BTS plant, which will be, again, augmented capacity for Indian business in coming years.

And related to our export business, if you can give understanding about the infusion therapies because they are a major contributor to your overall business. How is that performing in exports, as well as in the domestic market? And from here-on, what kind of guidance you build like what we explained related to renal profile?

See, I think renal business will grow faster b ecause of the current tailwinds we have for the business. And see, again, our vascular business, infusion business are bread and butter business, and we have a good global leadership in this category. So this will -- and as we are adding more and more products in the same category. So we will continue to grow in this business al so in India as well as in international markets. So this business has its own tailwinds in terms of new development and new capacities we are building. And again, there are new markets we're addressing today, U.S. is one of them and so on and so forth. India, we still have penetrated only maybe 10% to 12%. So we need to penetrate India more deeper. So I think all that capacity expansion, which has happened in the last couple of years, will help us to address that demand wh ich is going to come through expanded market.

So like for the annual basis for export market, we are expecting 20% plus growth, right? in FY '25.

Yes, that is correct. Export, again, we are seeing 22% to 25% growth, that is the guidance we are giving for this year. And knowing that everything remains what it is today, we think we'll surely be able to do it, but we don't know the global situation.

And last question is related to the renal segment. Then you said that it is a 35% growth sir. That means that we have clocked around INR100 crores in FY '25 is my understanding correct in terms of this?

So that is last quarter growth. Basically, first 3 quarters were muted, as you know, we were around 20%, 22% growth. Only in the last quarter, when we saw the impact of the new regulatory regime in India were first October, everything got regulated plus BIS bringing in standards. So that is where things -- and of course, there were some stocks, which is available in the market, but I think quarter 4 was something which we saw a big change and also, there's a good demand which is coming after the changes which have happened in the regulatory track business. So we are pretty certain that this year and the traction we are seeing right now the last quarter and in last few months, I think we are very sure to see it growing around 55%.

And sir, on this renal profile, can you update or do you have any info that your competitor Nipro has also started selling the indigenous machines in the India market?

No, I'm not aware of this. They currently import the machine from Japan.

Yes, yes. but they were also one of the approval in the PLI scheme, so that..

PLI, they are making more dialyzers than the machine. So they are making the consumables, not the machines in India. But anyway, there could be more co mpetition doesn't matter. India needs 4,000, 5,000 machines a year, and Poly Med is only making 500 this year. So there's still room for more players to come in, to make locally.

The next question is from the line of Harsh Mulchandani from Kriis PMS.

First of all, congratulations for a great year. And I wanted to just understand that the U.S. business, like you said, good to hear the traction which is happening. This is as per your initial assessment that the initial couple of years would be slower and then we would get the larger chunk of orders which you are expecting?

Yes, exactly. Because from day 1, we'll not get that market share. So first, the products are going to few hospitals, and we receive feedback, and based on that feedback, if there any improvements should be done, we'll make some improvement changes. So before the FDA approval, we can't even send any single piece to the U.S. market. So that is now the product is in commercial usage. And as we see more and more us age happening, we will see that traction building up. So, yes initial start will be slow, but th en it will build up very quickly. And also, we are expecting more US FDA approval and the next 5 products also in pipeline right now. So it's a buildup of the whole business. And I mean we are confident that in the next 2 to 3 years, we will see that guidance what we've given earlier.

Perfect. And what could be the impact of the rece nt fee transaction on us? Could it mean more competition for us because whenever we...

Poly Med has a lot of integral strength because of its patents. And we seriously protect our turf, and we have been protecting for the last 25 years being in the listed space. So transactions were happening earlier also, will happen now also. But I think most important thing is we continue to build that momentum. And there are very few companies who have momentum in the medtech industry in India. So even the transactions are happening, the growth rate is only 10%, 12%. So here Poly Med has been growing the last 3 years if you see track record average CAGR is around 20% to 22%. And we are again guiding for 22% to 24%, again. So we have that momentum. We have the product basket. We have the technology and also, we have the, I would say, markets available where we are putting these products. So that competition is most welcome, but we don't see much competition what we are doing today.

The next question is from the line of Vishal Manchanda from Systematix.

Sir, on the cardiac and critical care markets where you are focusing in India. Would you have a number as to how large these markets are?

See the markets I just give you a number of angiographies done in India, almost 20 lakh angiographies are done in India today and most of the products used there are imported. So for us, the market that is the big size of the pie. And that is what we are targeting today that what are the catheters which are needed for angiography, balloon caterers or diagnostic catheters or guidewire or anything related to interventional cardiology. That is where we are focusing on right now. So our major focus will be on these kind of products. And then we will probably get into more, let's say, complex products going forward with radio sheets or something with a femoral sheet or something else. So that is what we are trying to build in as a business.

We are already in the market. We launched, soft launch, as I explained to you earlier. We have done our soft launch already. And now we are augmenting the capacity. Because you can't build capacity on day 1. So gradually, we are building, assessing the market size, demand and seeing what -- how we have to move on. And I think initial response has been fantastic. And I think we are accelerating our prod uction capabilities a nd capacities to grow faster in this segment.

Got it. So secondly, in the U.S. recently, we heard they have raised import duties on certain medical devices that they import from China. Any positive impact Poly Medicure could have because of the import duty?

See, the first important thing is no business should be based on momentarily trade practices. By the time we, let's say, scale up capacity and tomorrow, somebody else comes in and say, okay, there's no more duty anymore. Will it be competitive now. So I think Poly Med is an organization built on is inherent strength. The sense is of our own products. We don't compete with Chinese. So here, we are trying to build products and today we have more than 400 patents. So that helps us to be ahead of the curve in the segment. So we are focused on our segment. There are a few products like gloves or syringes where they put some duties. These are very basic products. And I think where there's very limited technology available to, let's say, put some differentiators. So we will not get into such kind of products, which are very low EBITDA margins or very low margins to manufacture. So we are very clear that we continue to get into more high technology business, which is more technical and where we'll see more innovation coming in coming years.

Got it. And then finally, on the fund raise INR8 00 crores. So would -- does that include -- so you also intend to do a INR250 crores capex this year. So is this INR250 crore capex part of that INR800 crore fund raise objective.

We oppose companies generating sufficient cash also to the fund. But I think mainly for accelerated, see when we -- when we raised INR400 crores in 2021, we were able to deploy that into accelerated capex and start for new plant. Now to start every plant, take 2 to 3 years, new plant. So it's a cycle. So we have done that first cycle of setting up 4 plants. And of course, now we'll be augmenting capacities on all these new 4 plants with more complex technologies coming in, standing in cardiology and critical care will be spending because cardiology needs lot of R&D, a lot of new development, a lot of heavy-duty equipment. So -- that is why we are investing. Plus, where we are augmenting capacity in renal space where we'll be probably tripling our capacity to look into because once you build capaci ty it takes a few years, it's not that there's a ready machine available and you can do it. These are all specially designed equipment, which are made based on your custom specifications. So it takes time to build that -- ramp up that capacity. So we are adding capex there. We are also building 3 new plants. We are also looking at inorganic opportunities, as I mentioned earlier. Today, to make a new product will take 3 to 5 years from zero to finished product and get our regulatory approval. So can we look at companies which have similar line of products, and it can complement our existing product range. So that's also where we are looking very aggressively.

Got it, sir. And sir, just one final one. Within India, if you could share some sense on the zonal mix that we would have, so North -- contribution of North, Southeast and West broadly.

We don't do that. So I'll refrain from doing it because that is not -- we don't give it our public information. And because that will be sensitive to our business, so I would not like to give that information.

The next question is from the line of Harsh Shah from Dalal & Broacha.

Couple of questions from my side. Sir, firstly, on Europe, I mean, the growth that you are seeing. So what is the major driver for growth in Europe? Is it a case where we are gaining market share or the market itself is growing at such a pace that we are seeing such number.

So definitely, the answer is second, that the market is not growing, but we are gaining market share, but the market is very huge. And we started with a few products and once there's a good acceptance with few products in hospitals, then you have a chance to add more, and Poly Med has a very large basket of products. If you've seen we operates around 12 different segments, you've seen in the corporate presentation. So now once you are in this 1 segment and the customer would like to buy other products from other segments also. So that is the expansion we are seeing in the business. So -- and all our products qualified with the European regulatory requirement. So we are seeing the traction happening in Europe and primarily in Western European markets. So our core business is in Western Europe, le t's say, U.K., France, Italy, Germany, Spain, Sweden. These are our core markets. So that is where 80% to 85% of revenue comes from.

And secondly, on China. So you did mention earlier in your comments that even some sort of China Plus One theme is kind of playing out in our advantage. So how big is China's kind of role in the overall medtech space? I mean, if you could give some sense.

To my knowledge, Chinese compan ies would be exporting close to $75 billion to $100 billion of medical products. These are different from a needle to an MRI machine and the number could be even bigger. A lot of U.S. companies are based in China, they have their own subsidiaries, and they cater to their own parent companies. So the market potential is huge out of China, which could go out of India. And what I've heard in different corridors and people talking about is that they want to move like 30% business out of China in next 2 to 3 years. And that is where I see a big opportunity for Indian companies. It's India's infrastructure, India's supply chain can cater that whole manufacturing ecosystem, I think India is in a great place to take that market share.

Got it. And thirdly, on -- I think I missed the number. What's the contribution of the renal segment in the overall top line for FY '24?

It was close to INR90 crores.

And last question from my side. So out of the QIP of INR800 crores, right? You did mention that...

I didn't mention QIP, we said fund raise. We have not finalized how we'll be doing it.

Yes, fund raise out of INR800 crores. Sir, any ballpark kind of figure or the size of acquisition you have in mind, or you would take as it comes?

We are keeping that open. We are building up. This is the right time to build a watches. And why I'm telling you that is -- there are a few things which are happening globally today with interest base staying the way they are today in the Western world; we are seeing a lot of smaller companies which have technology are not able to scale up. And we have done one acquisition in 2019. We have scaled it up. We have seen that with India's leverage as Poly Med's leverage in India, we are able to turn around this company. And now we are looking at bigger bets, we think that around the areas of transformative businesses which I've talked about that is renal, cardio or onco or critical care, there are a lot of opportunities which are going to come our way in next maybe a few months. And we would like to look at those products and categories and see what we can expand quickly instead of build versus buy, like, okay, can we buy the business rather than building and building is going to ta ke 3 to 5 years. So if there is something available, can we scale up? And that is the opportunity we are looking at.

The next question is from the line of Tanmay Gandhi from Investec.

Sir, on the domestic market, right? You had mentioned that this year, sales were slightly lower than your expectation. In the October month, we have been seeing you have addition BIS certification, right? So have you not started seeing its impact on other categories?

Yes. So definitely, we have seen that imports will -- see, there's a very clear guideline within the Government that they have to reduce imports and that is kind of hampering with Make in India today in the country. And even the PPI orders are not working because the local content, it was not clearly defined. People are using even servicing as a local content in the equipment, for example. So a lot of things are changing from the Government side. And I think -- and also, internally, we have to restructure, we are trying to bring in more talent and you add more people on the ground. We didn't add enough people last year actually. Our people addition was maybe less than around 30 to 40 in a team size of 360. So that was not enough to grow the local business. So this year, we are adding 70 to 80 people, more focus there. We are also making changes in the leadership team. I think that will also help us to go deeper in relationship building with key customers across the country. So some changes and plus renal will grow at a very fast pace now at around 50%. So overall, that will pull up the other businesses also. So that way, we are confident that this 25% growth rate that we want to do in domestic business should happen now.

And just secondly, our cost for this during the quarter has gone up, right? And the margins have also declined sequentially as well on a year-on-year basis.

Margins -- they don't decline, I think. Margins have improved.

I think for this quarter, you have done 25.5%. Was it...

So quarter 4, we have done close to around 26-plus percent EBITDA, operating EBITDA margin.

And sir, lastly, on the working capital, we have seen some improvement during the year. What could be a sustainable number going forward?

No. I think working capital, of course, there are challenges in the global supply chain. So we continue to invest more in the inventory side so that we are sufficiently covered because we have almost 200-plus vendors outside India. So I think that part is more or less covered, bu t I think it's the payment cycle, which is a little bit worrisome right now, which we are tracking very -- because globally, again, there is some constraints in payment getting from certain coun tries. But hopefully, we 'll continue to work maybe in let's say another 5% to 7% improvement in the coming year. That's the plan.

The next question is from the line of Ankur Shah from Quasar Capital.

Sir, just one qualitative question. Like Poly Med, the way it is the trajectory it is going on. I just wanted to ask, considering the competitiven ess of the industry and the size of the -- size and nature of the competition. What according to you like where according to you we would be in the quality curve in providing these medtech instruments? Like just a general question. Because, let's say, in medical, price is not only driver -- the government wants, like you mentioned, government wants as low imported goods as much as possible. But if suppose you are not able to match the quality standards then it won't be Yes. So where are we over there vis-a-vis the top competitors, which are there in the industry?

So today, we compete with top competitors. As I mentioned earlier, almost 1/3 of our revenue comes from Europe and from highly regulated markets. So that is a testimony of Poly Med's products being used in top European hospitals across the whole continent. Also, we have got US FDA approvals. So, our products, again, qualified for some of our products already see that approval, all our plants are designed like that, all the new technology which we have today is based on high- quality performance. So, we today -- and 2/3 revenues export and nobody is going to buy a product even if I give free of charge and the quality is very poor, nobody is going to buy it, as you already mentioned. So quality is a key parameter, a key benchmark for the success of a company in our industry because every product is engineered product. It's not a capsule that you're filling -- today, you're not weighing the capsule whether it is 0.3 milligram or 0.32 milligrams inside -- the material inside a capsule, but medtech, every device has to perform, and it is used by a nurse or a doctor. So here, the quality is more and more critical than even in the pharma industry. So we are a benchmark as a company and our exports are a testament to highly regulated market is a testimony for that.

Sir, interesting, can you share in the European business, what is our business model? Is it directly approaching the customers via our own sales staff? Or is it via distributors?

No, we do through distributors, mainly through distributors because we don't have enough people on the ground. We have only people in Italy on the ground, and we have people, some sales managers who are managing the business. The residences sales managers across the continent. So for us, it is more to distribution, so our model is to trai n the sales force of the distributors and then the sales force will go in hospitals and promote the product.

Sir, and the last question is on the cash flow allocation. Like I just saw we are clocking upwards of INR250 crore operating cash flow and considering the capex needs, I was just wondering, is the Q -- sorry, not QIP, but is the fund raise opportunistically timed or because I don't see any as such cash needs considering the capex programs?

So we would like to go for an accelerated capex program, which we did earlier, and we are setting up 3 new plants and even in the current plant where we have set up capacity, each plant will still consume more capex in the next 1 or 2 years, where we augment capacity of the new businesses which we have developed in the last couple of years. So the capex cycle will be far higher than even if you see last year's cash flow of FY '23-'24, the capex was much higher than the cash flow generated by the company. And then there was a requirement of working capital or whatever long-term debt we have paid them out. So, I think the important part is to -- and part of that funding -- a majority part of our funding will also be deployed for acquisitions -- technology acquisitions.

Sir, just coming to the capex.

Fund raise is not for capex, only for entirely for capex. Majority of the fund raise will be used for inorganic expansion.

I will, but of course, I'll not disclose.

And sir, on the capex part, the thing that you mentioned, is the capex more augmented towards the existing products and expanding these products and the distribution so that we are manufacturing those same products more? Or is it towards new areas like cardiac which you mentioned?

I think if you have heard on the call, we are going to focus more on transformative businesses, which is cardio, onco and critical care and renal.

So these are completely new businesses?

Yes, renal is existing business. The other 3 are completely new transformative businesses.

As there are no further questions, I would like to hand the conference over to the management for closing comments.

I would like to thank everyone present toda y despite holiday; everybody has been very participative. Thank you all. And I think great questions from all of you. And again, I would assure all our stakeholders that the company is on a great trajectory in terms of growth. And with a lot of new transformative businesses, which we are doing today. We are one of the most unique companies in India in the medtech space. And we continue to outperform all our competitors and peer group in the segment where we are operating today. And with whatever innovation we have done, I th ink there's a great global recognition for the company amongst all the stakeholders and peer group. And next, I think a few years are very, very exciting for the company where we are on a high growth capex cycle and in terms of growth numbers, we are very confident of achieving the guidance we have given to all our stakehol ders. And we will take all the suggestion, recommendations what we have received from y ou and definitely look forward to speaking to you again very soon. And thank you once again for your kind participation.

Thank you. On behalf of ICICI Securities, th at concludes this conference. Thank you for joining us. You may now disconnect your lines.