Ladies and gentlemen, good day, and welcome to Poly Medicure Q1 FY 2025 Results Conference Call, hosted by ICICI Securities. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Nisha Shetty from ICICI Securities. Thank you, and over to you, ma'am. Thank you, Anjali. Good afternoon, everyone. On behalf of ICICI Securities, I would like to welcome you all on Q1 FY 2025 Earnings Call of Poly Medicure Limited. Today, on this call, we have the senior management of the company, represented by Mr. Himanshu Baid, Managing Director, Mr. Naresh Vijayvergia, CFO, and Mr. Avinash Chandra, Company Secretary. I would like to thank the management of Poly Medicure for giving us this opportunity to host this call. With this, I will hand over the call to the management. Over to you, sir. Thank you, Nisha. Really thank you for, you know, hosting this call. Good afternoon, everybody. You know, it's my pleasure to talk to you again about the progress of the company for the previous quarter. I'll take you through the earnings of Q1 FY 2025. The revenue of the company, when you compare from Q1 of FY 2024- FY 2025, increased from INR 320 crores- INR 385 crores, roughly. Almost increase of 20%. EBITDA margin also increased from INR 87 crores- INR 104 crores. Again, an increase of around 20%. PAT margin increased from INR 62.7 crores- INR 74 crores, on increase of 18%. So we have actually progressed as per the guidance we had given earlier, and the company is on track to perform this year as per the guidance given earlier of 22%-24% growth and also improvement in the EBITDA margin of 100-150 basis points. We have done you know our capacity expansion. Our first phase is over, and we have added new plant and machinery over the four plants where you know where we have you know expanded in last 12 months, 18- 12 months. The capacity now has increased from 1.2 billion units - 1.5 billion units per year, and by end of the year, we will further increase the capacity to around 1.7-1.8 billion units for medical devices. So there's a rapid increase in capacity by over 50% over the year, because the infra is ready now, and mostly the capacity addition is happening through the plant and machinery, which we are adding in each plant step by step. Of course, these are all special purpose machines, so it takes time to get these machines from the vendors, because delivery time is between 12-18 months. As we are seeing the traction for each product line, we are building capacity and capability across those product segments. So, basically, the more expansion which will happen in the transformational segments, which we had talked about earlier, renal, cardiology, and critical care. These are three important segments we continue to expand faster than we were doing in the previous years. More and more CapEx has been done for these three categories. Renal business in Q1 has increased by over 40%. So this is something very heartening to note, and we are on track to grow from INR 90 crore to INR 140-INR 145 crore in the current financial year. So this business, which was lagging last year, we are able to bring it back on track. And of course, the regulation, which was, you know, enacted on first October 2023, that has really helped us to ensure that, you know, only good devices, good quality devices are sold in the country. And whatever was parallel imports coming for non-regulated products, it is stopped now. And I think, you know, a good progress for us. And similarly on the machine side, dialysis machine side, also we are seeing a good traction. We have now a good order book. As we have told earlier in the year, this year, we plan to sell close to 400 machines, and maybe even go up to 500, depending on how this order book matures. But we have a good traction, and we are on track for this kind of growth. We have added 40+ sales associates in quarter one, which is in line with our plan to add 100+ people in the current financial year. These 40 people have come across mainly in the new verticals, critical care and cardiology. We continue to expand the team and the reach, so that we can reach out to more and more hospital for these products. Our gamma sterilization plant is under construction right now and should be live by early next year. This we have done specially to ensure that we have full control on the sterilization process, and this is more safer process compared to the EtO gas, which we use today. Knowing that the gas is a little hazardous, you know, gamma plant is more safer, as all safety safeguards are in place. Currently, we use third-party services, but once our own plant is ready, we'll be able to move most of our sterilization to this plant, which we outsource today, you know, to other vendors. On the export business side, you know, we have grown in Q1 by over 25%. Domestic business has grown only 6%-7%, and there's a reason for this. In FY 2024, early Q1, we had some government orders for, you know, auto disable syringes, which was for a vaccination program. That program is now almost over. So we have seen that drop in requirement from the government. But on the other side, the trade sales has grown by 25%. Government businesses may be overall around 20% of the total domestic business. So there was a drop of 50% there. But overall, trade business has grown by around 25%, which is the balance 80% of the business. So hopefully, you know, by the end of this year, quarter two, quarter three, we see we have a good visibility on the domestic business, and we should grow by around 20%+, in the next few quarters. Cardiology and critical care business has taken off well. We have launched four to five products in each category, and further, next few quarters, we'll be launching another four to five products to expand the range. Current focus in critical care is towards oncology field, which is mainly for cancer drug delivery. And we, we see a good traction here. We are using the technology from our, you know, Italian, plant, to grow this business. And also, a lot of products have been locally developed, to, to augment, you know, the whole range of products for drug delivery. Q1 CapEx was close to around INR 70 crore. This is in line with our annual plan of INR 250 crore, which we announced earlier in the year. And, as, and most of the CapEx, as I mentioned earlier, is happening in these 4 new plants, you know, where we are adding new production line to expand the capacity. The company is also investing in AI-based tools for, for upgrading technical skills of salespeople. And these are some new tools which we have seen in the market. We have tested them, and actually, this will help to enhance the capability of the salesperson when he's going to a hospital or to meet clinicians. We will also do a lot of training programs, you know, to our international clients and also a training program to nurses and doctors through this AI-based tools. So we are already working on this. On the US business update, the first sale of infusion products has started. Now we are ramping up production capacity by adding new equipment. We are very hopeful that this new equipment will be ready by end of the year. But meanwhile, we'll continue to manufacture with the pilot equipment which we had established earlier. We already have 4 FDA approvals, you know, which have been obtained right now, and we are in the process to get 8-10 new approvals in next 12 months or so. So with this, almost 12-14 products will be FDA approved, and that will, you know, give us a good visibility for the U.S. market, you know, and U.S. business, which we are very hopeful that, you know, it will, you know, grow as we have projected earlier, between $15 million-$20 million in next three years' time. PLI, there's not much update as the current scheme was not favorable. You know, even in the current budget, the outlay for PLI is only INR 85 crores for existing companies which have taken PLI. So more or less, this scheme has not worked well for med tech industry, medical device industry, and we have been pushing the government that, if they can come out with a new scheme, you know, which is more favorable to the industry and which really supports Make in India. So there's a constant work in that direction, but we haven't heard anything in the current budget. On the new product development, product development side, we are already on track to launch 10- 12 new products every year. You know, the most important thing is that, you know, we, we continue to, to expand our R&D base, you know, expand our product lines across all verticals. Not only focusing on those three transformative verticals, but we are also focusing on transfusion and vascular, where we will keep on adding more and more products just to, you know, address the whole basket, the whole therapy in that segment. In the budget, nothing important has come for the med tech industry. Only positive news that government will rationalize duty structures across GST and customs duty platform over the next six months. Currently, we have a varied GST rates of 5, 12, and 18%, and probably in some cases, we have inverted duty structure. So I think what we heard as an announcement, that government may look at those, you know, issues and maybe rationalize this rate. On the yearly outlook, we continue to guide, as I said earlier, 22%-24% revenue growth for FY 2025 and 100- 100 basis margin improvement over this current financial year. This is based on the current traction we see in both domestic and export business. Even when we look at the new transformative businesses, renal, cardiology, and critical care, which are ramping up right now, these are also, you know, businesses which will add more margin, you know, what we have now. So they are probably, when you look at critical care and cardiology, they are higher margin businesses for us. And as we ramp up, I think we will see, you know, some improvement in the margin profile of the company. On the export front, I think I will look at the total growth of the company. Last year, exports were around 2/3 exports, one-third domestic market, almost 67% and 33% ratio. But in first quarter, the ratio has changed. We have 70% exports, around 30% domestic sales. So because of the high growth in exports, we were able to improve that ratio to a certain extent. And probably, in the current year, this ratio would probably remain in the range of, you know, ±1 or 2% of 70% and 30%. Europe continues to outperform for us. We have grown over 30%, you know, in the quarter one as compared to the previous year. And then this is pretty heartening because, you know, in spite of all the global challenges and headwinds, in the global supply chain and, you know, the sea freights are kind of increasing again. There's a huge shortage of containers, which is impacting actually, the business in the short term. So still, we have grown the export business. And as we hear from industry sources, that this container shortage or export freight rates will only come down by October, November. So next two, three months, it's challenging, but, we are very hopeful that we will be able to mitigate this risk, you know, and continue with, you know, the this growth we are having so far, in the export business. Company also received the Export Excellence Award for FY 2022 and 2023, as the largest exporter of consumer medical devices from India, from PLEXCONCIL. I'm also proud to say that from last 10 years, the company is a leader in this category. We were also recognized by The Economic Times as one of the best healthcare brands for 2024. So these are some of the, you know, accolades the company has received in past few months. We are also eagerly awaiting for the new drugs and medical device Act, 2024, which will reshape the regulatory pathway for medical devices sector and segregate, you know, largely the medical devices from drugs. This is very important because currently all the drug regulation apply on medical devices, and sometimes, you know, we get caught up, with, with the issues which are there in the pharma industry, which, which are not related to us. So I think it's important that we have this new regulation or act enacted soon, so that the whole sector can be carved out of pharma and drugs. There are also a lot of other government initiatives like supply chain establishment for manufacturing, expanding scope of PPO orders so that more Make in India products are procured by the government. So a lot of initiatives are happening parallelly, you know, especially to support Make in India. I'll just take you through the other aspect of the fund raise, which we have recently announced. The board recently gave approval to raise up to INR 1,000 crore through QIP process, which was done through a board meeting end of June. Most part of the funds will be used for CapEx. We plan to build three or four new facilities in the next 24 months to expand manufacturing capability, as we see a good traction and some new projects we are working on. Probably, this will help us to scale up faster. We also plan to deploy part of the funds into an inorganic opportunity for technology enhancement and also to shorten the product development cycle. Currently, it takes three-five years to launch a new product after a proper clinical trial and regulatory approval across global markets. So I think to shorten this cycle, to add, you know, products much faster, in the whole basket, I think we will have to look at certain inorganic opportunity. We are not sure what it is right now, but as soon as we know, we will definitely reach out to you and explain to you the rationales for doing those inorganic, you know, let's say, technology transfers or where we are going to invest money in the long run. We have seen a keen interest from, you know, foreign domestic funds in the med tech space in last two to three years, which is a great sign for the industry. Pre-COVID, this industry was capital-starved, and probably very few people knew about the med tech industry. But now with proper recognition, capital flow has eased out a lot in the industry. So this is, you know, what we see in the long run. Industry is getting recognition, more and more, you know, companies are expanding faster and more capital is available for the industry to grow, and which is a good sign. Our overseas subsidiaries and JV company remain profitable. They continue to expand operations in Egypt and Italy. China plant, we have not added anything new. As I explained earlier, due to cost structure reasons, in maybe next few years, we may, you know, maybe curtail the operation or even maybe completely shut it down. But again, that decision will depend on, you know, global external factors. This is all from my side. I'll be happy to answer, you know, questions, any questions from people on the call who've joined, you know. Thank you for your time once again, and thank you again for your participation and support. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on the touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to mute themselves while asking a question. Ladies and gentlemen, we will wait for a moment while the questions are assembled. The first question is from the line of Damini Shekhawat from Ambit Capital. Please go ahead. Sure. Thanks for taking my question. Mr. Baid, first question on the domestic business. You alluded to the fact that there were certain one-time orders from the government that you lost during the quarter- Yeah. in the last year. What was contribution of that for the rest of the year, nine months, FY 2024, the remaining nine months? So it was for a very special product, which was for vaccination programs from Auto Disable Syringes. So we have already discontinued the product after the end of last quarter. First year, first quarter of last year. Understood. So there is no other reliance for the remaining part of the year? Yeah, yeah, yeah, because, this was mainly for the Auto Disable Syringes, and we had started this business only because of government's assistance, because there's a huge shortage of supplies at that time. Understood, sir. Yeah. On the U.S. business, Yeah. Given that you've already announced tie-ups with a couple of GPOs there, so what kind of access does that provide to the medical institutions that are there in the U.S. market for you? See, basically, they will be placing the product directly into the market, and they have their own sales team to do that. So our, you know, job is limited to manufacturing in India and, you know, managing and maintaining those quality standards and regulatory requirements, and training those people initially on this product line. But beyond that, I think mostly the business will be managed by them locally. And so do you believe that they'll be able, given that those GPOs sort of provide to tens of thousands of medical institutions in the U.S., and do you get access to all of those with respect to your products, or are there specific institutions where you provide? They will be probably, you know, starting with few institutions, you know, to begin with, and then they scale up. Basically, the scale-up will happen maybe within few years, and already there will be existing contracts with existing suppliers and manufacturers. So it's not going to change overnight, but that's the reason we are saying that there's a ramp-up period, and maybe in next three years we'll see that ramp up. That's what we have been calling out. And so similar to Europe, wherein you have more of your direct presence with the hospitals, are you looking to sort of build similar thing in U.S. as well over a period of time, so that you get direct feedback from your customers and possibly- So we, we already have a team out there. You know, we, we have a couple of people in U.S. right now. But, as, as time progresses, you know, we will also maybe build some clinical resources so that, you know, we have a direct access, to the market and information what's happening out there. Understood. And, you recently had your Vision 2030 strategy meet. So could you talk about some of the targets that you have set for yourself and the vision that you have? See, I can't talk about future numbers so much. But yes, I think, the opportunity size, and I think Vision 2030 is mainly focusing on, you know, Indian market. There is most, you know, Indian market, that what is happening in India and how we can, you know, actually outsmart the growth, which is 12%-15%, and can we do be around, let's say, 22%-25% growth in India. And I think, with all the, you know, ideas we have got, from our team, I think we're pretty sure because these new two verticals will do well in India, because there's a lot of gap between imports and local manufacturing. So that is where we are trying to focus. Renal seems to be very promising. Overall, you know, the opportunity size is too big because market is growing at 12%-15%. We are still not present in every hospital. We still have only 40% coverage, and, we also, have to go deeper in each account where we are operating today. So when we look at this leverage, I think the opportunity is, is quite big, actually. Sure. I can't give you the numbers, but it's quite big. I totally understand. So lastly, on your capacity expansion, the new three facilities, when... as and when they come up, what kind of a overall capacity increase does that lead to? And then, what do you think would be the peak revenue potential from all the 15 capacity increases? You are asking the same question in another way. But so again, the idea is with these three to four new plants, which we established between 2023 and 2024, we were able to increase our capacity by 50%, from 1.2 million to almost 1.8 by the end of this year. Right. Similarly, with these two new plants which we'll establish, again, we want to achieve, sorry, next four plants, we're looking at expansion, and its expansion is more focused towards, I think, cardio or critical care. So there, the numbers may not agree, but the value would increase, you know. So again, you know, increasing it to by another 40%-50%, that's the plan. Right. Because my question is in terms of continuing to reinvest in your capacities, I mean, does that leave you with a lot of capacities which can possibly give you a 20%+ growth for the next five years without much capacity investment? No, no, we have to keep on investing. I think this industry needs a, you know, a tactical investment every year, and I think that is what we need to do. And because there's a lot of technology, it, it's something which is not static, that you start something... It's not like a steel plant that you invest once and then you are done. Here, every year you are adding new technology in the existing product also. So you have to keep on investing to upgrade and, you know, look at, you know, new areas. So- Sure. Investment will continue. Sir, with respect to these, you know, organic opportunities, it's my last question: Are you also looking to get into any related medical equipments as well? I can't answer that. Sorry. Sure. Yeah. Sure. Thanks a lot, and all the best. Thank you. Thank you. The next question is from the line of Harsh Jhaveri from B Capital. Please go ahead. Hi, sir. Congrats on the great numbers. I just wanted to understand this point you made on how PLI has not worked very well... for medical devices in India. So just wanted to know the roadblocks that are coming in. See, what has happened is government, you know, called out four categories of products in PLI, but they equated everything on the same parameter of equipment, implants, consumables, on the same parameters, that you need to do incremental revenue of INR 60 crore every year. Starting from zero, and then, and first, from first year onwards, do incremental revenue of INR 60 crore every year. So. And I think in certain industries, it is not possible. Even the equipment industry is struggling today. So every year you can't almost double your business or increase by 60%-70% in that category, because it takes time to establish the product. And, you know, especially when you are supplying to government, you need three years of market trending. So that was not well thought of. Even, you know, government, you know, departments are asking for certifications which are, you know, like CE, USFDA certifications on machines. So that takes two to three years to actually get, you know, one regulatory certificate like that. So from day one, you can't get. So most of the companies are not able to comply with that incremental revenue. And because of that, the, the, the, there's no incentives even being distributed. So this year, if you read the budget fine print, only INR 85 crore have been allocated to medical device sector for PLI. The whole scheme was for INR 3,420 crore. Year three would have been the peak year, which is the year three this year, you know, FY 2024-2025. In the peak year, which is third year, we are looking at INR 1,000 crore of incentives to be paid to companies, but the only incentive paid will be INR 85 lakh, which is the budgeted in government document. So even that budget will be there or not, nobody knows. Understand. Thank you. Thank you. The next question is from the line of Zain from Bharat. Please go ahead. Hello. Yes. Yeah, am I audible? Yes, please. What is the infusion sale contribution in domestic business? If you can- Sorry, could you repeat that question? There's some disturbance on the line. Just a minute. Yes. Can you hear me now? Yeah, it's better. Want to know that infusion sales contribution in domestic business is how much? Infusion products, so we don't call out separately, but it should be close to around 60%-65%. Okay, sir. What about the gross margin? Is contribution, as the contribution from export is high, so do you maintain the guidance of what you've given for the full year? Yeah, we, we have already, again, in the beginning of the call, I already said that we are maintaining that guidance which we have given, of a revenue growth of 20%-24%. And, even the margin, we have, you know, spoken that there will be an improvement by 100-150 basis points... in the, in the current financial year, when you look at the whole year, year as a whole. Okay. And so you have guided for 20%-24% export growth for- No, total growth. Total growth, not export. Okay. Revenue total, revenue growth of the company. And any guidance for domestic growth? Do you maintain that growth or you change it? For domestic growth, you know, as I said earlier, we are looking at between 20% and 22% overall growth for domestic business in the current financial year. But export will be slightly higher, so then the blended growth will be 22%-24%. Okay. Okay. That is all. Thank you. Thank you. The next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead. Hi, good evening. Just a question on CapEx. What's the CapEx plan? How much are you going to spend on CapEx this year? So this year, we have already given a guidance for INR 250 crore, which was already spent around close to INR 70 crores in the first quarter. And for the rest of the year, we'll be spending around close to INR 180 crores or something in that range. Okay. And that is going to substantially go up in the next couple of years? Yeah, it will go up because, first of all, we are going to set up, you know, four new plants. So that is, you know, that is something which we are already working on right now. And, this current CapEx is happening in the existing plants, which we set up in last couple of years. Understood. So if I roughly put, your capital raise plans and this together- Yeah. Roughly INR 250-300 crore of maintenance CapEx, plus another INR 300-330 crore of new plants. So roughly INR 600 crore sort of per year CapEx for next three years-ish. It's something as a rough back-of-the-envelope calculation. The maintenance CapEx will end by, let's say, middle of next year. Okay. You know, and because these plants will be saturated, and then we will not be putting any new investment other than you know, minor, but there's no major, then you know, because these plants will get saturated. So, but the new CapEx, which we're planning, would be a run rate of INR 300-350 crores. That is what we are seeing. And then maybe another INR 100-150 crores of maintenance CapEx. So you will see something between INR 400-500 crores of CapEx happening in next couple of years of further growth, you know, accelerated growth. Understood. Yeah. Okay, thank you. Thank you. As a reminder, anyone who wishes to ask a question may press star and one on the touch-tone phone.... Ladies and gentlemen, we will wait for a moment while the question queue assembles. The next question is from the line of Harshi from Wise Capital. Please go ahead. Sir, I just wanted to know, how is the dialysis business coming along, that you're on the target of 500 for the year. So if you could share, how is the Q1 then? Yeah. So Q1, we have, we have seen a 40%+ growth in revenue. The target for the whole year is within INR 140-INR 150 crores. We have already ended over INR 30 crores in the first quarter. And the traction is quite strong, because as we have localized production for the machine, we have also, you know, expanded, expanding capacity for our dialyzer production and other products. So we're pretty hopeful that, you know, for the year, you know, we should be in between INR 140 and INR 150 crores, which is probably will give us around a 50% over growth over the previous year. Okay, thank you. Thank you. The next question is from the line of Girish Jain from KJMC Financial Services. Please go ahead. Yeah, good evening, and, Himanshu Ji, and congratulations on a good set of numbers. Just a couple of bookkeeping questions. Yes. Could you give us some idea about the current debt of the company and the, you know, the inventory the company is carrying, given that some last year we were facing some logistical issues? So Girish, typically, we carry two months of raw material inventory in the company because of the current supply chain crisis, because a lot of raw material is imported. Almost 60-65% raw material is imported. You know, coming from different suppliers across the world, you know, we have almost 250 suppliers for different kind of raw materials, parts, components, which are used in critical manufacturing. On the finished goods side, we don't maintain any inventory on the export front, which is 70% of our business, because all is made to order. And for the domestic business, we carry probably one month of finished goods inventory. So that is the current cycle. On the debt side, the long-term debt in the company is, at this moment, close to around INR 7.5 crores, which is going to be over by end of October. That's the final tranche as of payment. It's an ECB, which we had taken a few years ago. And working capital debt would be around INR 150-160 crores. Okay. And if I have time, I'd like to add in one more question. Sure. Yeah. On the CapEx plans, we had four new plants which we had, which have now become operational. Yes. And, in the further fundraise, which is the company's planning- Yes ... the entire money of INR 350 crore, which will be put in these four plants or some new locations are being envisaged? No, so all, what we are doing is current, in the current plants, whatever CapEx we are doing right now in the current financial year and partially in the next financial year, is being funded from internal accrual already. And whatever new fundraise we are doing, these are four new completely brand-new locations. So and I'll also call out these locations. So one, there's a new location, Faridabad, which is outside of Faridabad, and one in Haridwar and one in Jaipur. Of course, it is in close proximity to existing plants, but not really attached to the existing plants. And then maybe a fourth location we are scouting around now. Maybe we'll get into one of the medical device parks which are being set up in either in UP or in MP. We are already looking at, you know, you know, looking at, some, you know, properties in that area. Okay, and- The existing medical device parks. Okay, and the balance remaining out of the fundraise could probably use for working capital and/or inorganic opportunities? Yes, yes, absolutely, sir. Absolutely. Okay. Thank you, and all the best. Thank you. Thank you. As a reminder, anyone who wishes to ask a question may press star and one on their touchtone phone. The next question is from the line of Harsh Shah, from Dalal & Broacha Stock Broking. Please go ahead. Yeah, thanks for the opportunity. Just a follow-up on the previous participant's question. Sure. So, if you could, you know, kind of, say a ballpark figure, how much of the amount from the fundraise would be used for an inorganic acquisition or a technology transfer, if you could call out approximately? So though we have not finalized anything, but we will keep 25% or 30% of that amount for that opportunity. Majority of that will be going for CapEx. Okay. So, the new four plants or the location that you were saying, so would that be only in cardio and critical care or something else is also? See, mostly, because these are new businesses, we have just started last year, so we need to have scale up in these businesses. So we, we are going to mostly spend money in that area. Because these are very deep technology businesses, where we have to invest deeply into manufacturing and, and the equipment. The infra is very different from the current infra. ...Correct. Got it. And, lastly, say, if I take a five-year or a six-year view, is it possible that our EBITDA margin can exceed 30%, or do you think it will far-fetched? This is very difficult to answer this question right now. Let's not speculate, but I think, yeah, we are trying hard, and, in fact, this year also, you've seen margins are close to 27%. So stretching another five, 7%, 8% is not a big difficulty from that 27% number. So hopefully, you know, we should be there in few years, but I can't give you a correct timeline on that. But that's what we would probably aspire to do. Got it. Got it. That's it from my side. Thank you. Thank you. Thank you. The next question is from Shivam, Shivam Saxena, from ICICI Bank. Please go ahead. Yeah. Hi. So just, two questions: what is the current capacity utilization of the plants currently? And secondly, how much time it takes for a plant to become operational? So suppose if you do a CapEx for a new plant, so how much, when it will give revenues? Two questions. So, yeah, sure. So the current capacity utilization is close to 75%, and maximum we can go is 80% because of the variability in the products which we manufacture. And, on the, let's say, the second question was on, sorry, can you repeat that? Basically, how much time it takes for a plant to become fully operational? I guess so. So I think on the plant side, it takes typically two years to build a plant and get all the regulatory approvals. Once the plant is ready, then only you can apply for a product regulatory approval, which could take another, because you have to undergo clinical trials and regulatory approval, may take around six to twelve months, depending on the product complexity and the criticality of the product, and that is India only, specific. And then once you are going to go to global market, then you need another 12-24 months, depending on the country where you are applying for the registrations. So that is the typical life cycle of starting to build a plant to be fully operational and functional, maybe between four to five years. Okay. And the current hiring that you have done, so what is the purpose of that hiring of people? Hiring is for sales. These are sales people. Only for sales. No, no for- This is addition in, in the sales team, of course. We have also added maybe around 75 people in the plants across different, you know, in regulatory, quality, manufacturing, R&D and other services. But mainly we are calling out more on the sales side, because this is something we in order to build more stronger. Okay. Okay, thank you. All the best. Thank you. Thank you. The next question is from the line of Girish Jain, from KJMC Financial Services. Please go ahead. Yeah, thank you for this opportunity again. Himanshu Ji, you, in the opening remarks, you mentioned that, the China plant, is not doing great, and you may, in the future, consider, Yeah ... closing those operations. Yeah. Did I understand correctly? If yes, what could be the impact on the revenue and the profitability? No, so China plant is a very small plant with less than 40, 50 people, and the revenue is under $2 million from China plant. And the reason we will probably close it down is because of current cost structures in China are much, much higher as compared to India. And also, the plant lease are expiring in next 18-24 months. Initial lease was around 20 years, so we are almost at the end of the lease period. And I think, the management team and the board have probably has taken a call. There's no point in extending that and, you know, taking into, you know, another five or 10 years. So we will... And I think now, there is no such advantage coming out of China, being in China. I think in India, we have already grown in a good way, which will actually, you know, make China factory redundant or more redundant. So would it be correct to assume that the impact on revenue will be less than $2 million, whereas on the impact there might be a positive impact, on the tax, there might be a positive impact? Yeah, yeah, because ultimately, all that cost goes away. And I think, and $2 million is nothing in today's range is $200 million dollar revenue company. Right. Yeah. Right. Thank you so much. Thank you. The next question is from the line of Nitin Tarekar from Bonanza Portfolio. Please go ahead. Congratulations to the management of the chapter members. I just had a bunch of questions. First, the US FDA, you are filing for US FDA approvals and 3-10 for the current year. So in what therapeutic segments are these, FDA filed? And the second would be the guidance on the new plants that are being, that you are, you are planning to set up. Any geographical guidance on where these plants would be, and thirdly, are there any new therapeutic segments or devices that we are willing to explore in the coming, next few years? So on the first question, it was not very clear. Maybe you were too close to the mic, so maybe if you can repeat that. The next two I've understood, but the first question, if you can repeat on the US FDA, it was not very clear. So, like, currently, you have filed for U.S. FDA and, like, the total figure is going to be 8-10 for the whole current year. So where are, like, in what therapeutic segments are these FDA filed in infusion therapeutics? Products, which will be, you know, where we are applying for FDA will be more on the vascular access and critical care. These are two important areas we are focusing on. Vascular access is the core business of the company, so we will focus there, because we have a good global competence in that area. And then the next segment, we'll be focusing a little more on critical care side. And on the new plant location, we have, I've already mentioned a few minutes ago, the plants will come in Jaipur, Haridwar, and Faridabad. It's in the, you know, outskirts of Faridabad. And the fourth plant we have not decided. We are still contemplating, maybe to go to a medical device park. On the segment side, I think we'll, for next four to five years, we'll continue to focus on the current six segments we are into. But whatever adjacencies we see, maybe when we do renal, we could probably look at, you know, urology side of the business, or, you know, when we do critical care, we can also look at maybe gastro side. So these are some of the adjacencies we will look at, but I can't tell you anything which we'll do, what we'll do in 5 years from now in terms of business, new product areas. But currently, we have enough to do in the current segments itself, what we are doing. All right. That answers the question. Thank you. Thank you. Thank you. The next question is from the line of Shivam Saxena from ICICI Bank. Please go ahead. Yeah. Thank you for taking the question again. Yeah, just wanted to understand what is the frequency of price hikes in the sector? Do you take? It is easy to take price hike in the sector? No, if there is a big change in raw material cost, then definitely we will take a price hike. And, you know, overall, we have an experience of now 27 years of running this company. So, what we have seen is that, prices are more or less steady because, you know, we don't see too much changes, as our gross margins are pretty high, so we are able to manage any raw material shocks which come in the market. So more or less, the prices remain stable. And if there is an untoward change in global pricing, or global raw material, you know, let's say supply chain, then definitely we go back to customers and ask for a price hike. But it depends on the contract, depends on business to business. So there is no set formula for this. So, how is the competition high in the sector? Competition point of view, that means. Sir, if there was high competition, there would be many players in the market. Many medical device companies will be talking to you. Okay, and another thing, you said that it will take 3-5 years to pick up revenues for the new plants. So what will be the revenue growth drivers till that period, if you can- That period, we already have established four new plants in the last two years, and most of these plants, you know, will get populated. So by 2027, these plants will probably get exhausted in terms of capacity and capability. And that's the reason we are now planning to build four new plants, which will get operational by 2026 and 2027, and that will help us to again scale up revenues for the following three, four years. Okay. Thanks. Thanks. Thank you. Thank you. Ladies and gentlemen, please, please press star and one to ask a question. The next question is from the line of Harsh from Dalal & Broacha Stock Broking. Please go ahead. Yeah, thanks for the follow-up. You mentioned in the opening comment that we have grown about 30% in Europe. So, I mean, commendable growth, but just wanted to understand, is it just cost difference that is helping us to win more market share in Europe? See, basically, it's about market penetration. There's been more and more products. That is important, because as the funnel is now open, so we in the same, let's say, in the same hospital, with the same distribution partner, we are able to add more products. So that's number one, because we have a very wide range of products which we offer. Of course, in India, when you're making in India, you have to be cheaper, because you are there, we are competing with local players or with global international players. So definitely, if you are matching on quality and performance, and if the price, there is a price delta, definitely then we have a better chance of supplying those products. What would be the price delta ballpark? It depends from product to product. Very hard to say, you know, what you know is delta, but I would say maybe 20%-25% price differential, for sure, between Indian companies and large multinational companies. Okay, got it. Lastly, in terms of risk share, in the export market, what could be that risk share? Obviously, right now we are facing that container availability issue- Yeah ... and stuff like that. But other than that, what is the risk that- The issue was also there in 2022, so it is not new, and maybe also prior to that, you know, when, whenever there is a crisis, global geopolitical situation, always the trade imbalance kind of kicks in. So I think that is always kind of mitigated. Yeah, sometimes you have to pay higher freight, or customer has to pay for a little higher freight. But again, you know, over a period of cyclic, so it comes back to normal. I think, to me, the biggest risk I see would see in the export business would be, you know, if we are really making bad quality products, but which we are not, because we have 27 years of experience in selling in overseas markets today now. So, and we are in more than 100 countries today, selling our products. We are very well diversified on the geographical side. We are very well diversified on the product portfolio. So these, all these things, and we have run multiple plants. So all this helps us to mitigate that risk which can arise because of one product or one country. ... Got it. And, I just, lastly, on IV Cannula, so, what percentage of revenue would that be contributing? Between 25%-30%. That would be mainly in Europe, right? Not really. We are. It's a global product. We are the third largest manufacturer in the world. We have almost 10% global market share on that business, in terms of volume. Sorry, what market share did you mention? Almost 10% market share, global volume. Got it. Got it. Yeah. That is all from my side. Thank you. Thank you. Thank you. Ladies and gentlemen, please press star and one to ask a question. Participants, you may press star and one to ask a question. As there are no further questions, I will now. I would now like to hand the conference over to the management for closing comments. Again, thank you everyone for your time, and I think, a lot of good questions asked. This really helps us to do better, and, you know, your thoughts which are coming from outside really, you know, give us a very different view on the business. So, I would, you know, continue your support, your participation, so that, you know, we can do better every time, you know, when we talk. Thank you again, I'm looking forward to speak to you in future. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.