Ladies and gentlemen, good day. Welcome to the Poly Medicure Limited Q1 and FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Today on this call, we have with us the senior management team of the company represented by Mr. Himanshu Baid, the Managing Director, Mr. Rahul Gautam, President, Strategy and Corporate Development. I now hand the conference over to Mr. Himanshu Baid. Thank you. Over to you, sir. Good evening, everyone. I welcome you to our quarter o ne FY 2027 earnings call. I sincerely thank all of you for being here today. Before I come to numbers, I want to give you a glimpse of our strategic Vision 2030. We are calling this as a PolyMed 3.0. As you all know, PolyMed initiated operations in 1997 with an IPO of INR 2.65 crore, using which we set up our first plant. In the next 25 years, we remained bootstrapped and slowly built our leadership in our core infusion therapy business by painstakingly building global quality products. During this period, business grew from zero to almost INR 7 billion in revenue. In 2021, PolyMed started 2.0 journey, which we call the inflection point in our history of the company. We did our first institutional fundraise, which resulted in multi-fold expansion of capacity. We also entered into high-technology segments like Cardiology, Critical Care, Orthopaedics. During this period, we also started our inorganic growth journey with acquisitions of PendraCare and Citieffe. Revenue during this period almost went up by 2.75x to INR 1,875 in FY 2026. Starting FY 2027, we have initiated PolyMed 3.0, a phase we are calling Ascent. During this period, we have set a goal to double our revenue by FY 2030 by unlocking value via organic and inorganic expansion, leveraging technology to scale high-complexity verticals globally, and deepening direct customer access, especially in international markets. I believe we are at a point of time in our journey where growth should happen exponentially, led by high-technology, high-margin segments. Given the strength of our balance sheet where we continue to have strong liquidity, we believe this audacious goal is truly achievable. I'm really excited about this phase, which I believe will truly make PolyMed a global MedTech MNC out of India. On the leadership front, we have already reshared actions to achieve our PolyMed 3.0 vision. We have appointed Indranil Mukherjee as our CEO for India and APAC, Renato Rocha as CEO for Brazil. Indranil has joined the company on 1st June 2026. Renato has joined the company on 1st August 2026. We also brought in Abhimanyu Hooda as the Head of Renal Business in India to augment sales and also build a strong capability in this segment. I believe above leadership reinforcement will help us to put a strong position to deliver on our aspirations. Moving on the financial performance of the company on Q1 financial results. On the financial performance side, let me start with our standalone performance as this remains core for our group. Standalone revenue for Q1 was INR 431 crore, up 12.3% with domestic at INR 146 crore giving a growth of 16.2%, international at INR 281.8 crore giving a growth of 10%. Gross profit for Q1 was 71.5%, showing significant improvement due to better product mix and impact of price hike implemented in Q1 and inventory gain. I expect that our gross margin should continue to reflect on historic margin trend of 68%-69% in the near term. We have guided a standalone EBITDA margin of 25%-27% for FY 2027, but we have delivered 28%, 100 basis points higher than the guided range. Absolute operating EBITDA was INR 120.8 crore, up from 18.8% on year-over-year basis. This was despite employee cost rising almost by 29%, driven by 35% increase in minimum wages in Haryana with effect from 1st April 2026. Increase in headcount as well as impacting increments for FY 2027. On the consolidated picture. Consolidated revenue was INR 525 crore, up 30.3%. Of that, INR 72.3 crore came from acquisitions. On organic basis, revenue was INR 453.1 crore, up 12.4%. Within international, Europe grew 43.8% to INR 187.3 crore, and importantly, it grew 17.6% organically, reflecting improvement in the performance in the region. As you know, last year Europe was a laggard, and this year, as we have added some customers, onboarded new customers, we were able to come back to our original growth or our planned growth of 17%-18% as we had forecasted in the beginning of the year. Rest of the world grew at 30.3% on reported basis, or only 4.0% organically. The reason for low growth was 32% degrowth in the Middle East due to ongoing West Asia crisis. Customer demand in the region is intact, but given the current logistics and infrastructure bottlenecks, we are unable to meet that demand. We are hopeful that once the situation improves in the region, we will return to normalcy. Our order book is pretty strong for Middle East, but currently we are unable to ship the products. Consolidated gross profit was INR 385.6 crore at a margin of 73.4%, up 495 basis points. The better margin profile of the newly acquired business is helping improve group's gross margin. Consolidated operating EBITDA was INR 126.7 crore, up 17.7%, at a margin of 24.1%, within our guided range of 23%-25% for the year. Infusion Therapy grew by 11.1% to INR 259.2 crore, led by strong domestic growth on back of rising share of higher value-added products and price increases. Internationally, we have started to witness a strong recovery in the business despite a 32% degrowth in the Middle Eastern markets. Orthopaedic contributes INR 49.2 crore, which reflects the consolidation of Citieffe. Cardiology grew from INR 2.9 crore to INR 28.6 crore, led by PendraCare acquisition together with genuine scale-up of domestic business. Others grew by 18.5% to INR 149 crore, constituting the balance. The one soft spot was Renal. They de-grew by 3.8% to INR 43.2 crore. The Renal business was impacted by continued pricing pressure from Chinese players in India, but we made a conscious choice to raise prices to cushion the raw material price increase rather than different volume at any cost. Separately, there is an important development. Based on application filed by the company, the government has initiated an anti-dumping investigation into imports of dialyzers from China and Malaysia. We have claimed for an injury margin of 20%, and we hope in next few months we will see some decision taken by the government to protect local industry. On the balance sheet front, the liquidity remains strong with a cash of about INR 855 crore, which is the reserve we have set aside for strategic initiatives. Now let me connect this to our forward-looking guidance for FY 2027. Before this, I would also like to point out that company has been now pushing hard on the developing new medical devices. For that, we have also initiated a lot of clinical studies. As a support, Government of India has also granted an aid of around INR 3.3 crore for undertaking clinical studies of some new critical devices we have just recently developed. On the guidance front, on the consolidated basis, we are guiding for revenue of INR 2,300-INR 2,400 crore, including the full year consolidation of PendraCare and Citieffe. We are maintaining this guidance after quarter one. On standalone basis, we maintain revenue guidance of INR 1,900 crore-INR 2,000 crore, with the domestic business expected to grow over 20% and international business growing by over 15%. Standalone EBITDA margin is expected to be between 25%-27%, though currently in the first quarter we have done 28%. Still we think that maybe for the first quarter, the margin was slightly high because of price increases we have taken and some inventory correction. Hopefully we should be in the higher range of 25%-27%. With consolidated EBITDA margin expected to be in the range between 23% and 25%. This quarter we are on 24%, so we are pretty much in the range. Hopefully we can maintain this. We expect to spend between INR 200 crore-INR 225 crore in the CapEx for FY 2027. In summary, this is a quarter where the strategy started converting into numbers. The high technology, high complexity segments we invested in through PolyMed 2.0 are now generating the value we anticipated. I remain confident in the direction of the business for the year FY 2027. Thank you very much for your trust and time. I will now hand over to operator and will be very happy to take your questions. Thanks again, everyone. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Before we take the questions, in order to ensure that the management will be able to address all the question from the participant, we request you to kindly limit your question to two question only per participant. If you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the questions queue assemble. First question comes from the line of Bhavya Gandhi with Bajaj Alternate Investment Management Limited. Please go ahead. Yeah. Hi. Thanks for the opportunity. Hope I'm audible. Yes, sir, you are. Yes, sir. Just wanted to understand on the standalone business, we are looking at an absolute revenue of closer to INR 350 crore-INR 400 crore, whereas in Q1, we've grown closer to 12% on the standalone business. If you can just help us tally the number in terms of absolute revenue, INR 350 crore-INR 400 crore, where exactly are we planning to get there? That is question one. You mean the incremental growth of INR 350 crore-INR 400 crore? That's what you mean? Yeah. I think our quarter one tends to be the lowest, if you look at the history of the business, and it tends to grow as we go into the financial year. This year, because we've also taken a price hike, at the beginning of the financial year to account for the increase in raw material prices. The beginning of the year was slightly slow, and we recovered some of the revenue in later part of the quarter. As that momentum continues, we believe that we should be able to get to much better numbers in Q2 onwards and still achieve the guidance that we've given. Got it. Fair enough. Sir, the second question is regarding the inorganic acquisition. We have closer to INR 850 crore in terms of cash. If you can throw some light, what exactly are we looking out for? Are we going to utilize the entire amount of INR 850- odd crore, or how is it? That is question two. Basically, we are looking at expansion, organic and inorganic. As you have done a very small acquisition in Brazil recently, we are trying to put our presence there. Board has also allocated some funds for Brazilian market where we can expand with direct sales presence. Of course, we are looking at technologies around three critical businesses, in Cardiology, Oncology, and Orthopaedics. We are looking at adjacent technologies, wherever we find an opportunity, we will look at that. Some of the funds are also allocated for the CapEx to be done at two plants, which are under construction at this moment. One is coming in Palwal in Faridabad and one in Noida, basically, in the medical device park. Okay, got it. Would you like to share some asset terms for the CapEx that you're planning? The asset terms for us, if you look at the past, remains between 1.2-1.4, and we expect on a balance sheet this is similar kind of asset term to continue. Okay, fair enough, sir. Thank you so much. I'll get back in the queue. Thank you. Thank you. Next question comes from the line of Sidharth Negandhi with CWC. Please go ahead. Hi. Thank you for the opportunity. If I look at our India growth ex of Renal, and I am assuming all of Renal was India, then that is 27%. Overall Infusion Therapy growth was much lower, right, around 11%. What was the therapy that drove India growth, if you could give us some understanding. On the disruption that you have seen in ROW export. Given that this is really at some level an essential product, have you seen the resumption of exports in Middle East or are you still envisaging this to continue until the conflict subsides? The third one is, do we expect further RM cost impact in Q2, versus what we have seen in Q1, given your inventory levels? I know you have taken certain price increases, how should one think of gross margins in Q2? These were my three questions. Thank you for these questions. Let me take the first one, which is the segment which have driven the growth for us domestically. As you rightly said, our Infusion Therapy business has grown at about 11%, and this reflects the performance both domestically and internationally. On the domestic side, Infusion Therapy business has actually grown 20%+ for us in this quarter. The other segment which have grown for us is obviously Cardiology, Critical Care, two segments which we have recently initiated, and those are contributing to growth quite meaningfully in this quarter. O n the second question, the supply chain on the shipping are still disrupted right now. If you look at the shipping schedule, shipping schedule is still disrupted for the Middle East, and it is still hard to find containers which can go to Middle East ports. Still the disruption continues. Hopefully, in coming weeks, we may something easing out. On the demand side, we see still it is an intact demand. We have orders from customers. They are piling up at the ports, unfortunately, as the ships are not calling, they are stuck up at the ports. That is the issue. On the price side, I think, currently, as crude stays where it is, I think we do not see a major impact on raw material cost. Maybe minor few percent here and there, but more or less, I think, probably we have almost seen that peak off. Just on the acquisitions, any update in terms of how the integration is going? How are you thinking of any integration in terms of cross-sell or the movement of some of that production back to India? Just some updates on that. Sidharth, I think we are quite happy with the way how the integration process is going on. For both the acquisitions that we've done, we have clearly identified areas of benefit that both the companies see with each other. We have created a group, which is continuously following up on all of these synergies. This includes across the cost items as well as on the R&D side, plus the sales velocity that we're trying to increase. On an overall basis, we are very happy. On the part of moving the manufacturing process to India, we are currently working with both PendraCare and Citieffe on that part. Given this is a regulated sector and any such process change needs regulatory approval, some of these processes currently are at the regulatory approval stage. Got it. Rahul, have we already started seeing some cross-sale synergies, or is that going to be more later in the year? I would expect some of this to start playing out from next financial year onwards. Given medical devices is a regulated sector, any new market that you want to open up, like even for India, if you want to bring those products into India, we need to take the approval from the CDSCO. That process is on. I would expect that to start being visible from next financial year onwards. Got it. Got it, thanks. Thanks, Sidharth. Thank you. Reminder to all the participants, kindly limit your question to two question only per participant. If you have a follow-up question, you can rejoin the queue. Our next question comes from the line of Raksha Srivastava from Narnolia Financial Services. Please go ahead. Hello, am I audible? Can you be louder, please? We can't hear you. Participant has left the queue. We can move forward to the next participant. Our next question comes from the line of Bharat C. Shah with BCS Capital Ideas Private Limited. Please go ahead. Yeah. Hi, Himanshu. Good to see the hunger for the growth is enunciated in PolyMed 3.0. The first question is, we have said we want to double the turnover and margins to be the industry-leading margins, the growth will come both organically as well as inorganically. Correct. When you say 2030, I presume it is March 2030, four years, right? Yeah. Okay. That means doubling will mean about 18% compounded growth in the four-year journey. How much of that is counted as organic? Bharat, if you see in the current avatar, company does around 80% organic business and 20% inorganic business, and I think we'll probably continue at a similar run rate. Okay. About 14%-15% domestic, sorry, organic. Yeah. 3%-4% would come from acquisition. That's the trajectory, basically. Sure. By industry-leading margin, I presume much better than what we have outlined for the current year. What kind of margins should one assume on that? Bharat, this is Rahul. If you look at the margin profile of PolyMed today, we are already the flag bearers in terms of profitability across the industry. I think we have the ability to improve our margins even now, given we are focusing on growth in the near term, we want to keep the margins in the similar range. Currently, obviously, margins have been between, we've guided for 25%-27% margin. We expect that we should close this year with upper end of that guidance range. As the scale happens, we should be able to increase that margin as well. Given we'll be reinvesting back in the business, from a modeling perspective, assuming a similar kind of margin will be a reasonable assumption to take. Similar margins, not lower, right? Yes, that's correct. Okay. Himanshu, I'm just trying to understand. When we look at somebody like Meril, which is doing lot of cardiology-related business. Yeah. The scale-up as well as the margins earned. The scale-up itself is happening at a pretty rapid pace. Yeah. The margins also are quite impressive. I was just wondering what kind of opportunities we can hunt around, because this kind of margins and the rapid scale-up in the business, what are your own thoughts and your observations? Bharat, Meril started the cardiology business around 15 years ago. It's not something which they've started new. They had started this business almost 15 years ago, developing products, and PolyMed was never in that space earlier. Of course, we still had great margin profile between 25% and 27%. We have started Cardiology only two years ago, and that's how we are building it up, developing products. As I just told you, we have been given a grant of INR 3.3 crore for clinical studies in India, because a lot of these are import substitution devices. That's been our focus. As we move up, again, regulatory pathway is very important because that needs time, and it cannot be just like that you build a product and you can start selling tomorrow. It's all about regulatory pathway, clinical studies. We are building this up, and I think in next two, three years, you will see a lot of new products coming from our portfolio on Cardiology side. I think that's the journey we need to take. Let's not forget that we have our global excellence on infusion of vascular access, and we will continue to build that globally also. We have a cash cow, we have a product which works very well for us, we'll continue to build there, but we'll also continue to invest in this new area of orthopedics, cardiology and critical care that will help us to actually grow business in India and internationally in near future. Okay. Just one last thing. Last year, in many ways, is being a bit of a tumultuous kind of a year where many imponderables kept coming in. Many of them outside your control in the external environment. Today, as we stand and with armed with some of the acquisitions that we have done, with the plants and the capacities in place and some of the new categories established— Yeah. —when you look at the Vision 2030 that you have spelt out. Yeah. What are some of the very positive points you keep in your mind, and what are still some of the challenges that you visualize? Bharat, it's a long question, I'll try to answer in a short limited time. One is, I think on the opportunity side, India happens to be the best opportunity in my view. Now Poly Med brand is very well known. Today we are present in almost every corporate hospital in the country or every important hospital. Most important thing will be to deepen that relationship with those hospitals and start working more aggressively and putting more products out there. I think that is number one priority. Number two will be Europe, where we continue to expand and our business and continue to go as a go-to-market direct strategy. We're currently present only in Italy, we want to go maybe three or four geographies, we want to go direct. That's a very important part of the strategy. As we just hired a CEO in Brazil, we'll also put our strategies there to go directly with more new products, the newer range we have today. Currently, our distributors only sell our existing products. For new product ranges, we will want to go direct. That is on the product side, market side. On product side, anyways we are going to launch 25, 30 products a year, that's already in the pipeline, it's already happening. I think challenges is probably the geopolitical risk which I see. U.S., uncertain because of every day there is a new situation which is coming up. Middle East, hopefully the war kind of settles down so that the markets resume and we are able to resume the flow. Also the logistic costs, which have actually gone up substantially two, three times in last six months. I think they will have to come down for India to remain competitive in exports. These are some of the things which come to our mind, Bharat. Sure. Thank you, Himanshu, and all the very best. Thank you, Bharat. Thank you. Next question come from the line of Deepak with Sundaram Mutual Fund. Please go ahead. Yeah. Thank you for the opportunity. Am I audible? Yeah, please. Please go ahead. Good afternoon, sir. Congratulations on delivering a resilient set of numbers. I had a couple of questions. First, on the acquisition. Would it be possible to call out, let's say in euro terms, what was the year-over-year growth of PendraCare and Citieffe and EBITDA margin for this quarter? Deepak, I will have to separately touch base with you on that. I do not recall that number immediately. Okay. Sir, second, if I look at our exports growth, ex of acquisition in Q1, roughly as per my calculation, we have done somewhere around 10%-11%. Which denotes that in nine months going into this year, we would have to clock more than 15%. Just wanted to know your thoughts around what will drive this organic export growth in the next nine months, and what is the growth outlook for the Renal segment since in the PPT you mentioned that we are facing some competition due to Chinese dumping? On the export front, I think for us, Europe, again, because we have done some new customer acquisitions, that seems to be the growth market for us this year. Southeast Asia is also doing very well. I think these are two markets I'll call out for the moment. U.S., yes, we are growing, we don't know what's going to happen if we have 100% tariffs tomorrow or today night, I don't know. It's pretty fluid situation regarding U.S. These are the two important geographies we'll continue to grow. I think once the situation in Middle East improves, I think we will see probably maybe more than 20%-25% growth from Middle East. Currently, everything is torn and all the orders are still lying at ports or in factories. I think that is something we are looking at. Export growth should happen. There's no reason it should not happen, and we are pretty confident. We have almost 25 new products in pipeline for CE marking, which should come sometime between now and next three to four months. That will also add to the basket for increasing the basket for exports. The second question was around? Sir, second one. Renal segment growth outlook. Pardon me for that. On the Renal side, I think we had a de-growth of around 3% in the first quarter. I think, again as maybe my earlier comments, you must have heard about government opening an anti-dumping probe because we were pushing the government to look into the pricing which was dumped by Chinese, and most of the Chinese companies are importing into India zero duty using the ASEAN FTA. I think even day before yesterday, there was a minister's meeting, and we have also flagged that issue again to the minister, Mr. J.P. Nadda. With this anti-dumping probe getting evaluated right now, and with the injuring margin of 20%, we think that something will happen between now and end of the year. That's number one on that front. Secondly, we have hired Abhimanyu Hooda, which you must have heard in my opening comments. He comes from a strong renal background, probably that will also help us to turn around and work with distribution partners in the country and outside the country to grow that business. Hopefully by this year-end, we should end with a growth of around 15%-18% in the business, maybe close to 20%, depending how it goes, we are pretty confident of this growth in spite of all the challenges we face today. Okay, sir, that's very heartening to hear. Sir, lastly, if I look at our gross margin, this quarter we have reported multi-quarter high gross margin. I understand that you also mentioned that we have taken some price hike, which could have helped us to rake in this sort of gross margin. Let's say on a steady state basis, at least in the near term, let's say the nine months of this fiscal year, how should we look at the gross margin? Should it normalize to that 68%-69%, or will it continue to clock above 70% rate? See, basically on standalone basis, we should see between 67%-69%. This is what we have called out also earlier. Also on the, let's say, consolidated basis, we should see further maybe 200 basis points-300 basis points improvement because PendraCare and Citieffe operate on a higher gross margin. They probably, at the end, consolidated numbers should look between 71% and 72%, whereas standalone should look between 68%-69%. Okay, sir. Very helpful, all the best. Thank you. Thank you. Next question comes from the line of Rashmi Shetty with Dolat Capital. Please go ahead. Yeah, thanks for the opportunity. Again, on the margin front, on the consolidated level, overall gross margin, you said it is in the range of 71%-72%. But on the consolidated level, our other expenditure and personal cost for this quarter is pretty high. On an annualized basis also, it would be a similar run rate of around 24% of sales in the subsequent quarters? Yeah. Rashmi, as you mentioned, our guidance for consolidated EBITDA is between 23%-25%, and we are maintaining that guidance. As you rightly noticed, the people cost and other expenses are higher in case of our acquisitions. That's reflective of the nature of the business, plus the fact both the businesses are currently scaling up. That's why our consolidated EBITDA margin guidance is lower than our standalone EBITDA margin. Okay. On sales front, if you just compare organic and inorganic sales for this quarter, inorganic is around INR 73 crore in the export business. What I understand that, given whatever CY 2025 sales you have given for the acquired companies, and if you convert it into the [inaudible] INR currency, then we are just integrating, right? We have not seen any major growth in the acquired company that is in the inorganic company's sales. We have not seen the pickup yet. Am I correct on this part? Yeah. Basically, you have to break it down into two parts. PendraCare and Citieffe are two different entities, both having their own set of growth journey. For PendraCare, as we had highlighted in our last call as well, they had over-indexed exposure to Middle East of about 20- odd percent. That business is actually currently not growing. In fact, it witnessed de-growth over last year as well. Citieffe is growing as per expectation in mid to high single digits. As the synergies kick in, we should be able to increase that further. Okay. In the coming years, what is the kind of growth we are assuming in case if Middle East problems get resolved for FY 2028 from the acquired company? Yeah. I think on a long-term basis, as you've called out earlier in our acquisition calls as well, these assets on the standalone basis have the ability to grow in high single-digit revenue growth. With the synergy that we want to drive in through product development, cost reduction, as well as through sales channel expansion. We want this to go into the mid-teens as an aspiration basis, assuming the current geopolitical situation resolves itself over the course of next few quarters. Okay. Is it better to assume that from next year onwards, when the sales pick up and when things get resolved, we will be able to see the overall EBITDA margin, including this acquired companies to expand at least 100 basis points- 150 basis points? We haven't given any guidance like this at the moment, Rashmi, I won't be able to comment. Directionally, as these businesses scale up and the synergy benefits kick in, we expect the margins of these entities to improve, which will reflect in the consolidated EBITDA margins as well. Okay, last question, just on the gross debt figure, if you can give that figure and what are the kind of repayments you are expecting this year? PolyMed standalone does not have any debt other than the working capital debt. Yeah, working capital. Yeah. That amount is about INR 250 crore, which is a revolving credit. On our internal subsidiaries, again, PendraCare does not have any long-term loan. For Citieffe, the total loan is about EUR 9 million. Of which about EUR 1.5 million-EUR 2 million has to be repaid every year. Sorry, how much? EUR 1.5 million- EUR 2 million to be repaid every year. Okay. Thank you. That's it from my side. Thank you. Thank you. Next question come from the line of Sidharth Negandhi from CWC. Please go ahead. Hi. Just a quick follow-up on what you mentioned to Bharat regarding the overall growth aspiration. If I have to look at a 15% growth on the FY 2026 figure. That gets me to INR 3,000 crore out of a total of what we may have, and the remaining will then come from Citieffe plus PendraCare, plus any new acquisitions that we make. Is that the right way of thinking about that? Sidharth, you could help me, where are you doing the calculation? If you're looking at standalone numbers only, then you could also add standalone health into that. What I'm looking is INR 1,750 crore excluding PendraCare and Citieffe last year. Right. Okay. Which at 15% for four years gets me to about INR 3,060 crore. Sorry, I don't understand, because we've guided for a 2x on overall basis. I'm saying overall, if I look at 2x on INR 1,875 crore, that leaves me with a gap of about INR 690 crore. INR 690 crore is essentially PendraCare plus Citieffe plus any new acquisition. Is that the broad framework that we should keep in mind? I think the PolyMed standalone business will grow faster than the subsidiaries directionally because the European assets are growing at a certain pace. PolyMed has been growing much higher pace. I think even the same kind of growth may not be accurate. On a consolidated basis, we are saying obviously 2x, but PolyMed standalone will grow faster than the underlying subsidiaries. Got it. Just a clarification on the RM cost. This quarter, the reason we have the kind of gross margins we do is more due to the inventory that we were carrying plus the price hikes we took. Therefore, should one expect some impact in Q2 or that's not really the case? I think it is a mix of multiple things, includes price hikes, product mix, as well as the inventory sort of gains. As Himanshu mentioned early part of the call, we are guiding for more like the 68%-69% gross margin based on a standalone basis. Obviously that would mean that there could be some correction to what we have reported in Q1 as gross margin. Clear. Thank you. Overall EBITDA may remain the same depending because of the higher revenue which you have projected for coming quarters. Very clear, Himanshu, very clear. Thank you. Thank you. Our next question come from the line of [Bhavna] with [NEG Analytics]. Please go ahead. Hi. I wanted to know what is the tariff impact from the U.S. you're estimating for FY 2027? Which tariff impact? See, U.S. tariff in FY 2027? Yes. Currently, the duty is only 10%. If it remains where it is today, I think we still have a good pathway. If any changes happen, it may impact the business. All right. Thank you. Our U.S. exposure is not very big. This year also our exports to U.S. will be close to between $3.5 million-$4 million. It should not be a big issue today, if anything happens in the U.S. All right. Thank you. Thank you. Our next question comes from the line of Bhavya Gandhi with Bajaj Alternate Investment Management Limited. Please go ahead. Hi, thanks for the follow-up. Sir, if you were to break up the overall employee expenses and other expenses, how much portion of that would be fixed and how much would be variable as a percentage of sales? We have around 24% as a percentage of sales coming from employee expenses and other expenses also closer to 24%. If you can just help us. Yeah. We don't break up. Unfortunately, we won't be able to give you an answer right now on this. Okay. Just, I wanted to understand how much is the operating leverage which can still play out on a longer-term basis, not just one, two quarter or one or two years. Just wanted to understand on a very long-term basis, on a three- to four-year basis, how much could be the operating leverage that can play out? Yeah. As you understand, we are a manufacturing company, so we have a lot of blue-collar workers who are involved in production. That's also a very reasonable part of our total employee cost, which you see on a consolidated basis. That piece remains as variable. The rest all is fixed. Obviously, subject to productivity gains. Within the staff also, there is a fixed portion plus a variable portion subject to performance. It's a mix of things. It's tough to give a very ballpark number right now on the call. Okay. Sure. We'll take it offline. Thank you. Thank you. Our next question comes from the line of Girish Jain with KJMC Capital. Please go ahead. Yeah. Hi. Am I audible? Yeah, Girish. Please go ahead. Thank you for giving me the opportunity. Himanshu, you in the beginning outlined PolyMed 3.0. That was very helpful. As you mentioned, we are planning to double the revenue by 2030 by both organic as well as inorganic means. Yeah. Given the fact that we are now transitioning, or we have already transitioned from being product-focused to being therapy-focused, if my understanding is correct, are we looking to enter any new therapies or we want to expand within the given therapies which we are already operating in? Girish, I'll answer it straight away. Currently, we have just started these therapies. It was just started, maybe some were started last year or some year before that. These are very new. If you remember, historically, our infusion business is a 30-year-old business. It takes time to mature any therapy and there are a lot of regulatory roadblocks, which prohibit you from even moving out of the country because these are mostly critical devices, Class III devices. It takes much longer to register most of these products. Sometimes takes around two, three years to register a product and do clinical trials. I think we have enough on our plate right now with our existing businesses, and I don't think we'll be ready to launch anything new substantially in the next few years. Given the existing therapies which we are present in, would it be safe to assume that we cover almost 60%-65% of the consumables used in the hospitals? I don't think so, Girish. The market is very huge today. If you look at consumable market, there are many other therapies like peripheral vascular, neurology, urology. There are so many other therapies which, let's say, endosurgery. There are many therapies which we don't cover, gastroenterology. There are many big therapies we are not covering today. A lot of potential across different verticals. Again, it will take time to build a portfolio of products. As we move along, I think next few years, definitely there is some work happening in the pipe. I cannot disclose what we are going to do in the next two, three years on this call, you see. It's impossible. Right. I think you mentioned some time that we are seeing some bounce back in the Europe business, probably because of the inventory normalization. Could you comment on that and also give some idea of the working capital cycle? Have we seen any improvement in that? On the Europe side, we have already seen a growth of around 17% in Q1 compared to the previous year. I think the demand has come back. Also, we have added some new customers. We have some customer acquisitions also. I think Europe seems to be in a pretty safe and good place. We are back with the growth in the European market. On the working capital cycle, I think the cash conversion is still in the same level. In March it was 140 days. Currently, it's also in similar range of 140 days. Okay. Do we expect that to improve going forward? Sorry, Girish. Can you repeat that again, please? Do we expect that to improve going forward, the cash conversion cycle? I think it depends, I would suggest that currently we should read it like this, hopefully, maybe as time progresses and global situation normalizes, I think we may see some improvements. Because of high oil prices also, most of the export markets are a little choppy because of hard currency are not available in time in many markets where we operate. Now, as probably prices stabilize, oil prices stabilize, things will change and improve. Hopefully, the cycle should improve, I don't have a definitive answer today, hopefully it will improve. Girish, if I could just add to what Himanshu said. Given the current geopolitical situation and the war going on, the time for getting the product to the customer has also increased, which does tend to put pressure on recovery cycles because you can start getting your cash flows only once the product reaches, right? Given that situation, it's tough to give a forward-looking guidance on this at this point in time. Understood. Thank you, and all the best. Thank you. Thank you, Girish. Thank you. Next question comes from the line of [Pramod Bhatt], an individual investor. Please go ahead. Yeah. Thanks for the opportunity. I just have one question. From the portfolio, I see that most of the products are the existing products with some other med tech companies. Like, we don't produce something new. Do you have anything in plan that you are making something entirely new, which is not currently existing with other med tech providers? See, basically if you see, PolyMed has 399 patents, and I think we have also disclosed that in the presentation we put out. PolyMed has a lot of products which have breakthrough technology. I don't know who we are comparing with. A lot of companies do copy our products. PolyMed is a market leader in infusion therapy and a lot of other therapies we operate on. There's a reason we are able to make that kind of margin which other companies don't make. This industry basically works on two different parameters. One is product performance, where we have a global leadership there. Then, where our products are going to 125 countries because this is based on performance, nothing works on price. Second is ability to add innovation, innovative ideas on the existing product. The product may look similar when you look from a catalog perspective, when you use them or when a user sees, basically which is a clinician or a doctor, they will see the differentiation in the product. Okay. Thank you. Those patents are worldwide patents, right? Sorry, sir. Can you repeat again, sir? Means the coverage of those patents is not some region basis, right? It is a global patent. The patents are global patents. Okay. Thank you. Thank you, sir. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star one. Our next question comes from the line of Girish Jain with KJMC Capital. Please go ahead. Yeah, thank you. I just wanted to add on a question. Himanshu, did you mention about the new facilities you are getting operationalized, I think one you mentioned was in Noida, the other one in Faridabad. Any timeline? I am not able to hear very clearly. Can you please repeat the question? Maybe you are on a speaker phone, so I am not able to understand very clearly. Okay. Can you hear me now? Yeah. Much better, sir. Yeah. I was mentioning that during the call, you mentioned about two new facilities coming online in the future. Yes, sir. One is at Noida and the other one at another place. Yeah. Could you give us the timeline, when are they expected to become operationalized, and which particular therapy, if we have decided, which therapy they'll be focusing on? The one coming up in Faridabad, Palwal area, would be focusing on Orthopaedic and Transfusion Systems business, which we are expanding right now. Then some part of extra capacity expansion of Infusion Therapy will also go there. Talking about Noida we are already planning to expand our cardio business basically out of the Noida facility. Will they come online in this financial year? The Faridabad, Palwal facility should come online by March 27, most probably. That's the timeline we are looking at, so first quarter of next year. The Noida facility will come live in maybe commercially quarter one of FY 2028. Okay. Thank you. All the best. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you. Anuj, over to you team. Thank you, everyone, and thank you for all your questions, hope we are able to answer them. Let me assure you again to all the investors that the company is on a growth path. We have made systemic changes in the portfolio. Our overdependence which was there in the vascular segment now is now only 50%. There's a lot of diversification that has happened. We have moved more from low, medium technology to high technology business, that is where we are shaping up. Also we are adding more electronics in the business where our dialysis machine, our IVL therapy is run on machines, we are diversifying into higher category of business where they are more platforms than products itself. That's the change we are bringing in the portfolio, and that's where we see a growth. Most of the newer products we are developing today are import substitution products, and definitely that will help us to take more market share. As insurance penetrates deeper into the hospital sector, as one product penetrates deeper into the hospital sector in India, that will change the landscape where hospitals will look at more quality-oriented, cost-effective devices versus imported devices which we are using today, which are more expensive. These are the changes we see in the industry, and thankfully, this industry continues to grow at a good pace in India, the healthcare industry. As that industry grows, medical devices industry, medical technology industry, as one of the partners of industry, will grow in the same pace or even higher. Thank you again for your time, and look forward to talk to you soon. Thank you so much, sir. Ladies and gentlemen, on behalf of Poly Medicure Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines.