Poly Medicure Limited (NSE: POLYMED) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
Himanshu Baid — Managing Director
Naresh Vijayvergiya — Chief Financial Officer
Analysts:
Abdulkader Puranwala — Analyst
Vikram — Investor
Rashmi Sancheti — Analyst
Tanmay Gandhi — Analyst
Harsh Shah — Analyst
Kayuri Bafna — Analyst
Bharat Shah — Analyst
Nitin Gosar — Analyst
Sandeep Abhange — Analyst
Harssh Shah — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day, and welcome to the Poly Medicare Q3 FY ’25 Earnings Conference Call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Abdul Kajar from ICICI Securities. Thank you, and over to you, sir.
Abdulkader Puranwala — Analyst
Thank you. Yeah. Thank you,. Good afternoon, everyone. On behalf of ICICI Securities, I welcome you all to the Q3 FY ’25 earnings conference call of PolyMedicare Limited. Today on this call, we have with us the senior management team of the company. We. We are represented by Mr Himanshu, Managing Director; Mr Naresh Vijay Vargia, CFO; and Mr Rahul, President, Strategy and Corporate Development. I would like to thank the management team of for giving us this opportunity to host their call. And with this, I will hand over the call to the management. Over to you, sir.
Himanshu Baid — Managing Director
Thank you. Thank you. Yeah. Thank you very much, Abhul, for hosting this call. And again, good afternoon to everyone who is on the call and I’ll take you through the quarterly highlights of this quarter three of Polymedicure. Just to begin with, I’m sure you also have the presentation, which has been uploaded on the company’s website, but people have not seen it. I’ll just maybe highlight the numbers once again. So the consolidated revenue in-quarter three FY ’25 compared to FY ’24, you’ve seen a growth of around 24.9%. Revenue has grown from INR339 crores to INR424 crores. The EBITDA has also increased from INR91 crores to INR116 crores. And consolidated EBITDA — and talking about you about the operating EBITDA. Consolid EBITDA, we have seen a net improvement of around 65 bps roughly in that consolidated EBITDA compared to quarter-four — quarter three to quarter three. The PAT has increased from INR65 crores to INR85 crores. Our return on capital employed is around close to 23.9%. This excludes the amount raised to KIP in August, because that has not been deployed so-far. So that’s the reason we excluded this amount. But whatever deployed so-far has been — has given a turn of 23.9% ROC term. The net cash available in the company is close to around INR1,074 crores. This is net of all working capital and everything and which includes INR900 crores raised through of as out-of-the QIP proceeds of INR1,000 crores, INR100 crores are deployed in the working capital and expenses and rest is being gradually being used as new plants are being built as announced earlier in the QIP. The number of devices we have sold has also increased from INR26 crores to INR32 crores in-quarter. And number of patent additions has been around close to nine additions. So total patents are now 334. In the quarter, we have also added 23 new people in the sales team. Yeah. So this was the quarter highlight and I’ll also take you through the nine months summary for the preceding two years. So in FY ’25, consolidated revenue has started now INR1,229 crores versus INR998 crores, again an increase of 23.2%. So as you remember, recall in the earlier part of the year, we had given a guidance of close to 22% to 24%. See, we are very close on that guidance and we are very much within the range. Also EBITDA, if you look at percentage EBITDA has increased from 26.5% to 27.4%. There is almost a 95 EPS improvement and we have guided in the initial part of the year for EBITDA improvement of 100 to 150 bps. The consolidated EBITDA has also increased from INR264 crores to INR336 crores and PAT has increased from INR190 crores to INR47 — roughly INR247 crores. Again, number of devices sold has increased from INR81 crores to INR96 crores. And if you see number of sales associated added within this nine months is 64 people. So total strength is now close to 475 people. As initially — initial part of the year, we had also commented that we’ll be adding 100 more salespeople. So in this first-nine months, we have a net addition of 64 people. So we added more people, maybe some of them. So the net addition is 64 and this is especially across two new divisions, cardiology and Critical Care, where we added most of the people during the year. I’ll also talk about some few updates during the quarter. First, we received our regulatory approval, the CDSU license for DES stand and very soon we are going to commercialize the product. The first trend will be implanted in this coming week, first few strands. And as we go further, then we will see this commercialization along with the balloons to be launched together. Also, we had set-up a JV with in Ariana to give us 9.9 megawatt of solar power. Polymer has made a commitment of INR3.6 crores in this JV. And this is in-line with our goal of running our plant completely on green power. And hopefully, this will be operational by end of September, October. And after that, most of the polymer manufacturing facility will be running on green power. And this is in-line with our goal to reduce our carbon footprint by 30% by 2030. And also, you know, we are seeing a big change in the requirements in Europe where more-and-more focus is given to green energy products being produced using green energy. Also, we have recently done a groundbreaking ceremony of our new plant, which was also part of our — to be established part of the QIP proceeds. This poly plant is coming in Polwal, Haryana and this will be one of the largest plants of and hopefully, we should be able to commission it between July, August to maybe in that period of 2026. That is the current plan. You have seen that on the revenue side, there is a steady growth and also company has sufficient net cash balance also go for new capex. So current year capex is close to around INR22 crores in nine months and the plan was to invest close to INR300 crores. Now all this money has been invested through internal accruals. We haven’t used any money raised through QIP because this capex was done for existing plants. And more or less, by end of May or June, the capex in the current plants will be complete and then all the QIP proceeds will be used for the three new plants, which are under-construction right now and will go-live in 18 to 20 months. And also the company received the CII Industrial Innovation Awards 2024 and also received CII International Intellectual Property Awards 2024. So on on the margin side, I think there is a constant endeavor to improve the margin. And as we have launched two new category of businesses, oncology and critical care, so we have almost added 60 people in this category. Currently, these businesses are just brand-new. It will take at least two to three years to ramp-up and scale-up. But meantime, the current team is helping us to enter some new hospitals and also build-up the business for these new categories. So coming to the current scenario on the ForEx side, I think currently the company does not have any hedging, almost close to only 0.7% of hedging on the ForEx. So we have open exposure to all the ForEx. And I think with the current scenario, hopefully, this should be an helpful scenario because our markets being very volatile, it was prudent to stay open, say, keep our exposure open and not stay hedged. And as we have a net — you know, we are a net exporter of — and we have a net earner of foreign-exchange. So any fluctuation in foreign-exchange does not impact P&L in any way. So that is more or less neutral for us today. On the segment-wise analysis, of course, if you look at nine months, infusion therapy is the largest segment of the company, which is contributing close to around 70% of the revenue, followed by, which is now flows to around 8% to 9% of the revenue. But if you see the growth rates in infusion core business is around 25% in the first-nine months. And renal, where we had initially projected a growth rate over 50%, if we see the first-nine months performance, the growth is close to 56%. So that is now really taken off well and we have also expanded capacity, some new capacity is coming up in April also, which is currently under installation and hopefully, we’ll be able to scale business further up in coming years. Currently, the company holds around 10% to 12% market-share by end of FY ’25, we’ll have around 10% to 12% market-share in the renal category. And we continue to push more machines and push more products in this segment. So on the domestic business side, if you see the — we are back to growth in the domestic business and domestic business is now growing more steadily. If you see the previous quarter, domestic business has grown by 23.8% and we are — as I promised you in the last quarter that we are working hard to improve this growth rate. So we are now back to over 20% growth rate. As we had a first-quarter low-growth rate, so overall growth rate is only 16.7%, but now within the quarters, we have started growing better and hopefully, the current financial year, we should end-up more than 20% overall growth rate in the domestic business. Exports in the first-nine months have shown a great growth. They have been growing at around 28% closely. And if you look at the quarter itself has grown by around 30%. Overall, we are on-track to deliver the committed growth. In terms of geographical mix, Europe has overall grown by around 30% in nine months. Last quarter growth was around 20% and I think overall, we should end-up between 27% 28% growth for Europe by the end-of-the year, which is a very healthy growth. And rest of the world has also grown by around 27%. So if you look at the mix of the business, today we have almost 31% 32% business in India, followed by around 31%, 32% business in Europe and around 37% business in rest of the world. So 38%. So this is a mix which is very similar to mix which we had told initially in the beginning of the year and probably we will continue with the same trajectory till the end-of-the year as we see it right now. And so exports will be around close to 70% for the whole year and domestic business remain steady in 31% in that range. So these are a few of the updates on the business. And of course, we continue to be on the heavy capex cycle with plants coming up, additional capacity being built. And on the US business side, we are — we are building on the current product portfolio, revenue has started kicking-in. Of course, it will take some time. We see the first stronger wave coming in FY ’27 because we have some more products to be included in the list and they are undergoing some clinical trials and regulatory approvals. And they will also start contributing to revenue maybe end of this year or early next year. So that is what we are targeting. But from the current product also, we are expecting some good growth in coming — coming quarters. Of course, there are some changes happening in the US right now with the new tariffs coming in. So it won’t impact India as such. But I think as these tariffs are also in China and maybe even if it comes on India, it will be neutral for us because it will be equally applicable to all the countries. So we don’t expect any impact of these tariffs right now. And plus US business is currently a very small portion of our business. So we don’t see any impact of this tariffs on the current business. So I will stop here and then of course, I will let you ask — if you have any questions, please feel free-to ask me questions. And I’m very confident that we’ll be launching more products in the next few years. So in the current pipeline, we have close to 50 products, which we launched between one to two years. In last three months, we have launched around 15 plus products across our four different categories and there’s a lot of plans to bring more products and also we are trying to look at new opportunities in equipment space if we can expand that area also because our dialysis machine has been very successful. And now we have achieved a run-rate of close to 40 to 50 machines a month. And as time progresses, we see further increase in that capacity in the next year. So overall, we have a strong tailwind on the dialysis business and equipment business. So we will continue to build some new capabilities around that. With this background, I would like to hand over call-back to the operator to answer any questions that might be from the participants on this call. Thank you again for listening. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles you. The first question comes from the line of Vikram, who is an investor. Please go-ahead.
Vikram
Hello, sir. Can you hear me well?
Himanshu Baid
Yeah, I can hear Vikram. Please go-ahead.
Vikram
Yeah. I just wanted to know with regards to the drug stent, if you could share some more details like what are the addressable market, how does our product compare with the competitors any differentiating factor if you could?
Himanshu Baid
Basically, we have just entered the market. So we have a US entrant in the market. But again, you know what we are trying to do is also get drug-outing balloon with the product and most of the companies today import that product from outside. So your polymer is going to manufacture everything in-house and that will make us more competitive. And also we are looking at the construction of the strength. So our stent probably has the best manavability and that is what we will do. But of course, we’ll have to go through the clinical trial cycle and everything, which is going to take a while. But with the help of stand, we’ll be also able to sell all our cardiac consumers which we have launched recently, you know, whether our diagnostic catheters or our guide wires or let’s say, balloons, other balloons. So that is what it will help us to sell these products in the market.
Vikram
Thank you, sir. Any meaningful timeline for this product to be meaningfully impacting our revenues in the future?
Himanshu Baid
No. No, it’s a new product and only we can time will tell, but I think we are very confident with the approach we have, I think the business itself, we have already guided that it will take some time, but I think we are building it up for the moment, but I can’t guide you on a revenue number for this particular business because it’s too early. We just received the license last week only. Okay. Fair enough, sir. Thank you.. Just one be able to give you more information.
Vikram
Fair enough. Thank you. Just one question on the dialysis missions. Just wanted to know-how will this improve our margin profile in the future as this keeps growing, if there is any guidance on that? Thank you.
Himanshu Baid
So dialysis, as a business, you know, it’s a new business, four, five years-old business in the company. Well, let’s say, if you look at infusion, it’s around 25-year-old business. So this is a new business and now we are seeing a ramp-up in the capacity capability. And as we sell more-and-more products and the cost of doing business will come down, the operational cost. So definitely, it will help us to improve our margins. And for first three years, we are not able to get PLI. So our target is that next year also take PLI on the — because we already are under PLI, but as we were not able to fulfill the aggressive targets set on PLI, so we were not able to get it. So hopefully this next year financial FY ’26, you’ll also get some contribution from PLI for this business. I can’t quantify the number because
Vikram
Hello. Can you hear me, sir?
Operator
Yes, we can hear you. Sorry.
Vikram
Yeah. Just one question if I may and then I’m done, sir. So the last question I had was, just to get a clarity on the dialysis business, we are only selling the machines, sir. There is no lease model or rental model, nothing.
Operator
Ladies and gentlemen, please stay connected while we connect with the management. One moment please. Ladies and gentlemen, we have the management line reconnected. So you can go-ahead.
Vikram
Hello. Yeah. Thank you, sir. Just my last question is
Himanshu Baid
Something wrong.
Vikram
No, my last question was, sir, just to get the clarity on the business of dialysis machines. We are only into providing the machines no, sir, selling the machines. We are not into rental or leasing model.
Himanshu Baid
We also sell consumables, all the consumables.
Vikram
Okay, perfect. That’s it, sir. All the best for the future. Thank you.
Himanshu Baid
Thank you.
Operator
Thank you. A reminder to all the participants, you may press TR and one to ask a question. Ladies and gentlemen, you may press TR and one to ask a question. The next question comes from the line of Rashmi from Dolat Capital. Please go-ahead.
Rashmi Sancheti
Yeah. Thanks for the opportunity. Just need some clarification, the 50 product launches, which you said that over a period of one to two years and across four different categories. Yeah, these are what categories and these products will be launched in which all markets? Will it be exported also?
Himanshu Baid
Yeah, yes, first, so Rashmi, of course, we are not disclosing the product because it’s confidential companies business. But this is what we are developing. We’ll come across mainly across the core two categories, which you have just started, cardiology and critical care. And then followed by some existing — in vascular and in greeneral, we’ll add also few new products. So there are about 50 SKUs we are working on, which will be added across and we start with India first and then go to global market because we’ll have to wait for regulatory approvals to come from each country to serve in those markets.
Rashmi Sancheti
Understood. Got it. And your dialysis machine, you said that the run-rate now it is 50 machines. Yeah. So for nine months, how much we have done? And are we on-track to achieve 500 installation this year? No, we’ll not be able to do 500 installations this year.
Himanshu Baid
This year we’ll be doing between 300 and 350 installations. I don’t have a real figure, but it should be around 350 plus. And then next year, maybe we’ll double the installations.
Rashmi Sancheti
Okay. Until now, how much we have done? I mean right from the stage
Himanshu Baid
Number, right, Norish I can’t give any number right now.
Rashmi Sancheti
Okay, okay. The next question is on stents. Stent is already under price control and we are going for that particular product. Yeah. So what is the strategy behind that? And you know, is it that since it is a price control product, it will be like it will be a little low-margin business or
Himanshu Baid
So price control is at the upper-end of the segment, not at the lower-end of the segment. Okay. So there is a big delta between the X Factory price and the finished product price. So average tent price in India, Indian stands around INR10,000 to INR12,000. Whereas the price control is at INR40,000 set,
Rashmi Sancheti
40,000 x.
Himanshu Baid
Yeah, roughly around INR40,000. So there is a big delta available where
Rashmi Sancheti
Our price will anyways be lower than the ceiling price.
Himanshu Baid
Though nobody operates at ceiling, ceiling is the maximum which we can sell it. So nobody sells at the ceiling price.
Rashmi Sancheti
Okay. And to that extent, but we will be able to take the price hike only equivalent to the WPI rate, right?
Himanshu Baid
Yeah, yeah. So that’s fine. That’s absolutely fine, because there’s enough already margin on the table.
Rashmi Sancheti
And generally on the blended basis, your blended portfolio in the domestic market, generally, what is the price hike, which we take every year.
Himanshu Baid
Only it depends also sometimes the contracts are longer, you don’t get a price hike. But typically we can take between 3% to 4% price hike per year,
Rashmi Sancheti
3% to 4%. Okay, sir. Thank you. That’s it from my side.
Himanshu Baid
Yeah. Thank you.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question comes from the line of Gandhi from Investec. Please go-ahead.
Tanmay Gandhi
Hi, sir, congrats on a good set of numbers. Sir, my first question is on gross margin. So the gross margins have declined by good 300 bps sequentially, right? So this is largely due to the revenue mix or is there anything on raw-material pricing to call-out for?
Himanshu Baid
No, I think gross margin, I don’t see it declining so much. I think overall, I think gross margins still around 65%, I think, if you look at the number,
Tanmay Gandhi
Sequentially, I think the gross margin will decline.
Himanshu Baid
Maybe it’s because of the revenue last year. Otherwise, if you look at overall EBITDA margin, they remain the same. It is better actually.
Tanmay Gandhi
Yeah. And sir, so as there is no raw-material inflation that we are witnessing right?
Himanshu Baid
Not at the moment, but it may change depending on how things shape up in next few months. We don’t know right now than May. But so-far, I think see, we typically track EBITDA margins and of course, gross margin is around 65%, if that is within that range of 1% to 2%, I think we are pretty much fine with that.
Tanmay Gandhi
Understood. Yeah. And sir, secondly, if I look at your average realization per device is, right? So that comes around at INR12 to INR13. So just wanted to understand that what would be our load realization of products, which would be dragging the average realization?
Himanshu Baid
Because have really been the same. If you see, there is no change. If you look at earlier commentary also or maybe earlier quarters also has been the same. But the most important part here is, today if you see our growth is not probably — let’s say, the number of pieces sold is not directly. So we also have seen that if that is increased by 19 odd percent, let’s say, devices sold-in nine months, but the revenues increased by 23%. So that is what clearly showing that we are able to also take a better price from the customers. So if you look at the nine months performance and then if you have the presentation, if you look at the devices sold is — growth is 19% in nine months, whereas the revenue has increased by 23%. So that is what we are not tracking right now and that’s the reason we have shared this number that we want to track these two numbers also internally.
Tanmay Gandhi
Yeah. So I get the price growth point, right? But what I’m trying to ask is that what are the low-value products which are sitting in our base, which are.
Himanshu Baid
We don’t sell too many of those machines. So we are mostly a consumable company, consumers always price at low-point. Understood. Yeah, because we are making disposables. So disposables are not at very-high. Now we are entering the new space of cardiology and let’s say, critical care and oncology. So that there we will see more higher-priced products being sold.
Tanmay Gandhi
Right. And sir, with this stand approval, we have entered the implants category as well, right? So now probably we are across all three major categories, right? So is there any plan to enter more such implants? And how do you see implants as a category because this is — because I think this is
Himanshu Baid
We are already in oncology and we have also launched oncology implants, the ports, chemoports we have recently launched in India. So that is also another product which is Class II device and is implantable device. So we are getting more and now more into critical care. So longer-term used devices. Earlier devices were short-term use. So now we are more focusing on the longer-term used devices. And we are getting more into Class-3 category devices, which have a longer in dwelling time inside the body?
Tanmay Gandhi
Yeah, understood. But sir, how do you see implant as a category that what is the competitive scenario like and you know-how difficult it is to penetrate into new customers?
Himanshu Baid
Higher category is more riskier and the competition is more from multinational companies. There are couple of good Indian companies also like Merrill and all which are doing such kind of good implants. So I think there is a good opportunity to replace multinationals from this segment?
Tanmay Gandhi
Understood. Thank you.
Himanshu Baid
Yeah.
Operator
Thank you. The next question comes from the line of Harsh from Marcellus. Please go-ahead.
Harsh Shah
Yeah, hello, sir. Congratulations on yet again a good set of numbers. My question was on similar lines with the tonne raised with respect to gross margins and with respect to EBITDA margins. Yeah. With gross margins, I understand that it’s because of the revenue mix. Correct me if I’m wrong, sir.
Himanshu Baid
Yeah, I don’t because of revenue mix. As we see quarter-to-quarter revenue mix can keep on changing across the six product segments we operate in, large product segments. So — and that we don’t control, but what we control is that we stay around that 65% number and we control that EBITDA margin or what is our final EBITDA on selling the product. So that is where we are seeing and where we are seeing a constant increase in EBITDA, basically, the margin improvement.
Harsh Shah
Okay, got it. And sir, just to understand the business a bit better, could you help us understand what are the businesses which have a lower gross margins and what business?
Himanshu Baid
I don’t disclose the business. Sorry, that’s confidential. I cannot disclose that.
Harsh Shah
Okay, got it. And sir, with respect to operating expenses, there is almost a 9% drop on a Q-on-Q basis in that cost line-item. So here again, maybe if you can help us understand what has led to this drop?
Himanshu Baid
So is on the call,, can you explain that? Why operating expenses are down 9%?
Naresh Vijayvergiya
Yeah. Hello.
Himanshu Baid
Yeah,, the question from was that why operating expenses are down by 9% in the quarter.
Naresh Vijayvergiya
So the major drop is because we have some efficiency on expenses. There is a slight drop-in R&D expense and then there is some drop on legal expenses and travel also. So overall, it is 9%. So there is a slight drop-in quarter two quarters as compared to quarter-to-quarter. Okay. But there is no major item to be disclosed or something like that. No abnormal item.
Harsh Shah
Okay, got it. Thank you.
Operator
Thank you. The next question comes from the line of Kayuri Bafna with NAG Analytics. Please go-ahead.
Kayuri Bafna
Hi, I wanted to know what are the exports and which is the highest exporting products that you have in the company right now.
Himanshu Baid
Yeah. So basically exports revenue is almost close to 68% 70% and majorly exports come in the infusion therapy category. We have where we have a global leadership on this product category. And that’s where it comes from. And infusion, so we have IV and accessories around that business and that is where the major revenue is coming from.
Kayuri Bafna
Okay. Thank you so much.
Operator
Thank you. A reminder to all participants, you may press TR and one to ask a question. The next question comes from the line of Bharat Shah from ASK Investment Managers Limited. Please go-ahead.
Bharat Shah
Hi, Himanshu.
Himanshu Baid
Hello,, how are you, sir?
Bharat Shah
Yeah, yeah. All good at your end. I hope.
Himanshu Baid
Thank.
Bharat Shah
Himanshu, if we take a three to five-year view ahead, what kind of a growth rate we think is possible; B, how much of that is reasonably predictable for us? And C, whether it is a durable growth, something which can prevail for a longer period of time? And what are the various strategies at play in terms of product innovation and newer categories, geographies, manufacturing assets and resources, talent hiring, approval cycles, which can vary across geography and all of that. So how do we strategize for growth rate, predictability and its durability. If you can kind of — and thereafter on margins, how do you see over the coming period of, say, say, three to five years.
Himanshu Baid
But it’s a very, very long question, maybe a very long answer, but I’ll try to answer in a short while so that we’ll get a chance for other people. So on the growth side,, if you see from 2020 to, 2020, we had a growth of almost 14% to 15% on a 10-year cycle. And the company was capital-starved. But now as company has done some capital raise in last four years, so you have seen that the trajectory has now started changing. So last three years continuously we are growing around 20% and over. And even this year we have projected for around 20% over growth. So now we see that the new normal for this company should be 20% plus growth. And today for us, maybe or maybe if you look at, let’s say, our predictability, let’s say, predictable growth for this company as we have seen already four-year growth cycle now from FY ’22 to ’25 numbers, which already be almost — we are nine months over. So we are almost at that 20% cycle, basic growth cycle plus cycle. So the orbit has changed from 14% to 20. So that is number-one. Number two, I think to maintain this growth, I think India is a good driver for us, great growth driver. And as we increase more-and-more deeper presence in India, so our India presence is today still we are not covered two-thirds of hospitals in India. They only covered one-third of the hospital. And even in the current hospitals, our, let’s say, wallet share is less than 20%. So we can increase our wallet share in the current hospitals and also cover more-and-more hospitals as time progresses. And for that, we need to hire more-and-more people. And if you’ve seen in the presentation, sir, we have already added this year 64 people. So we’ve added post to from 410 odd people, now we have 475 people in the company in sales and marketing in domestic. So we continuously adding more — and all these are company employees. So we are adding continuously, let’s say, every year we’ll add 100 odd people for next three, four years to maintain that domestic growth and international markets also, we are actively working on US strategy, we are working on Europe and we think that within these two important geographies and some other developed countries, we will be able to achieve export growth rate also in north of 20%. And if you see our last four, five years history, we are already growing over 20% in export market. So I think growth rate is more or less now with additional capacities built-in, additional plants built-in and with more capex happening. So even if you see capex cycle, which was maybe INR10 crore IN 120 crores pre-COVID has gone to around INR200 crores INR250 crores post-COVID per year. So that helps us to put in more plants, put in more products, invest more in R&D, launch new products across different categories. So this is what we are seeing in terms of growth rate durability. Market is robust, Indian market is very robust, government focuses on Make in India. So lot of import we are bringing in the business. So all that is simultaneously happening, sir. And on the margin side, I think we have already projected close to 27% EBITDA margin for this year. Last year, we’re close to 26-odd percent this year, 100 bps improvement, 100, 150 bps. So we are already in that range. So as we see operational efficiencies — efficiencies coming in, so every year we could increase margin by 50 to 100 basis-points easily next four, five years. That’s what the plan is.
Bharat Shah
I see. So what I understand from this and I’m summarizing, correct me involved. So what we are seeing is growth change and instead of early double-digit, it is now healthy double-digit in 20s.
Himanshu Baid
Correct. Correct, sir.
Bharat Shah
So the growth in is no longer only exports, it is both exports and domestic where perhaps domestic market can burgeon and become even a larger growth rate engine possibly.
Himanshu Baid
That is correct, sir. Absolutely correct.
Bharat Shah
Our product innovation strategy, manufacturing, asset putting strategy, people hiring strategy, the people on-the-ground, all are aligned to ensure that these results we can obtain in a predictable, sustainable way rather than with ruptures.
Himanshu Baid
And the business is more predictable now because today we have contracts with customers, India Global, we can project what we need to do, the production lines are getting aligned with that. So everything is more predictable, sir than what was maybe, let’s say, 10 years ago or five years ago.
Bharat Shah
Okay. And finally, margins will improve for a scale reason, be it a kind of a more complex and higher-margin, new vertical size, so cardio debt we are entering.
Himanshu Baid
Correct.
Bharat Shah
A little bit put together along with the scenario of the opportunity both in India and abroad and next three to five years, this kind of healthy growth with improving margins is something which is fairly predictable.
Himanshu Baid
Yes, it’s fairly predictable. Of course, we don’t know what is going to happen every day something is changing. But when we go on a predictable analysis analytics, I think this is pretty much possible.
Bharat Shah
Okay. One last thing,.
Himanshu Baid
Sir.
Bharat Shah
And if anything were to go wrong in this scenario. In your opinion, what, what could that be?.
Himanshu Baid
I think — see, I don’t think so. I’ve been running the business for 28 years now and have not seen healthcare is one area which is not going to go wrong. You know, the demand is not going to shrink, you know — and with government more focus you have seen in the budget for yesterday, Bharat has more allocation. So they are trying to bring in gig workers. So more-and-more focus is going to be healthcare, wellness and also medical tourism, there is some focus. So Indian hospitals will continue to do better only as more-and-more patients will flow-in. So only sir, things can go wrong, we make bad quality product.
Bharat Shah
And how do we targeting that rate,, failure to products, liability.
Himanshu Baid
We have zero, we touched what in 20 years, we don’t have a single broad liability claim. 28 years history, I’m talking.
Bharat Shah
But we take liability insurance, right?
Himanshu Baid
Yes, we have a liability insurance, yes, sir.
Bharat Shah
So to summarize, superior growth with improving margins across both India and other territories with verticals and more products. So deepening and widening of the product portfolio with the talent pool is something which gives us predictable, sustainable belief about where our destiny is.
Himanshu Baid
Absolutely, sir.
Bharat Shah
Okay. Thank you,. All the very best.
Himanshu Baid
Thank you, sir. Thank you very much.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we request you to rejoin the queue. Thank you. And the next question comes from the line of Nitin from Bank of India Mutual Funds. Please go-ahead.
Nitin Gosar
Hi,. Just one question. Wanted to understand I think you called out that the — from hedging policy point-of-view, right now 1% of our exports is hedged.
Himanshu Baid
Yes.
Nitin Gosar
And A, how should we see this hedging policy? Currently, currency is in our favor, but at times it can cut both the sides. So should we believe that as a management, we would like to keep it open or we would like to hedge it as well.
Himanshu Baid
We will not hedged. See, I’ll tell you why. See, we have already burned our fingers many, many years ago in hedging. And some more informed person there who was in us and because you’re a banker, I’m not going to call-out. But you know, we burnt our fingers already. And I think what we have seen over the past eight, 10 years of without any hedging, it gives us more better visibility. And as we have a positive net flow of foreign-exchange, and like say, for example, we have almost $70 million, $80 million positive from foreign-exchange after covering our imports and capex. So there is no need right now. And I think with rupee 10-year history, you can always predict that every year is going to depreciate 2%, 3%. So I think we can’t go wrong because we have a 10-year history now. Yeah. Well, the last cycle where we had was 2012 where we really took a bad 11%.
Nitin Gosar
Yeah. Sorry, if I were just to just impose one more question on the same scenario.
Himanshu Baid
Yeah.
Nitin Gosar
If, let’s say, currency right now, which is closer towards 86% moves back to 84, which can slightly compress our gross margin?
Himanshu Baid
No, it will not because then all other costs will go down, our raw-material cost will go down, other light cost will go down, let’s say, yeah. And then rupee is — yeah, if rupee is, let’s say, appreciating, it will also impact the other side. Interest rates will come down.
Nitin Gosar
Okay,. Yeah. And one last question is on the employee cost. So right now, since we are on the addition sphere, the current quarter number of around INR78 crore on employee side, does it capture the recent hiring into numbers or
Himanshu Baid
These are all recent hiring. So that — because that 64 people have added during the year, only in sales and marketing we’re talking right here. So a lot of people have been added in manufacturing and other activities, regulatory, quality, engineering, R&D. So that is not included here.
Nitin Gosar
Okay. Okay. Yeah.
Himanshu Baid
The reason we are calling out because that is the organization we want to bring more strongly right now.
Nitin Gosar
I take your point because you have been calling it out, you want to improve the reach in India.
Himanshu Baid
Exactly, exactly. That’s correct. Absolutely correct, sir.
Nitin Gosar
Fair point. Thank you. Thank you. Thank you.
Operator
Thank you. A reminder to all participants, you may press TR and one to ask a question. Ladies and gentlemen, you may press R and one to ask a question. The next question comes from the line of Tanme Gandhi from Investec. Please go-ahead.
Tanmay Gandhi
Thanks for the follow-up. Sir, my question is on the US tariff, right? So basically, you know, if the government were to put tariffs on Chinese and Mexico export side, so will that you create any risk of dumping by these exporters in-markets like Europe, ROW markets?
Himanshu Baid
So I think, I think it’s very clear, these are essential products, right? And it will be very difficult overnight to — US hospitals cannot run-out of products. You know, you still need them. So eventually what we’ll do is add cost to the patients or cost to the hospitals in the network. But it’s not good that they’ll stop buying. But if they stop buying, they can’t take care of US patients in hospitals. It’s a necessity, it is not — it’s an optional thing..
Tanmay Gandhi
Understood. So basically, you don’t really see any risk of dumping of these products in other markets.
Himanshu Baid
And why dumping with India, there is to be a consumption. Even if you dump extra Indian market, who is going to use it?
Nitin Gosar
That’s correct. But sir, if the — but the same case is with the pharmaceuticals as well, right, where the supply is enough right and that is for something which drives a price erosion, right? So though the demand may not really go up, but again, if the supply is more than probably
Himanshu Baid
You may see pricing regulated on this area and you’re
Nitin Gosar
Talking about India, I’m talking about Europe and demand.
Himanshu Baid
I think it’s going to change much. See, everywhere we have contracts now, the business runs off. It’s not — it’s not a daily business. Today they’ll buy from it tomorrow they’ll buy for somebody else, right. And also we have a very strong polymer branded business. It is contractual.
Nitin Gosar
Understood. Understood.
Himanshu Baid
Yeah.
Nitin Gosar
Thank you.
Himanshu Baid
Otherwise it will impact every industry, not a polymid. It will impact every manufacturer who is selling products into US or Mexico or Europe, everybody gets impacted the whole Indian economy will get impacted. There is nothing on polymer specific then.
Nitin Gosar
Right.
Himanshu Baid
Yeah.
Nitin Gosar
Thank you, sir.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question comes from the line of Sandeep with LKB Securities. Please go-ahead.
Sandeep Abhange
Yes, sir thanks for taking my question, sir. Can you — yeah, can you give a breakup on your product categories like infusion therapy, renal, blood transmission, anesthesia and respirator, etc., if you can give broad breakup of FY ’24 from the FY ’24.
Himanshu Baid
So Sandeep, we only call-out two important businesses, which are — which are material right now, infusion therapy and renal and that we have already given their disclosure in the presentation. If you see the presentation, you know, renal is 800 — sorry, our infusion is INR800 crores out of INR1,181 and renal is INR104 crores out of 1,181 for nine months. And then rest of the products is INR276 crores, which is five to six different categories of product there right now. We don’t call-out them because they are not significant under 5%.
Sandeep Abhange
Okay. Okay. And sir, as far as renal is concerned, we have seen a good growth in terms of last three years like around 30%, 40% and this year we have seen still almost 56% kind of a growth rate. So what could be the trajectory ahead for the renal business? And like currently, I believe it is somewhere around 7% to 8% of your overall revenue. So what could be the trajectory we can expect going ahead in the year to five years?
Himanshu Baid
Yeah. So we are expecting this business to grow faster, let’s say, in next couple of years at least, because as we are replacing imported products in the market as we are the only producer of this kind of products in India. So that is what is changing the landscape. But what has happened is good news is that government has increased reimbursement rate for dialysis treatments. So from INR1,200 order base gone to INR1,800 under national dialysis program and Bharat. And also government has given permission to open standalone dialysis clinics. So we have been talking to the dialysis chains like and Apex and all other big ones, which are operating in more organized way. And they are predicting a growth of around 25% to 30% in their businesses in dialysis chains. And plus with more standalone dialysis cleaning earlier dialysis clinics were only allowed within the hospitals. Now as government has recently-announced daycare cancer oncology centers. So now they are also opening day care dialysis centers. So that will also maybe growth helping growing the demand for this product. So — but our target is to maybe reach, let’s say, by 2030 around 22% 25% of the market-share
Sandeep Abhange
Okay, that’s great. That’s helpful. And one last thing I wanted to understand on the margin front, like there have been quite a few questions and so just wanted to understand like 27% kind of a margin. So like you earlier mentioned that you are expecting at least 50 to 60 basis-point increase in margin every year. So do you think it is achievable for the next three years? How we look at —
Himanshu Baid
See, as we improve our operational efficiencies, let’s say next year also we grow, let’s say, 20%, for example, revenue,
Sandeep Abhange
Right.
Himanshu Baid
Then the expenses will not go in the same proportion.
Sandeep Abhange
Absolutely.
Himanshu Baid
So then definitely we will see some margin improvement there because this year, we have started two new business. So I’ve got 60 new people who are not giving me full productivity in sales and marketing because they have just joined and they are this part of the new division.
Sandeep Abhange
Right.
Himanshu Baid
So as time progresses, you know these people will get more productive and then probably we’ll see so overall this number should be achievable, you know. In any manufacturing space, if you keep on improving revenues and definitely we will get some advantage of operational efficiencies.
Sandeep Abhange
Okay. Okay. And sir, on the capex front like how much capex has been done till now and what is the expectation of capex?
Himanshu Baid
In nine months INR22 crores of capex. And where we have budget of INR300 crores. So — and that — that and probably another few more months of capex in FY ’26 will then probably our capex cycle for the old plants, which were established between ’23 and ’24 will be over. And then we will focus on the new plants which we are establishing three new plants, which we are establishing — we have just started building those plants, hopefully ready in 18 to 20 months and that is where we’ll be spending close to INR400 crore to INR500 crores.
Sandeep Abhange
And all of project will be used for that.
Himanshu Baid
Correct. There is a segmentation and process of INR500 crores was for new capex and that is where we will be using it.
Sandeep Abhange
And that would be for over two years like by how you are expecting
Himanshu Baid
18 to 20 months basically to build a plant and get all the regulatory approvals.
Sandeep Abhange
Okay. Okay. And sir, on the acquisition part also, like you had earlier mentioned in previous con-call that you are also eyeing an acquisition on majorly in the critical care or maybe oncology or cardiology space. So have we bought boiled down any acquisition targets in this space?
Himanshu Baid
Something we’ll definitely announce. So-far nothing. But if we have anything, we’ll definitely announce.
Sandeep Abhange
Okay. But some of the QF proceeds would be the result for that
Himanshu Baid
Designated for acquisitions.
Sandeep Abhange
Right, right, right. Okay. Okay. Thanks so much.
Himanshu Baid
Thank you so much.
Operator
Thank you. I reminder to all participants you may press TR and one to ask a question the next question comes from the line of Harsh Shah from Dalal Bosha Stock Broking. Please go-ahead.
Harssh Shah
Yeah. Hi, thanks for the opportunity. Just one question from my side. So any sort of role we could be playing, say, in the drug delivery devices. So when I say that it is more to do with the injector space, the auto-injector spend injectors. I mean, do we have that expertise or anything we would like to enter? Or
Himanshu Baid
We already make combination devices. So we make like blood bags, which is a combination of device plus drug. So in blood bag, there is a CPDS solution which goes with the bag. We also make prefill syringes, which is a combination device. So we are in combination devices and it again depends on the opportunity because most of these devices are sold by large multinational companies because they have the expertise to bring the drug out and they rely on devices for other companies. So it depends on our partnerships and maybe future trajectory, but we’ll continue to explore more opportunities in this area for sure. Because already we do some kind of products in that category.
Harssh Shah
Yeah. Got it. Yeah. That’s it from my side.
Himanshu Baid
Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Himanshu Baid
Thank you again everyone for asking great questions and thank you for your support as always. And as we continue to close — move-in a good direction at a steady pace. I think in our annual earnings, we’ll be able to give you more finer projections on our next year’s numbers and how we will fare depending on how our new plants and our new products shape up in next few months. So thank you again once again and please stay-in touch. Thank you.
Naresh Vijayvergiya
Thank you. Thank you.
Operator
Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.