Poly Medicure Limited (NSE: POLYMED) Q4 2025 Earnings Call dated May. 07, 2025
Corporate Participants:
Himanshu Baid — Managing Director
Rahul Gautam — President Strategy and Corporate Development
Analysts:
Nitin Gosar — Analyst
Rashmi — Analyst
Ravi Kumar Naredi — Analyst
Abhas Dua — Analyst
Virti Shah — Analyst
Rahul Deshmukh — Analyst
Jasdeep Walia — Analyst
Harshi Shah — Analyst
Girish Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Polymedicure Q4 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Himanshu. Thank you, and over to you, sir.
Himanshu Baid — Managing Director
So thank you very much for hosting the call. Again, good evening to everyone within the call and I’ll give you the quarterly highlights, quarter-four highlights and also the annual numbers for the next 15 20 minutes. And again, I’m sure you have seen the presentation, which we had posted already to — for all our investors on our website. So just to highlight the numbers once again.
For the quarter ended March ’25, we have a consolidated revenue performance of INR440 crores, that is around 6.5% growth over last year. And also operating EBITDA for the whole quarter is around INR119 crores, INR19.5 crores against INR96.5 crores over last year’s performance. And overall EBITDA has also improved from 25.5% to 27.1% for the quarter. And also we see PAT improvement from INR68.4 crores to INR91.8 crores. So that’s the quarter performance.
On the annual side, again, if you look at the numbers from INR13 crores INR75 crores, we have gone to around close to INR1,670 crores, a growth of around 21.5%, roughly. Again, margins have improved from 26%, EBITDA from 27.1%. So overall EBITDA has improved from INR357.7 crores to INR458 point crores. And again PAT margin — PAT has increased from INR258 crores to INR38.6 crores. So if you remember the guidance we had given in the beginning of the year, on a standalone basis, the revenue has increased from INR1,307 crores to INR1,601 crores, so which is close to 22.5%. So we had given a guidance in the beginning of the year between 22% to 24% growth rate. So we have — we have actually within the range of the target, which guidance number which we had provided in the beginning of the year. So we will very actively able to forecast our revenue and our projections. Even on the margin side, if you see the EBITDA margins also improved by close to around 100 bps or over 100 bps and that was also guidance for the year in the beginning of the year where we called out for a margin improvement of 100 to 150 bps. So we are in the range of what we had projected in the beginning of the year.
So again, coming back to the revenue mix, our domestic business overall increased by 18.6% on a standalone basis and export revenue increased by 24% from INR889 crores to INR110 crores. The biggest highlight in the in the domestic business was the growth in the renal business and the renals business had grown significantly by 60% for the whole year. And that is what we had called out. We had called out a number of around close to INR140 crores to INR150 crores for renal business for FY ’25 and we have — we have actually did over INR150 crores for the — for the — for the whole year and it has been our main growth sector in the current year. And also as we grow forward in FY ’26, we also anticipate close to 50% growth in the renal business as we go-forward in FY ’26. So we are pretty much increasing our market-share here. We are also selling more-and-more machines. So this year, our plans are to sell between 500 and 600 machines between that number, so close to 40 to 50 machines a month.
Totally, we have now installed-base of over 500 machines. Last year, over 350 machines were sold. So now we are gaining more-and-more market-share for the domestically produced machine, which has around 50% local components and also the dialysis market is growing because the reimbursement rates have changed, the rates have increased from to INR1,800 rupees and that is probably bringing more-and-more service providers opening more centers, standalone centers in the country. So that’s a big plus for the company.
The second big plus is our Critical care division, which just started last year and this division will greatly benefit from the 200 dialysis centers with — sorry, the oncology centers, the Government of India has announced this year and there will be total 700 centers in — for next three years. So oncology business sits in our critical care business. So that will greatly benefit from this government policy of making standalone centers for drug delivery and oncology. And so this is something a tough sign for us, and we are very hopeful that Critical care segment also grew by almost 2.5 times in the current year over the previous year’s numbers.
Our cardiology, we have just started last year. It was a first-six, seven months of launch and this year will be a full launch because our DES which was approved, as I mentioned in the last call-in February. So we have commercially launched the stand-in the market end of March. And now we are seeing the sales hitting at this moment. Already implanted around 200 plus tents, 100 plus was done within March. Now we have almost done 200 plus tents as we speak right now and we have a good report around that. And we are also going to establish a clinical registry in next few months, it will cover over 2,000 patients. So again, that’s a big move we are going to do and we’ll announce it as soon as we finalize all our contracts and parameters around that. And some portion of that of those trials or clinical trials will also be happening in Europe.
So that’s on the business, we’ll be launching also the balloons and certain gatherers, this year, which are scheduled to be launched this year. We are waiting for some licenses from CDSCO and as soon as we get those licenses, we’ve been a position to launch those products.
The balance sheet is of course very healthy. We have a liquidity position of INR420 crores as of March ’25. Of course, you know, we are looking at some new opportunities in M&A side. And as soon as we finalize something, we’ll definitely get back to you with the proper details. So we are a constant look out for good technology, good companies in India or outside India and our endeavor is to — that Polymed should be focusing more on technology in future, so that we can build solid platforms across our new verticals like cardiology, critical care and regional portfolio. So that’s where our focus is.
And we are also looking something outside these areas and if you find a technology which is suitable to India and for global market, we’ll definitely work on that side. So these are some of the newer things we are doing. Last year, we have launched over 30 products. In FY ’24, we launched around 18 19 products. Now we have to move — we have moved around 30 new products, which will launched in FY ’25. So that’s a Big — because in cardiology critical care, we have launched a lot of new devices and that’s a big change from our past strategy of only launching 10 to 12 products a year. So a lot of acceleration in R&D and new product launches and across these new divisions. Also, today, we have also signed recently a contract with Zemba is a global coalition of companies working to accelerate on decarbonization of ocean freight and Polymed is one of the only few companies which have signed this contract from India. So most of our goods will be carried across two different continents through ocean, freight will carry green fuel and that is what we are targeting right now. And that’s a big push towards our environmental compliances and building a sustainable manufacturing ecosystem. Also, we have signed a contract with, which we announced a few months ago that most of the energy will be used in our companies, especially in area where we have most of our manufacturing will be green energy which is generated through solar power and we are going to establish a 10 almost 9.5 megawatt solar power plant, which will help us to energize all our factories with green power. And I’m also very happy to announce that recently Polymed, you know, as a company, I received an award on behalf of the company as we were entrepreneur Year award 2024 for Life Science and healthcare. So this was a great recognition from the industry and the peer group about the progress Polymide has made over the years in medical device industry and that was a great honor to receive on behalf of all our employees, all our stakeholders last month. On the financial side, of course, we continue to accelerate. Again, we have guided this year again for a 20% revenue growth. Overall, we may face some little bit headwinds in export business, but we are very bullish on the domestic market where we are expecting a growth of around 30% to 32% for the whole year. And that’s what we are targeting this year will make a significant progress and so has our transfusion and vascular access business. So we are very bullish on growing market in India, we have done a lot of work. So from that first-quarter of last year, we grew only 6%. All the other 3/4, we have grown over 23% 24% in domestic business. And now as we have achieved certain momentum, so I think now we will see a much bigger growth rate in coming quarters and in this current year. Exports, I think know we — we will see a growth rate between 12% to 15%, that’s what we see this year. And of course, after a few months, we’ll have more clarity how things are shaping up because current geopolitical situation is pretty fluid right now. And of course, we will wash it out. But with the current contracts, we have, current visibility have we don’t see any reason will not grow 12% to 15%. So overall, we see average both the growth where one-third revenue comes from India, two-thirds come from export. So we should be able to hit our 20% goal you should be able to hit that very easily. And also on the margin side, I think we still expect margins to remain between 25% to 77% of EBITDA. This is where we are guiding today. Hopefully, we should be able to do better, but this is what we will guide for the moment. And then as time progresses, we’ll have much more clarity on these issues. So these are some of the updates from my side. And now ask all the people on the call and if there are any questions, they’ll be happy to answer them and happy to receive some feedback from results. Thank you so much and again back to 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 star in one on their touchstone 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles.The first question is from the line of Nitin Ghosal from BOYSM. Please go-ahead,
Himanshu Baid
Hi, everyone.
Nitin Gosar
Hi,. Thank you. Congrats on good set of number again. Sir, just wanted to understand a couple of days back India signed an free-trade agreement with UK. I believe UK, Europe has been one of our dominant geography when it comes to export. Yeah, with FT keeping in mind, does it help our business to any extent?
Himanshu Baid
See, I think it’s a very big move. See, currently, we already have a presence in the UK market, almost 5% to 6% of our revenue is coming from UK from the export side. So what we are seeing right now is that the NHS, which is one of the largest consumer of medical devices, I think there we will benefit a lot because now with this long-term FDA being signed, at least the structure — the carriage structure remains constant and this will help companies which are working with NHS and with us directly, I think they will see a longer runway to procure products from India.
Also, we have a strategy to go-direct because we have a subsidiary in the UK now. So we also have a strategic — intend to go-direct in the UK market through our subsidiaries. So that is also a big move for us because it will help us to recruit some people on a temporary basis and also with access the market directly. And the next thing I think on opportunity on the CDMO side, right? So many companies can see India is a long-term partner to develop design and manufacturing capability in India and to address the UK market.So overall, I see as a very positive move for at least for medtech sector.
Nitin Gosar
When I hear your commentary in terms of outlook for FY ’26, we are slightly more lower on the growth, not exactly muted, but slightly lower. Is it more to do with US as a tariff which is creating ambiguity around?
Himanshu Baid
Yeah, I think you’re right, Nitin. So everybody is in a flush right now. So nobody knows what’s happening. So some people who are 10% ago, we have a winner here, but suddenly they are not the winners. So we don’t know who is going to win, who is going to lose. So I think it’s a global — last few months is a global turmoil in the whole global trade. So trade markets have kind of stalled little bit. But yes, we are in a healthcare business where we may not see a downturn because people need products. So I think it’s a matter of time and I think because we are in a situation what we are seeing today and yesterday and day before, we are commenting like that maybe three months from now we have a different outlook altogether.
Nitin Gosar
Yeah. And just to understand on the US tariff part, supposedly, hypothetically if there is 10% tariff, how does it affect our cost positioning vis-a-vis decompeting the?
Himanshu Baid
I think 10% what has India negotiated now with UK also. I think on most of the products close to 0% to 4% revenue. And so almost we are giving a free access to those margins. I think similar for medical devices which have an inward duty of 5% to 10% in India and Indian exports are almost like 2% to 3% duty, I think 2.5% or 2.75% duty. So I think on the recipe broker side, if India matches that, I think the duty will drop to around 4% to 5% for Indian products also, whereas China, even in the Biden era, there was duty on medical devices from China.
But what I feel personally is, India will get a leeway because we have a strong pharmaceutical industry, pharma, medical devices, all are clubbed together. So I think we will see a better tariff structure for Indian products. And I think now we are also getting a lot of inquiries from US customers who are looking at India as an alternate there. So it’s going to take a long-time, it’s not an easy win or near win. But I think in the long-run, I think India would be a winner.
Nitin Gosar
Got it. Got it. And one last bit on margins where you said the range is between — on guidance around 25 to 27, but a certain degree of optimism as well. So it can be 27 plus as well.
Himanshu Baid
There is no point here is again the situation we are in today and yes, and it’s very hard to comment and I don’t want to be overcommitting and under-delivering. So I think let’s have a — Anyways, company is doing fine, we are doing this. Yeah. So I think the business is in a good shape, is in a good auto mode, but the only thing is that let’s be cautious, conserve our capital, conserve our energies for a bigger opportunity is going to come to us.
Nitin Gosar
But just to understand your thought process, what scenario can result 25%, what scenario can trigger 27 plus? If you can help us understand these two scenarios?
Himanshu Baid
I think, see, if the export growth gets lower than, let’s say, 12% to 15%, then we may hit a 25% number. But if export growth continues in north of 25% — 15%, then we could still hit that 27% EBITDA margin.
Nitin Gosar
Okay. So we want export to be 15% plus that will —
Himanshu Baid
Yeah, that’s what we are targeting and that’s what should happen. That’s the minimum number internally simulated. And I think we should be able to achieve it though we have done in the earlier years around 23% 24% growth also last year was 24% growth in exports. So — but I think two, three months, I think end-of-quarter one, one-quarter do we’ll have more clarity as in the quarter. This is a very difficult year for everyone.
Nitin Gosar
Agree with this stuff. Yeah. And thank you and wish you best for the upcoming year as well.
Himanshu Baid
Thank you, Nitin. Thank you so much.
Nitin Gosar
Thank you.
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 two per participant. The next question is from the line of Rashmi from Dolat Capital. Please go-ahead.
Rashmi
Yeah. Thanks for the opportunity. So follow-up from the earlier participant only. In-quarter four, we have seen a slowdown in the Europe business and you also mentioned because of the tariff disturbances and all. So in Europe, specifically, which countries you have actually seen such slowdown and going ahead in FY ’24?
Himanshu Baid
Rashmi. So good question, but we don’t call-out separate the countries because it’s a very confidential information. But in general, there was a slowdown coming from — mainly from countries in South Europe. So I think that’s where we had a slowdown. And I think as time progresses, I think it should come back because in most of the countries, there was supply-chain disruptions, maybe over stocking. So all those things were a combination of factors. And nobody knows where the tariffs are coming, what is going to happen to China and how they’re going to take it up. So there are certain things. So it’s everybody, I think we have still done very well in growing our exports by 14%. Most of the companies which are in medical devices have not grown at all-in exports.
Rashmi
Okay, okay. And you know, coming to the category-wise in infusion therapy in India, how is that progressing? I mean, what is the expectation? Like in the renal segment, you already said that we would be able to grow 50% sort of growth even in FY ’26, but what is happening in the infusion category? What kind of growth are you seeing in that business?
Himanshu Baid
So I think in infusion category, we are looking at a growth of over 18% to 20% in the current year. And I think that’s the number we have internally set as a benchmark. And I think markets are growing, there’s a lot of consolidation happening in the hospital sector. You already see a lot of mergers happening. So that is — and wherever we have presence in one hospital chain and they are merging. So it gives us an automatic into the next hospital chain. So — and that’s what we have seen over last one year. So our presence in chain hospitals have increased considerably. And I think that’s what we are seeing more corporateization and, which is operating today in a higher mid-tier to higher segment in the category. So we are able to also — and you have seen that we have worked very hard in the domestic market in last one year. So I think that is what we will call-out as, 18% 20% growth rate in across the business.
Rashmi
And this 18% to 20% considering both India as well as the export market, right?
Himanshu Baid
Okay, not called out export there is more on India. Just more on India business.
Rashmi
Got it.
Himanshu Baid
We called out India’s all called out.
Rashmi
Yeah, yeah. Okay, got it. That’s a clear clarification. Another thing just in the renal segment, you know, with some of the distributor checks and all, what we understood that even though we sell dialysis machine at a discount to the market leaders like Freshness, Kabi and Nitro and you know they are already the market leaders very well still penetrated in the Indian market and we are second to them. Them, I mean in-between. And we do have you know other sort of players like Chinese players who are basically even discount to our own pricing, what we are selling it to the customer. So at a very low pricing. So we are somewhere in-between. So you know, just to understand that what strategies are you taking in order to get more acceptable by the customers because somewhere we feel that we are in-between.
Himanshu Baid
So I think so,, let’s understand, most of these companies you called out the names, initial names like and Nipro have been in the market for 40 years. We have installations of over 40,000, 40,000, 50,000 machines across both the companies, whereas we have installation of only 500 missions. We are newest entrants entered just a year or year and a half ago with that product-line. So we are building our team of engineers, application team. I think the service is going to make a difference. Chinese don’t offer any service. So that we can take this advantage.
They don’t have any service backup or engineering backup in the country. They don’t do any trainings in the country. So today, every customer is looking for a service backup for trainings, application training, technician training, and that is what we have been doing for last one, 1.5 years. That’s the reason we are able to sell 350 machines last year. So now that this year plan is 500 to 600 machines, as I mentioned earlier.
So the servicing, the continuity of the machines, because we’ll be able to very quickly if there’s a machines repair, we are able to sell our technicians very quickly there to repair the machines and to manage those machines. And as we are putting more machines in the market, our reach is increasing. And we are able to then take a bigger market-share from the market. And with at least 50% Make in India content, I think that becomes the advantage, especially where-is still a very highly government dominated business, we get an advantage as a local manufacturer.
Rashmi
Okay. And this 500 to 600 installation which you did, is it to specific regions or you know, is it distributed pan-India?
Himanshu Baid
So this be pan-India, India
Rashmi
And how many technicians we have specifically as a service,
Himanshu Baid
30 plus or today engineers who are around — who are helping us to manage these machines across the country. And each engineer actually in its full capacity can manage around 20 to 30 million. So we have already put people in strategic locations, which will help us to grow the business in those areas very fast.
Rashmi
Okay. And one last question on the PLI benefits, have we realized anything for the segment?
Himanshu Baid
No.
Rashmi
But are we expecting anything in FY ’26?
Himanshu Baid
Can’t say if we hit some targets, we would, but I’m building the business not on based on PLI, based building the business on merit of the products we manufacture. The PLI are always going to finish the. So FY ’27 PLI is over anyways. Okay, it does. I think the business is built on the merit of product quality, good sort of, I think that is more important to us.
Rashmi
Okay. Okay. Thank you. That’s it from my question is.
Operator
Thank you. The next question is from the line of Ravi — Ravi Kumar Naredi from Naredi Investment Peer Limited.
Ravi Kumar Naredi
You are doing a — hello, hello. Hello. Yes, sir. Yes,, you are doing a very fantastic thing. Sir, our renal contribution is 60%, so it will maintain or may rise more.
Himanshu Baid
So does it grow — renal growth is 60% last year. This next year we are planning because the base has increased now. So we are looking at growing by around INR75 crores over the current base of INR150 crores. So around 50% growth is what we are guiding for renal business. And currently still renal — all renal products are being sourced from outside India. And I think as we get more-and-more market-share and as more-and-more product goes out in the market and people they’ve developed trust on our brand and product, this will help us to grow the market-share considerably. And that’s what we are doing right now.
Ravi Kumar Naredi
Yes, yes, yes. And sir, what is our capex plan for next few years?
Himanshu Baid
And I think next two years, we have called out the capex of around INR500 crores across three new manufacturing facilities we are building right now. And mostly it will help us in expanding the renewal capacity and look at some new opportunities in the CDMO space that we are trying to figure out that this new tariff structure, which is head. So there are some new opportunities opening up. So we are working on those areas also and creating infrastructure for that.
Ravi Kumar Naredi
Okay. And our margin in export are more or domestic Are more.
Himanshu Baid
So margin in were slightly higher than the domestic business.
Ravi Kumar Naredi
Okay. Thank you. Thank you. Thank you, sir.
Operator
Thank you. The next question is from the line of Abhaj from Lehman Ventures. Please go-ahead, sir.
Abhas Dua
Hi, sir, congratulations on the performance. I just want to ask you, given your clear commitment to innovation as evidenced by 334 patents granted globally and R&D expenses has increased this year. So can you share more about new research and development initiatives for product innovations that Medical is focusing on this quarter?
Himanshu Baid
So that’s a great question. And I think for us, it’s very important as an Indian company to focus on new product development and new innovations. So yes, we are hiring 40 more people in the R&D team this year. So from a presence of 60 70 people, we’ll move around 100 plus people this year. We are adding more — and we are going to spend more money on clinical trials, which is part of the R&D cost to help us to establish the efficacy of the products we are manufacturing today. So there is a clear drive that over next two, three years, we will spend more-and-more money on R&D and you will see this expense increasing over next two, three years because as we enter the critical care and cardiology space, our R&D spend will also increase, but will also help us to bring new devices, which will be more — where we will see gross margin improvement in some of the devices we are developing today.
Abhas Dua
Okay, so I just want to have in your take on that the increasing advanced technologies in critical care, oncology and reasons like what are you expecting how they play-out?
Himanshu Baid
So I think today, you know, in any business, you know you have to continuously innovate because otherwise the product life-cycle kind of becomes stragnant. So even in renal, we are bringing some new technologies. We have at least seven or eight products, new products where we are trying to bring in some new ideas and bring some new technology and also improve our existing product lines, adding more SKUs there.
So that’s on the real space. Cardiology, as I told earlier, we are working on the new drug-routing balloons which nobody manufactures in India. Everything what we see in India is imported here in-building the new PDC and some other very specialized guide wires. So that is what we are trying to build now in India and across different technologies. So every area we are creating a specialization of products.
Abhas Dua
And how do you manage the emerging competitors in the medical device market?
Himanshu Baid
See, we have been managing for 28 years. So that’s not new. So currently, we still are the one of the most profitable companies in the sector. We continue to invest in new technology, new manufacturing, strategically launching products which are new-generation devices. So that’s the DNA of the company and I think we continue to work on the same DNA. Nothing is changing.
Abhas Dua
Okay, thank you.
Himanshu Baid
Thank you so much.
Operator
Thank you very much. The next question is from the line of Shah from Systematix. Please go-ahead.
Virti Shah
Hi, sir. So just wanted to know like some insights on our current portfolio coverage in India and specifically what percentage of hospitals can we address through our existing portfolio, like in terms of.
Himanshu Baid
See, today the products we manufacture can cut across into every hospital which is existing in India, almost 20,000 hospitals, which are over 50 bed. So I think we have a very wide basket of products, over 250 products right now across the six verticals we run-in India. And we continue to expand that basket. So over even next three years, we’ll add another 50 more products or 60 more products in this verticals.
So there is a huge basket expansion happening, which ensures that every hospital would be a relevant customer to us. And what is your — which product category you are and your export is driving? So export is basically focused on our vascular access infusion portfolio where we have a global competence. And as time progresses, in next two, three years, we’ll also build exports for our critical care, cardiology and renal business, which we have just started last year in India. Renal is slightly older, but we are still trying to focus more on bridging that import gap in India. But as we have more capacity, surplus capacity will also build as an export business for us. So that’s what we are targeting right now.
Virti Shah
Okay. And last question, what is your current market-share in India for dialyzers and what percentage you think it will grow?
Himanshu Baid
Yeah. So current market-share, I think we estimate is close to around 10% to 12%. And hopefully, as we are calling out already 50% growth this year industry probably is growing around 25%, so we’ll grow double the rate of the industry. So next two, three years, we can expect the market-share to grow to around 15% to 17%.
Virti Shah
Okay. Thank you, sir.
Himanshu Baid
Thank you.
Operator
Thank you. The next question is from the line of Rahul Veshmuk from LKP Securities. Please go-ahead.
Rahul Deshmukh
Opportunity. Sir, sir, I just wanted to understand the contribution is previously used to report the contribution from surgery and and transport.
Himanshu Baid
No, we don’t call-out segments which are very small for the company. And so that’s club under the general category. So we don’t call-out the numbers and now these are some of the numbers of competential I can’t share on the call.
Rahul Deshmukh
Okay. And I just wanted to know whether the — if in which products other margins are better and the product margin expansion for
Himanshu Baid
Rahul, you’re asking a secret recipe for my business. So you are typically asking me a secret recipe or an open forum. So of course, we don’t call-out margin for each product. We don’t give that information, but he has Vascular infusion, which is our core business is where we — because we have a global competence on this business and some of the products, we have good market-share globally. So those are the products who will make more margins.
Rahul Deshmukh
Okay, sir. Thank you. And sir, next question is on. You know that we are looking for the.
Himanshu Baid
Now can you speak more loudly? I can’t hear you very well. So if you can be more closer to the mic, yeah. Rahul, can you be more closer to the mic, please?
Operator
Sir, the line for Mr Rahul has been disconnected. So shall we move to the next question? The next question is from the line of Jasdip from Clockwine. Please go-ahead.
Jasdeep Walia
Hi, sir. Thanks for taking my question. Sir, what percentage of your domestic sales, excluding renal business comes from the government?
Himanshu Baid
So total government revenue is around 10% to 12% as of the around total domestic business.
Jasdeep Walia
Okay. Got it. And how has this number grown over the last couple of years?
Himanshu Baid
It is decreasing. So we are seeing a decrease in terms — again, you know, I think first of all, there’s a bigger big payment issue with the state governments where payments are coming not even in one year from many state governments. And again, quality is not considered as a two-year selection criteria. So that is actually really — for us, it’s better to move more in the value-accretive segment, which is the private segment and then that is where we are gaining more market-share. So I think government is not a focus area for us.
Jasdeep Walia
Got it, sir. Sir, considering that you are a challenger in the renal business and growing really fast, would it be right to assume that the margins in business are poor as of now and as you build scale over the next couple of years, the margins will be
Himanshu Baid
Absolutely correct, absolutely correct. And I think because this is a start and we — as you heard on the call earlier, we are in the middle of the segment getting squeezed. There are big companies, there are smaller Chinese companies which are pushing the market. So we’re in the middle. But I think as the volume expansion happens, we’ll get operational leverage because we are building the team, we have built the infrastructure across the country. So I think once we start leveraging it more, I think we’ll see more margin improvement there. You’re absolutely correct.
Jasdeep Walia
It’s the loss-making business as of now, sir?
Himanshu Baid
It’s not loss-making, operating margin is positive. So I think It’s all about, I think in — I think probably by end of this financial year, we should be able to be making PAT on this business.
Jasdeep Walia
Got it. So how are you — how has your margins in the domestic business moved over the last three years, have they — if you could just talk about the trends in the business last year-on the margin front
Himanshu Baid
Domestic trend would be improving as the revenue — again, see, last year, if you see, we have added 70 new people across two divisions, which were absolutely not — it was just starters. We — there was no real margin coming from those two new businesses. The contribution is very, very less. So — and these are expensive people in cardiology and critical care. So again, you know, the margins would be slightly flatter over last couple of years. But I think as we have guided — again, as you heard on the call, I’ve guided for a growth of 32% 30% to 32% for this year for domestic business growth, I think that would help us to increase our margin substantially in time to come in future.
Jasdeep Walia
Got it, sir. Thank you, sir. That’s all from my side.
Himanshu Baid
Thank you.
Operator
Thank you. The next question is from the line of Harshish Shah from Beef Capital. Please go-ahead.
Harshi Shah
Hi,, congratulations. It’s been a great year. Two questions. First, how do you see the demand in exports, especially Europe coming through during the year and you have MDR certificates for 15 new products. So I think 15% is slightly conservative. And secondly, net working capital days have increased slightly. So just some color on that.
Himanshu Baid
So I think on the export market, the second question to answer for you. The first question, yes, exports in Europe will increase the point here is right now, currently the global situation is very fluid and that’s the reason if you heard me earlier on the call, we have given a conservative guidance. But let’s see what happens in next two, three months and we’ll have more clarity.
But of course, Europe will be a prime market where there were one-third of the revenue still comes from Europe in the company. So I think we are pretty optimistic about the market, but I think few months we’ll have more clarity. So I think we are not in a position to a better number than 15% right now.
Rahul Gautam
Yeah. And just to answer your question on-net working capital, right, I think we have been obviously trying to add market-share in the domestic market to grow faster, right, and extending some credit lines to our distributors to help gain that market-share. Plus we obviously built-out inventory as you know, we’ve lots of raw materials coming from overseas market, right? So I think those are the reasons. But it’s not — it’s not expanded a lot. So we are quite okay. So from an overall net working capital perspective.
Harshi Shah
Okay, thank you, ma’am.
Operator
Thank you. The next question is from the line of Girish Jain from KJMC Financial Services Limited. Please go-ahead.
Himanshu Baid
Hello how are you, sir? Your voice is cracking, sir, your voice is cracking I can’t hear you. Your voice is now. I can’t hear him.
Operator
MR. Girish, if you’re using your headset, please switch to a handset.
Girish Jain
I’m on a handset only.
Himanshu Baid
Now I can hear you.
Operator
Your voice is clear now.
Himanshu Baid
Now clear
Operator
Go-ahead.
Girish Jain
Okay. So congratulations on a good set of numbers and some of the questions have already been covered. I just wanted to get a sense of the capex. We — the company continues to be in a heavy capex cycle mode. And I think you mentioned about in the next couple of years around INR500 crore of more capex is being planned.
Himanshu Baid
Yeah.
Girish Jain
In the earlier calls, you had mentioned there were three new facilities, I think in Haryana, and Rajasthan, one flavor on the schedule of the commercialization of these plants and any new plants identified these identified?
Himanshu Baid
So already these sites were already idified range when we raised the QIP money for expansion. So that these sites were already identified and already construction work has started in on two sites already. Third will be start maybe in few months. So we are waiting for some approvals. So this is part of what we had already announced earlier and will take us around 18 months-to 24 brands to build the plant. So in the previous call, I had mentioned that by end of ’26, you know, calendar year ’26, we will actually be able to commercialize these operations.
Girish Jain
Okay. And the company is sitting on a cash of I think INR1,100 crores, if I understand and obviously, throwing up INR250 crore to INR300 crore cash annually as well. Has — has there been some plan on acquisition which is now going ahead and what is the plan for use of this capital?
Himanshu Baid
So basically, if you see, out of that INR1,000 crores were raised recently through in August, September last year, almost six, seven months ago. And this money is still quite unutilized, almost INR900 crores of this money is still utilized and INR300 crores was the previous cash-in the company, which was built through internal accruals. So we will be using some of the money in capex this year and some money in what we use maybe for general corporate purposes in working capital because we still have very, very low debt from the banks, you know in terms of working capital, company debt-free anyways long-term, there is no debt in the company. So that money will be utilized there. And we are working on certain M&A targets. Hopefully if something works well, then we will be utilizing some of the cash even for M&A operations.
Girish Jain
So on the M&A, have you been able to decide which particular vertical we would be interested in, whether it be critical care or renal?
Himanshu Baid
But as I call-out this is sensitive information. I’m sorry, I can’t answer this question. We will work within you know, what we are — we have a specialty in those areas. So that’s what we will work within the same specialty area. And if we have to some new M&A opportunity, we’ll definitely do a complete DD before getting into a new vertical.
Girish Jain
And last question is on a — we just noticed that the dividend payout ratio has come down from 15% 16% it used to be four, five years back to now, I think around 10%. Is this the company’s plan to preserve cash cost?
Operator
The person you are speaking with has put your call on-hold. Please stay on the line. Just a.
Himanshu Baid
Hello yeah, sorry, I interrupted all.
Girish Jain
No worry. I was mentioning about the dividend payout.
Himanshu Baid
I think I think the Board has taken a view that as we are going for a heavy capex and also there are certain M&A opportunities to conserve cash and of course make prudence in there. But I’ve heard your point and you will convey this to again Board members to be more considered in giving dividends.
Girish Jain
Okay, and thank you and all the best.
Himanshu Baid
Thank you, sir. Thank you very much.
Operator
Thank you. The next question is from the line of Rahul Deshmuk from LKP Securities. Please go-ahead.
Rahul Deshmukh
Hello, sir. Am I audible?
Himanshu Baid
, just loud. Please go-ahead.
Rahul Deshmukh
Yeah, sir. So my second question was on the inorganic expansion that you were all talking. So actually, is there any specific criteria that we have set for the inorganic expansion like in a particular category or any geography we are targeting?
Himanshu Baid
I think Rahul, I just answered the question just before this. And yeah, we will see — we will focus on, see our core competence in consumable space. And I think that’s what we want to do. And if we are moving outside consumers or let’s say in any other space, then definitely we will look at something which is fitting with the current operations of the company. So I can’t call-out specifically what we are going to do or what we are looking at because it has the sensitive information. But as of many finalized, we will give a new explanation to all our stakeholders that why we have done it, what are the synergies and what we see as a long-term objective of doing that M&A.
Rahul Deshmukh
Okay, sir. Thank you, sir.
Himanshu Baid
Thank you so much
Operator
Thank you, ladies and gentlemen. This was the last question for the day. I would now like to hand the conference over to Mr Himanshu for closing comments. Thank you, and over to you, sir.
Himanshu Baid
So thank you very much to all the participants and we were really intriguing questions. And thank you again for your support and opportunity to speak to you through over these calls. We learned a lot with your questions and really helping us to improve our performance and also go deeper — dig deeper in certain questions you have asked, which will help us to Bring better products, serve humanity better. So that’s one of the objectives of the company and look-forward to talk to you soon. And again invite some of you who want to visit our plants. Please come and visit us. You’ll be happy and see how we are innovating, how we are manufacturing products, and these all are world-class at least and which will actually excite you more. Thank you so much.
Rahul Gautam
Thank you.
Operator
Thank you. On behalf of Qualimedicure, that concludes this conference. Thank you for joining us and you may now disconnect your lines