Poly Medicure Ltd:Annual Report 2023-24 Analysis

Poly Medicure Ltd. - Company Overview #

About the Company #

Year of Establishment and Founding History #

Poly Medicure Ltd. (Polymed) was established in 1995.

Headquarters Location and Global Presence #

The company’s headquarters is located in Faridabad, Haryana, India. Polymed has a global presence, exporting its products to various countries worldwide.

Company Vision and Mission #

• Vision: To be a leading global medical device company, committed to innovation, quality, and patient safety.
• Mission: To provide high-quality, innovative medical devices at affordable prices, improving healthcare outcomes and quality of life for patients worldwide.

Key Milestones in their Growth Journey #

• 1995: Establishment of the company.
• 2006: Initial Public Offering (IPO)
• Expansion over the years: Development and expansion of manufacturing facilities to cater to growing demand.
• Geographic Expansion: Increased presence in international markets.
• Product Development: Continuous introduction of new and innovative medical devices.

Stock Exchange Listing Details and Market Capitalization #

• Stock Exchange Listing: Listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
• Market Capitalization: (Dynamic, to be updated with current data).

Recent Financial Performance Highlights #

• (To be updated with current data - include information about revenue, profit, growth rate, and key financial ratios from the latest annual or quarterly reports.)

Management Team and Leadership Structure #

• (To be updated with current data - include names and brief profiles of key management personnel, such as the CEO, CFO, and other key executives. )

Any Notable Awards or Recognitions #

• (To be updated with current data - Include any awards or recognitions received by the company for its performance, innovation, quality, or social responsibility efforts.)

Their Products #

Complete Product Portfolio with Categories #

Polymed offers a wide range of medical devices across various categories:

• Infusion Therapy: IV Cannulas, Infusion Sets, Extension Sets
• Renal Care: Hemodialysis Catheters, Blood Tubing Sets, Fistula Needles
• Blood Management: Blood Bags, Blood Collection Needles
• Respiratory Care: Oxygen Masks, Nebulizer Masks
• Wound Care: Surgical Dressings
• Surgical Products: Suction Catheters, Surgical Blades
• Cardiology: Angiography Catheters, PTCA Balloon Catheters
• Gastroenterology: Nasogastric Tubes, Feeding Tubes

Flagship or Signature Product Lines #

• IV Cannulas: A significant contributor to the company’s revenue.
• Hemodialysis Catheters & Blood Tubing Sets

Key Technological Innovations or Patents #

• (To be updated with current data - Include examples of specific patented technologies or innovative features incorporated into their products)

Manufacturing Facilities and Production Capacity #

Polymed has multiple manufacturing facilities in India. (Specific details about the locations and production capacity of each facility require further research.)

Quality Certifications and Standards #

Polymed adheres to international quality standards:

• ISO 13485
• CE Certification
• GMP Compliance

Any Unique Selling Propositions or Technological Advantages #

• Vertically Integrated Manufacturing: Controls the entire production process from raw materials to finished products.
• Focus on Innovation: Invests in R&D to develop new and improved medical devices.
• Cost-Effective Solutions: Offers high-quality products at competitive prices.

Recent Product Launches or R&D Initiatives #

• (To be updated with current data - Highlight any recent product launches, new product categories entered, or significant R&D investments aimed at developing future products)

Primary Customers #

Target Industries and Sectors #

• Hospitals
• Clinics
• Diagnostic Centers
• Blood Banks

Geographic Markets (Domestic vs. International) #

Polymed caters to both domestic and international markets. A significant portion of their revenue comes from exports to various regions:

• India
• Europe
• Middle East
• Africa
• Asia
• Latin America

Distribution Network and Sales Channels #

• Direct Sales Force
• Distributors
• Authorized Dealers
• Online Channels

Major Competitors #

Direct Competitors in India and Globally #

• Indian Competitors: Hindustan Syringes & Medical Devices Ltd. (HMD), B. Braun Medical India.
• Global Competitors: Becton Dickinson (BD), Medtronic, Baxter International, Cardinal Health

How they differentiate from competitors #

• Cost-Effectiveness: Competitive pricing without compromising quality.
• Comprehensive Product Portfolio: Offers a wide range of medical devices under one roof.
• Focus on Emerging Markets: Strong presence and understanding of the needs of developing countries.

Industry Challenges and Opportunities #

• Challenges: Increasing competition, regulatory hurdles, pricing pressures, dependence on raw material imports.
• Opportunities: Growing demand for medical devices in emerging markets, increasing healthcare expenditure, technological advancements, government initiatives to promote healthcare.

Future Outlook #

Expansion Plans or Growth Strategy #

• Capacity Expansion: Increasing production capacity to meet growing demand.
• Geographic Expansion: Entering new markets and strengthening presence in existing markets.
• Product Diversification: Expanding product portfolio to include new and innovative medical devices.
• Strategic Partnerships: Collaborating with other companies to expand reach and capabilities.

Upcoming Products or Innovations #

• (To be updated with current data - Describe any upcoming products or innovations in the pipeline, based on company announcements or industry analysis.)

Sustainability Initiatives or ESG Commitments #

• (To be updated with current data - Include information about the company’s environmental, social, and governance (ESG) initiatives, such as reducing carbon footprint, promoting ethical practices, or supporting community development.)

Long-Term Vision and Strategic Goals #

• (To be updated with current data - Outline the company’s long-term vision and strategic goals, based on its annual reports, investor presentations, or management commentary.)

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Financial Metrics (Consolidated) #

• Revenue Growth: Total revenue demonstrated consistent growth, increasing from ₹1,15,141.58 lacs in FY2022-23 to ₹1,43,454.44 lacs in FY2023-24, representing a 24.59% increase.
• Profitability: Profit Before Tax (PBT) increased by 45.07%, from ₹23,749.14 lacs in FY2022-23 to ₹34,426.91 lacs in FY2023-24. Profit After Tax (PAT) also rose significantly, from ₹17,928.25 lacs to ₹25,825.97 lacs.
• EBITDA: Increased by 38.26%, from ₹30,349.68 lacs in FY2022-23 to ₹41,949.65 lacs in FY2023-24.
• Earnings Per Share (EPS): Basic EPS increased from ₹18.69 in FY2022-23 to ₹26.92 in FY2023-24. Diluted EPS also showed a similar uptrend.
• Debt to Equity Ratio: It is 0.11:1 in both FY 2023 and FY 2024.
• Net Profit Margin %: This increased from 16.76% in FY2022-23 to 19.26% for FY2023-24.
• RONW %: Increased from 14.51% in 2022-23 to 17.27% in 2023-24.

Business Segment Performance #

• The company primarily operates in a single segment: medical devices. This structure does not permit segment-wise financial performance analysis beyond the total figures provided. Export sales constituted a significant portion of revenue, contributing 69.63% in FY2023-24.

Major Strategic Initiatives and Their Progress #

• Product Portfolio Expansion: The Company is expanding into new therapeutic areas, including cardiology, critical care, and oncology. Investments are being made in product development within these fields.
• Manufacturing Expansion: The Company added two new manufacturing facilities in FY2023-24, bringing the total to twelve. This expansion aims to increase production capacity to address global demand.
• Digital Transformation: The Company will be accelearating the digitilization of its process.
• Strengthening Global Presence: The company enhanced its direct presence in international markets and establish partnerships.

Risk Landscape Changes #

• Global Economic Volatility Risk: The Company acknowledges its dependence on the Indian economy, and global economic uncertainties affect its performance.
• Business and Regulatory Risk: Growing international operations is a part of strategy, subject to foreign market risks.
• Foreign Exchange Risk: The Company highlights exposure to currency fluctuations due to its export orientation, partially mitigated through natural hedging and forward exchange contracts.
• Commodity Price Risk: Fluctuations is raw material cost is highlighted.

ESG Initiatives and Metrics #

• Environmental Stewardship: The Company aims to achieve carbon neutrality, with investments in renewable energy, energy-efficient technologies, and promoting ethical sourcing practices with suppliers. Specific metrics include:
  • Solar Power Generation: 1,392,089 KWH of solar energy was produced.
  • Fuel Saving: Achieved approximately 6.14% savings in HSD consumption, totaling 30 KL, by converting steam boilers with PNG and minimizing HT line faults.
  • Waste Managment, Water Conservation
• Social Stewardship: CSR initiatives include education, gender equality, and healthcare programs, with ₹573.19 lacs spent in FY2023-24, exceeding the required ₹393.25 lacs.
• Governance: The Company maintains a Code of Conduct and complies with Corporate Governance norms as per SEBI and the Companies Act, 2013.

Management Outlook #

• The management highlights opportunities in the Indian medical device sector, projecting an 11-12% CAGR from FY2024 to FY2028. Key growth drivers include rising income levels, healthcare expenditure, and government initiatives like ‘Make in India’ and the National Medical Device Policy 2023.
• The company aknowledges goverment initiatives to reduce the import of medical equipment and to encorage the production of domestic equipment.

Detailed Analysis #

Financial Position Analysis of Poly Medicure Limited #

Balance Sheet Analysis #

3-Year Comparative Analysis of Assets, Liabilities, and Equity (Consolidated) #

(₹ in Lacs)

Significant Changes in Major Line Items (>10% YoY) #

(₹ in Lacs)

• Non-Current Assets: Increased significantly (31.99%) from ₹77,052.15 to ₹101,704.52, driven by increases in Property, Plant and Equipment, Capital work in progress.
• Other Equity: Increased by 19.13% from 119,365.49 to 142,206.77 mainly due to Retained Earning for the year
• Current Liabilities: Increased by 19.75%, driven mainly by increase in borrowing.

Working Capital Trends #

(₹ in Lacs)

• Analysis: Working capital decreased slightly, which warrants a closer examination of the underlying components (inventories, receivables, and payables).

Asset Quality Metrics #

Non-Current Assets Details #

(₹ in Lacs)

• Analysis: No impairment loss was recorded, indicating management’s assessment of assets retaining their value.

Debt Structure and Maturity Profile #

(₹ in Lacs)

• Analysis: There has been a restructure during the year. The amount of Long-term secured borrowing significantly decreased, current secured borrowing has increased. This need further analysis. Maturity Profile of Lease is provided.

Off-Balance Sheet Items #

Contingent Liabilities #

(₹ in Lacs)

Commitments #

(₹ in Lacs)

• Analysis: Significant increase in potential liabilities from show cause notices (custom duty and CGST) and capital commitments. These items need to be carefully monitored.

Operating Performance Analysis of Poly Medicure Limited #

Revenue Breakdown #

Geographical Breakdown (FY2024 vs. FY2023) #

• Domestic: Increased from ₹34,400.52 lacs to ₹40,771.59 lacs.
• Export: Increased from ₹71,746.76 lacs to ₹88,943.06 lacs.
• Sales related to foreign Subsidiaries increased from 4,222.10 lacs to 6486.96 lacs.

Nature of Products Revenue Breakdown #

• Medical Devices Revenue Increased from 110,865.82 lacs in 2023 to 136,569.37 Lacs in 2024.

Cost Structure Analysis #

• Cost of Materials Consumed (Consolidated): Increased by 9.54% from ₹39,484.49 lacs (FY2023) to ₹43,276.80 lacs (FY2024).
• Employee Benefit Expenses (Consolidated): Increased by 21.29% from ₹20,274.58 lacs (FY2023) to ₹24,591.17 lacs (FY2024).
• Research and Development Expenses: Increased by 6.50% from 1,780.25 lacs to 1,896.02 Lacs.
• Other Expenses (Consolidated): Increased by 20.89% from ₹22,342.22 lacs (FY2023) to ₹27,009.52 lacs (FY2024). Key drivers include increases in job work charges and power and fuel.

Margin Analysis (Consolidated) #

• EBITDA Margin: Increased from 27.21% (FY2023) to 30.49% (FY2024).
• Net Profit Margin: Increased from 16.76% (Standalone, FY2023) to 19.26% (Standalone, FY2024); increased from 16.60% (Consolidated FY2023) to 18.60%(Consolidated FY2024).

EPS Analysis (Consolidated) #

• Basic EPS: Increased from ₹18.67 (FY2023) to ₹26.92 (FY2024).
• Diluted EPS: Increased from ₹18.67 (FY2023) to ₹26.90 (FY2024).

Cash Management: Poly Medicure Limited Financial Analysis #

Cash Flow and Liquidity Analysis #

Operating, Investing, and Financing Cash Flow Components (Consolidated) #

• Operating Cash Flow (OCF): Increased to ₹26,608.22 lakhs in FY 2023-24 from ₹19,105.20 lakhs in FY 2022-23, driven by higher profit before tax and efficient working capital.
• Investing Cash Flow (ICF): Net cash used for investing activities was ₹(24,093.80) lakhs in FY 2023-24 compared to ₹(17,924.16) lakhs in FY 2022-23, with significant purchases of fixed assets.
• Financing Cash Flow (FCF): Net cash used in financing activities amounted to ₹(2,015.35) lakhs in FY 2023-24, compared to ₹(1,250.53) lakhs in FY 2022-23, reflecting changes with proceeds from or repayments of borrowings, dividend paid, and interest.

Working Capital Management Efficiency #

• The document implies that Poly Medicure actively manages its working capital and has increased its operating cash flow.
• Inventory increased from ₹20,865.48 lakhs to ₹22,103.04 lakhs.
• Trade receivables have increased from ₹23,543.20 to ₹26,993.88, while Trade payables has increased from 7,808.83 lacs to 8,898.37, implying actions to manage working capital and credit terms.

Capex Analysis #

• Significant investment in property, plant, and equipment, with net additions of ₹29,128.94 lacs, and additions to intangible assets and assets under development.

Dividend Trends #

• A final dividend of ₹3.00 per share was proposed for FY 2023-24, which is similar to the declared per share for FY 22-23.
• Total dividend payout for the previous year (FY 2022-23) was ₹2,878.33 lakhs.

Debt Service Coverage #

• Debt Service Coverage Ratio (DSCR) increased from 9.42 in FY 2022-23 to 14.70 in FY 2023-24. The increase in debt service ratio denotes a reduction in current period principal repayments and an increase in profit after tax.

Liquidity Position #

• The report indicates that the company’s working capital is sufficient to meet current requirements.
• The cash and cash equivalents increased from ₹706.24 lakhs in FY 2022-23 to ₹1,205.31 lakhs in FY 2023-24.
• The company also reports access to undrawn credit facilities.

Financial Analysis of Poly Medicure Limited #

Profitability Ratios (3-Year Trends - Consolidated) #

• ROE: 2023-24: 17.57%. 2022-23: 15.49%. 2021-22: Data Not Available. Trend: Increasing.
• ROA: 2023-24: 15.09%. 2022-23: 12.13%. 2021-22: Data Not Available. Trend: Increasing.
• Net Profit Margin: 2023-24: 18.77%. 2022-23: 16.08%. 2021-22: Data Not Available. Trend: Steady Increase.
• EBITDA Margin: 2023-24: 30.49%. 2022-23: 27.21%. 2021-22: Data Not Available. Trend: Significant Improvement.
• ROIC: 2023-24: 19.93%. 2022-23: 15.48%.

Liquidity Metrics (Consolidated) #

• Current Ratio: 2023-24: 2.42. 2022-23: 2.81. Trend: Decreased.
• Quick Ratio: Cannot be calculated directly due to missing inventory data. Significant quick assets indicated by high current ratio.
• Cash Ratio: 2023-24: 0.41. 2022-23: 0.57.

Efficiency Ratios (Consolidated) #

• Asset Turnover: Cannot be precisely calculated without total assets for each year. Likely improved due to revenue increase exceeding asset growth.
• Inventory Turnover: 2023-24: Approximately 6.42. 2022-23: 5.53. Trend: Minor Change.
• Receivables Turnover: 2023-24: 5.25. 2022-23: 5.18. Trend: Relatively Stable.

Leverage Metrics (Consolidated) #

• Debt/Equity Ratio: 2023-24: 0.11:1. 2022-23: 0.11:1. Trend: Stable and Low.
• Interest Coverage Ratio: 2023-24: 30.96. 2022-23: 26.88. Trend: Increased.

Working Capital Ratios #

• Working Capital: 2023-24: 49,038.52. 2022-23: 51,338.51.
• Working Capital Turnover Ratio: 2023-24: 2.75. 2022-23: 2.09
• Days of Inventory Outstanding: 2023-24: 60.28. 2022-23: 69.63

Industry Comparison #

Direct comparison impossible without specific industry data. Meaningful analysis requires comparison to similar medical device manufacturers in India and globally. High profitability and low leverage are generally positive but require comparative analysis.

Poly Medicure Limited: Business Segment Analysis #

Revenue and Profitability Metrics with Growth Rates #

• Consolidated Total Income: Increased by 24.59% from ₹1,15,141.58 lacs in FY2022-23 to ₹1,43,454.44 lacs in FY2023-24.
• Consolidated Revenue from Operations: Grew by 23.36%, from ₹1,11,523.04 lacs in FY2022-23 to ₹1,37,579.63 lacs in FY2023-24.
• Consolidated EBITDA: Increased by 38.26% from ₹30,349.68 lacs in FY2022-23 to ₹41,949.65 lacs in FY2023-24.
• Consolidated Profit Before Tax (PBT): Rose by 45.07%, from ₹23,556.47 lacs in FY2022-23 to ₹34,174.23 lacs in FY2023-24.
• Consolidated Net Sales: Increased by 23.36% from the previous year net sales.
• Consolidated Profit Before Tax: Marked a 44.95% increase.

Market Share and Competitive Position #

• Poly Medicure is among the top five companies in the Indian medical devices industry in terms of operating income.
• The company ranks fifth in terms of profit after tax (PAT) in Fiscal 2023.

Key Products/Services Performance #

• Key product verticals include infusion therapy, oncology, anesthesia and respiratory care, urology, gastroenterology, vascular access, surgery and wound drainage, dialysis, and renal care.
• Strong sales growth was observed in medical devices such as intravenous cannulas, prefilled syringes, and blood bags.
• The Company is focused on Cardiology and critical care segment and has launched more than 10 products under this category.

Geographic Distribution and Market Penetration #

• Domestic Sales: Increased significantly, contributing to overall revenue growth.
• Export Sales: Represented 69.63% of revenue from operations in Fiscal 2024 and 72.14% in the three months ended June 30, 2024. The products were supplied to Europe, Africa, the Americas, Australia, and Asia.
• Distribution Network: As of June 30, 2024, the company had a pan-India presence with 506 distributors and an international network of 260 distributors.
• Key Market: Asia Pacific region is expected to be a key market in the future.

Operational Efficiency Metrics #

• The company focuses on automation and technology implementation in its manufacturing processes, utilizing robotics and advanced systems.
• Quality control procedures are implemented for both raw materials and finished goods.

Growth Initiatives and Challenges #

• Growth Initiatives:
  • Expansion of product portfolio into cardiology, critical care, and oncology.
  • Opening of new manufacturing plants, totaling twelve facilities, to increase production capacity.
  • Accelerated digitization of processes and communication channels.
  • Strengthening global presence by establishing direct presence and strategic partnerships in international markets.
• Challenges:
  • Global economic volatility and its impact on the Indian economy.
  • Market, business, and financial risks associated with international operations.
  • Foreign currency exchange rate fluctuations.
  • Competition from other medical device manufacturers, including larger companies with greater financial resources.
• R&D Focus: to develop more effective and user friendly products, improving existing processes and production cost efficiency.

Risk Assessment #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Diversified product portfolio (over 123 categories with 6,745 SKUs). Investment in R&D (325 patents granted, 44 filed). Geographic diversification (operations in India, China, Egypt, and Italy).
• Control Effectiveness: Partially Effective
• Potential Financial Impact: High
• Year-over-year Changes in Risk Profile: Increasing due to new geographic markets and manufacturing facilities.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Vertically integrated manufacturing capabilities. Quality certifications (ISO 9001:2015, EN ISO 13485:2016, EC Certification). Automation and use of robotics in manufacturing.
• Control Effectiveness: Effective
• Potential Financial Impact: Medium
• Year-over-year Change in Risk Profile: Mainly stable due to vertical integration and certifications.

Financial Risks #

• Severity: Medium
• Likelihood: High
• Trend: Increasing
• Mitigation Strategies: The Company’s total owned funds of ₹ 1,45,824.83 lacs with ₹ 15,843.36 Lacs as net debts is considered adequate by the management. Foreign Exchange Risk Management Policy and Commodity Risk Management Policy. Natural hedging through import/export activities. Forward exchange contracts.
• Control Effectiveness: Partially Effective
• Potential Financial Impact: Large swings remain possible.
• Year-over-Year Changes in Risk Profile:
  • Foreign Exchange Risk: Increase.
  • Commodity Price Risk: Remains high, depends on global crude oil prices.
  • Interest Rate Risk: Remains medium, mainly influenced by global economic conditions.
  • Credit Risk: Remains medium.

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Compliance with GMP. Routine internal and external quality audits.
• Control Effectiveness: Effective
• Potential Financial Impact: Medium
• Year-over-year Change: Risk profile increased due to new regulatory frameworks and stricter requirements.

Emerging Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: The company is investing in digital transformation processes to streamline operations.
• Control Effectiveness: Unknown.
• Potential Financial Impact: High.
• Year-over-year Changes in Risk Profile: Increasing with time.

Strategic Analysis of Poly Medicure Limited #

Long-Term Strategic Goals and Progress #

• Focused on expanding product portfolio into critical therapeutic areas (cardiology, critical care, oncology).
• Expanding manufacturing capacity with twelve facilities.
• Accelerating digitization of processes and communication channels.
• Achieved significant sales growth (23.36% increase in consolidated net sales year-over-year).
• Establishing direct presence in global markets.

Competitive Advantages and Market Positioning #

• Positioned as a comprehensive solution provider with a wide range of medical devices and integrated solutions.
• Strong position in the Indian medical devices market (top five in terms of operating income).
• Extensive sales and distribution network (domestic and international).
• Established strong manufacturing capabilities.

Innovation Initiatives and R&D Effectiveness #

• Maintains a dedicated R&D center (approved by the DSIR).
• Strong focus on developing new products and improving existing processes.
• Continuous R&D in safety for medical devices.
• R&D expenses increased by 6.5%.
• Possesses a substantial number of granted patents (325) and pending applications (44).
• Launched more than 10 new products in the last year.

Management’s Track Record in Execution #

• Successfully delivered substantial revenue growth and improved EBITDA margins.
• Continuous growth, indicating expansion and successful execution.
• Allocates required funds to CSR activities.

Capital Allocation Strategy #

• Reinvesting in the business through manufacturing facility expansion, capacity expansion, and R&D.
• Consistent dividend payout to shareholders ( ’ 3 per share for FY 2023-24 proposed).

Organizational Changes and Their Impact #

• Redefined brand identity, including a new logo.
• Change in director designation.
• Change in Statutory Auditor.

Environmental Metrics and Targets #

• Committed to achieving carbon neutrality, supported by investments in renewable energy, energy-efficient technologies, and carbon offsetting initiatives.
• Energy-saving measures: LED lighting, QR code systems, paperless processes, and solar power generation (1,392,089 KWH produced).
• Water conservation: Rainwater harvesting and sewage treatment plants for water recycling.
• Working with global suppliers to promote ethical sourcing and reduce environmental impacts.
• ERP Implementation (SAP): Reduction of about 45 tCO2e.
• Fuel saving approx. 6.14% HSD Saving- 30 KL by converting steam boilers with PNG & minimize HT Line faults.

Social Responsibility Programs #

• ₹393.25 lakhs allocated to CSR programs focused on education and gender equality.
• ₹573.19 lacs spent on activities specified in Schedule VII of the Companies Act, 2013. Excess spent of ₹ 180.66 lacs is to be carried forwad for 2024-25.
• CSR projects include providing food, promoting healthcare and education, and supporting welfare for disabled persons.
• No complaints were received by the Committee for Redressal for sexual harrasment.

Governance Structure and Effectiveness #

• Board of Directors: Twelve members, optimum combination of Executive, Non-Executive, and Independent Directors.
• Seven out of twelve directors are Independent.
• Board committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee, Risk Management Committee, and Corporate Social Responsibility Committee.
• Regular board and committee meetings as required.
• Compliance with Secretarial Standards (SS-1 and SS-2).
• Annual performance evaluation of the Board, Directors, and Committees.

Regulatory Compliance and Future Preparations #

• Compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013.
• Subject to medical device regulations in India and internationally.
• Maintained proper records as prescribed under Section 88 of the Companies Act, 2013.
• Policies formulated: “Policy on Whistle Blower and Vigil Mechanism”, Related Party Transactions Policy, and a policy on Prevention of Sexual Harassment (POSH Policy).
• The Company has used the accounting software which has the feature of recording audit trail.

Future Projections and Guidance #

Management Guidance and Assumptions #

• Focus is on strengthening offerings in existing categories and venturing into cardiology, critical care, and oncology.
• Anticipates continued growth, supported by government initiatives promoting domestic manufacturing and reducing import dependence.
• Dividend payout policy is linked to long-term growth objectives, with internal cash accruals being a key consideration.
• Assumes that digital tools will be adopted and this will improve interaction with customers.
• Assumes benefit from established and developing legal and regulatory requirements.

Market Growth Forecasts #

• The global medical device industry is projected to reach $725-775 billion by 2028, with a CAGR of 5.5-7.5%.
• The Indian medical devices sector is estimated at ₹900-915 billion in fiscal 2024 and is expected to grow at 11-12% CAGR between fiscal 2024 and 2028, outpacing global industry growth.
• The Asia Pacific region is expected to be a fast growing segment growing at 10-15% CAGR.

Planned Strategic Initiatives #

• Significant expansion of the product portfolio, particularly in cardiology, critical care, and oncology.
• Accelerated digitization of processes and communication channels, including workflows and supply chain management.
• Strengthening of global presence through direct presence and strategic partnerships in key regions.
• Opening of new manufacturing plants, increasing the total to twelve, to support growth and meet increasing global demand.
• The company recognizes the promotion of “Innovate in India” to become the desirable destination for R&D.

Capital Expenditure Plans #

• Establishment of three new manufacturing facilities in Rajasthan, Haryana, and Uttarakhand over Fiscal 2025 to 2027.

Efficiency Improvement Targets #

• Implementation of advanced digital tools to streamline workflows and optimize supply chain management.
• Use of robotics and automation in manufacturing processes to improve accuracy and limit scrap generation.
• Enhancing operational efficiency and profitability, as demonstrated by the increase in EBITDA.
• Process improvements and production cost efficiency are key areas for R&D.

Potential Challenges and Opportunities #

• Challenges:
  • Exposure to global economic volatility and its impact on the Indian economy.
  • Risks and uncertainties in international operations, including geopolitical instability, foreign currency exchange fluctuations, and local regulations.
  • Potential losses due to foreign currency fluctuations, especially since prices may only be revised periodically.
  • Dependence on the health of the overall Indian economy.
  • Competition from domestic and multinational players
• Opportunities:
  • The supportive role of the Government of India in fostering the medical devices sector’s development, reducing import dependence, and promoting domestic manufacturing.
  • Expansion into critical therapeutic areas (cardiology, critical care, oncology) to address unmet medical needs.
  • Growing demand for medical devices and healthcare services, driven by factors like rising income, increased healthcare spending, and aging populations.
  • Potential for import substitution and growth as an emerging manufacturing hub for medical devices.
  • Opportunity to become a desirable destination for R&D.

Scenario Analysis and Sensitivity #

• Sensitivity to Interest Rate Fluctuations: A 50 basis point increase in interest rates would negatively impact profit before tax by ₹80.29 lacs, while a 50 basis point decrease would positively impact it by the same amount (based on consolidated figures).
• Sensitivity to Foreign Currency Fluctuations: The Group has significant import & export transactions with a net foreign currency exposure disclosed. The company is vulnerable.
• Sensitivity to Raw Material Price Fluctuations: The prices of raw materials are mainly dependent on the price of crude oil. A large portion of the raw material is imported, which exposes the company to foreign exchange risk.
• Sensitivity to Key Assumptions: The value in use calculation as a result of assessing the recoverable amount of the CGu is based on key assumptions which include operating margins, growth rates and discount rates.