Poly Medicure Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS

Global Medtech Industry: A Market Poised for Transformational Growth

The medical device industry stands at a defining inflection point transitioning from incremental expansion to a phase of accelerated, technology-driven transformation. Across the globe, MedTech is increasingly recognised not merely as a support function to healthcare delivery, but as a central pillar of it, enabling better diagnostics, more precise interventions, and improved patient outcomes. Supported by sustained demographic tailwinds, rising per-capita healthcare expenditure, and a rapid convergence of digital technologies with clinical practice, the global market for medical devices is entering a decade of robust growth.

The global MedTech market, estimated at approximately USD 594 billion in 2022, is expected to reach approximately USD 758 billion by 2027, reflecting a compound annual growth rate of approximately 5%. Looking ahead, sustained demand across emerging and developed economies alike is expected to continue driving this expansion. Advanced economies continue to lead in absolute market size - the United States remains the largest exporter of medical devices at approximately USD 75 billion, followed by China at USD 48 billion. India, with exports of USD 4 billion, represents less than 1% of global MedTech exports today, a gap that also underscores the enormous headroom for growth

Key Global Drivers Reshaping the MedTech Landscape

1. Ageing Populations and Rising Chronic Disease Burden

Global demographics are undergoing an unprecedented shift. The proportion of the population aged 60 and above is expanding faster than any prior generation, driving sustained demand for orthopaedic implants, cardiac devices, monitoring systems, and oncology-related diagnostics. Simultaneously, the global burden of non-communicable diseases - diabetes, cardiovascular conditions, cancer, and respiratory illnesses is creating a structural and growing demand for precision diagnostics, minimally invasive devices, and long-term patient management solutions. With over 830 million diabetics1 globally and 20.6 million new cancer2 cases per year, the demand profile for medical technology is structurally favourable.

2. Digital Integration and Artificial Intelligence

The convergence of software, artificial intelligence, and hardware is giving rise to an entirely new generation of medical devices often referred to as Software as a Medical Device (SaMD). From Al-enabled diagnostic imaging and predictive patient monitoring platforms to remote patient management systems and smart drug delivery, digital integration is fundamentally expanding the value proposition of MedTech. MedTech companies that integrate Al and connected capabilities are increasingly differentiated in procurement decisions by hospitals and health systems globally.

3. Global Supply Chain Rebalancing

The post-pandemic era has accelerated a fundamental reconfiguration of global supply chains. Geopolitical tensions particularly between the US and China alongside rising logistics costs and concentration risks, are compelling multinational MedTech companies to diversify their manufacturing bases. India, with its significant cost advantage (labour costs 60-80% below the US and 40-50% below China), improving regulatory infrastructure, and 100% automatic FDI route, is increasingly emerging as a preferred alternative manufacturing destination.

4. Preventive Healthcare and Rising Health Consciousness

Since the COVID-19 pandemic, there has been a marked and lasting shift towards preventive health management. The proliferation of wearables, point-of-care diagnostics, home-based testing kits, and remote monitoring platforms is reshaping how individuals engage with their health. This transition is creating significant new demand for consumer-oriented medical devices and diagnostics segments in which Indian manufacturers are increasingly competitive.

Indian Medtech: From Sunrise Industry to Inflection Point

Indias MedTech market has reached a pivotal moment. Domestic manufacturing has more than doubled its share of total consumption from approximately 20% in 2022 to approximately 45% in 2025 - driven by coordinated policy action, a surge in capital flows, and the emergence of Indian champions in globally competitive segments.

The Indian medical device market, valued at approximately USD 16 billion in FY2025, is one of the fastest growing in the world, expanding at a CAGR of approximately 13% in recent years. However, what is more significant than the absolute size is the structural shift underway, Indian manufacturers are steadily displacing imports across segments and beginning to emerge as credible global exporters.

Rising Domestic Manufacturing Share: Category-Wise Progress

The import substitution story in Indias MedTech sector is particularly evident when viewed at the category level. Across virtually every major segment, the domestic share of total consumption has increased meaningfully between 2022 and 2025, reflecting the combined impact of PLI-linked investments, improved manufacturing capabilities, deeper R&D capabilities and regulatory changes favouring Indian producers.

For Poly Medicure, which operates predominantly in the consumables segment- IV catheters, infusion sets, dialysis products, and related disposables, this structural shift is directly relevant. The Companys product portfolio sits squarely within the seize now1 and scale next opportunity, where import substitution potential is high and Indian manufacturers with global quality credentials are best placed to capture growing domestic and export demand.

The Three Pillars of Indias MedTech Opportunity

An estimated USD 80+ billion opportunity has been identified for Indias MedTech sector by FY2035, anchored around three key growth pillars:

Indias Export Opportunity: Building a Global Medtech Brand

Indias MedTech exports grew from USD 3.4 billion in FY2023 to USD 4.0 billion in FY2025, a compound growth of approximately 9%. While this trajectory is encouraging, it must be viewed in the context of the enormous headroom that remains: India accounts for less than 5% of imports in every major global region, and less than 1% of the total global MedTech export market. This gap represents the opportunity.

For Poly Medicure, already exports to over 125 countries, this export expansion phase aligns directly with the Companys global strategy. The Companys investments in manufacturing quality, international certifications, and product development position it to capture a disproportionate share of this export growth opportunity.

Consumables currently constitute the dominant category in Indias export mix at approximately 45% of total exports, reflecting the established global credibility of Indian manufacturers in this segment. Devices (implants and speciality) are the fastest growing export category at a CAGR of approximately 19%, while IVD and equipment segments are growing at approximately 7% and 4% respectively. Indias export-1 P led manufacturing revenues are projected to grow from USD 4 billion today to USD 16-18 billion by FY2035, implying a CAGR of 15-15%.

I Indias Medtech sector is poised for sustained growth, driven by

strong demand fundamentals, progressive policies and accelerating *; investments.

1. Structural Demand Tailwinds

Disease Burden

Rising prevalence of chronic and lifestyle diseases is driving long term demand for medical technologies

10+ Cr diabetics, 15 lakh cancer cases per year

Rising Insurance Penetration

Increasing health insurance coverage is improving affordability and access to quality medical care 43+ Cr PM-JAY cards issued, 36,000 hospitals covered of which 40-45% are private

Infrastructure Build

Formalisation of healthcare access is expanding the addressable market for quality medical consumables and devices significantly

764,000 Cr+ outlay to strengthen hospital capacity

2. Regulatory and Policy Tailwinds

Production Linked Incentive (PLI) Scheme for Medical Devices 73,420 Cr PLI for Medical Devices:

Boosts domestic manufacturing, enhances scale and global competitiveness National Medical Device Policy 2023

Provides a clear roadmap for growth with a focus on innovation, quality and ease of doing business

PRIP Scheme (75,000 crore initiative) and R&D Incentives

Encourages innovation and indigenization through financial support for research and product development

MedTech Parle and Ecosystem Infrastructure: AMTZ, Indias first MedTech park; four other parks approved

World-class infrastructure and plug-and-play facilities enabling clusters of/innovation and manufacturing

MedTech Mitra

Digital initiatives that streamline approvals, provide market intelligence and support industry growth

3. Capital Flows and Investment Momentum j

Strong investor interest, rising PE/VC investments and strategic) global partnerships are fueling capacity expansion, innovation s

and value creation across the Medtech value chain

~72,000 Cr invested across 7 PE deals ~ Rs.8,660 Cr invested across 90+ VC deals

~ Rs.280 Cr of corporate and individual capital infused across 135+ deals in 2025

1. Structural Demand Tailwinds

Healthcare Infrastructure Expansion

The Government of India has committed over Rs.64,000 crore to strengthen hospital capacity under various national health programmes. With over 43 crore PM-JAY cards issued covering 36,000 hospitals - 40-45% of which are private, the formalisation of healthcare access is expanding the addressable market for quality medical consumables and devices significantly.

Disease Burden

Indias disease burden creates a structural and enduring demand base. The country has over 10 crore diabetics, approximately 15 lakh new cancer cases per year, and a rapidly expanding population requiring cardiovascular and renal care. These conditions are high-device and high-consumable-intensity, directly supporting demand for Poly Medicures core product categories.

Rising Insurance Penetration

The expansion of health insurance coverage both through government and private schemes is gradually reducing the out-of-pocket cost constraint that historically limited hospital utilisation and device uptake. As more patients access formal healthcare, consumption of medical consumables per capita is rising.

Medical Tourism

India has become a preferred destination for medical procedures for patients from the Middle East, Africa, and increasingly Europe. This demand for high-quality, internationally benchmarked clinical outcomes is pulling through demand for premium medical consumables and devices at Indias top hospitals.

2. Regulatory and Policy Tailwinds

Perhaps the most significant development for Indias MedTech industry in recent years has been the sustained and increasingly coherent policy support from the Government of India. The regulatory and policy ecosystem has evolved markedly, creating a compelling environment for domestic manufacturers.

Production Linked Incentive (PLI) Scheme for Medical Devices

The Rs.3,420 crore PLI scheme for medical devices has already commissioned 24 projects across 57 product categories. The scheme provides a 5% financial incentive on incremental sales, incentivising both domestic and multinational companies to invest in Indian manufacturing. This has catalysed a wave of capital investment in the sector and has materially improved the competitive cost structure of Indian manufacturers relative to imports.

National Medical Device Policy 2023

Approved in April 2023, the National Medical Device Policy represents the most comprehensive articulation of Indias ambitions in the MedTech space. The policy targets India achieving a 10-12% share of the global MedTech market over the next 25 years. Its six pillars streamlining the regulatory framework, enabling indigenous manufacturing, facilitating R&D and innovation, creating awareness and brand positioning, developing a skilled workforce, and attracting investment align directly with the strategic priorities of leading Indian MedTech companies including Poly Medicure.

PRIP Scheme and R&D Incentives

The Promotion of Research and Innovation in Pharma MedTech Sector (PRIP) scheme, with a financial outlay of Rs.5,000 crore (with Rs.4,250 crore dedicated to R&D), is accelerating innovation in the sector. Complementing this, the governments Research, Development and Innovation (RDI) fund of Rs.1 lakh crore with MedTech as a focus area is channelling public capital into strengthening Indias technology capabilities. Additionally, the Rs.750 crore ANRF fund, co-funded by the Gates Foundation, is supporting applied research at the intersection of product development and clinical need.

MedTech Parks and Ecosystem Infrastructure

Four medical device parks are currently underway, with the Andhra Pradesh MedTech Zone (AMTZ) - Indias first and most mature MedTech cluster serving as a model. In just seven years, AMTZ has evolved into the worlds largest integrated medical device manufacturing ecosystem, housing 183 firms with leadership in areas including radiology equipment and regenerative medicine. The shared infrastructure model of these parks centralising testing, validation, sterilisation, and certification facilities is materially reducing the cost of quality compliance for manufacturers.

MedTech Mitra

In March 2026, AMTZ launched Indias first dedicated MedTech investment fund MedArtha marking a significant milestone in the maturation of the Indian MedTech capital ecosystem.

3. Capital Flows and Investment Momentum

A significant acceleration in capital deployment into Indias MedTech sector is further testament to the sectors growing attractiveness. In 2025 alone, approximately Rs.2,000 crore was invested across seven private equity deals, Rs.8,660 crore across over 90 venture capital transactions, and Rs.280 crore of corporate and individual capital across 135+ deals. PE/VC investment in Indian MedTech has scaled over 6x from approximately USD 180 million in 2019 to approximately USD 1.25 billion in 2025. This capital is funding capacity expansion, technology development, and global market access for Indian companies.

Industry Challenges: Barriers That Must be Navigated

While the overall trajectory for Indias MedTech sector is markedly positive, the industry continues to contend with structural challenges that temper the pace of growth. An objective assessment of these barriers is essential for understanding the operating environment and the strategic imperatives for Indian manufacturers.

Inverted GST Duty Structure

Higher GST on inputs and job work than on finished medical devices leads to blocked input tax credit, increases working capital requirements and impacts the competitiveness of domestic manufacturers.

Chinese Dumping

Low-priced medical devices often entering international markets at prices below fair market value creates an uneven competitive landscape, undermines domestic manufacturing, discourages innovation, and increases dependence on a single source for critical healthcare products. Addressing this issue through balanced trade policies is essential to building resilient and sustainable global healthcare supply chains.

Geopolitical Uncertainty

Global trade disruptions, supply chain realignments, tariff changes and geopolitical tensions continue to create volatility in sourcing, exports and investment decisions, necessitating resilient and diversified supply chains.

Import Dependence in High-Value Components

Despite significant progress in import substitution at the finished goods level, Indias MedTech sector remains heavily dependent on imports for critical components and raw materials including flat-panel detectors, sensors, precision motors, medical-grade plastics, and speciality reagents. This dependence limits the extent of domestic value addition and introduces cost and supply chain vulnerability. An inverted duty structure on several of these inputs where the duty on raw materials exceeds that on finished products further erodes the economics of domestic manufacturing in certain categories.

Regulatory Complexity and Approval Timelines

Multiple No-Objection Certificate (NOC) requirements, sequential rather than parallel approval processes, classification ambiguity, and limited alignment with international regulatory frameworks (EU MDR, US FDA) continue to extend product development and market access timelines. The absence of a dedicated fast-track approval pathway for breakthrough or indigenously developed devices remains a constraint on innovation velocity.

Limited Innovation and R&D Investment

Indian MedTech firms currently invest 2-4% of revenues in R&D, compared to 10-15% in the US and 15-20% in China. India holds approximately 3% of global MedTech patents, of which less than 10% are filed by Indian entities with the remainder filed by foreign companies seeking protection in the Indian market. This innovation gap, while beginning to narrow, continues to constrain Indias transition from manufacturing-led to IP-led growth.

Talent and Skilling Gaps

A shortage of specialised talent in advanced imaging, diagnostics, and device design engineering continues to constrain R&D capability development. Academic curricula have historically been oriented towards testing and validation rather than end-to-end product development. Building a deep bench of MedTech talent is a medium-term imperative for the sector.

Market Access and Procurement Barriers

Public procurement processes have been slow to incorporate domestic preference mandates at the component value addition level. Technical specifications in tenders have often been written around incumbent products, creating barriers for new Indian entrants. Clinician familiarity with established global brands continues to influence procurement decisions in the private sector, even where Indian alternatives offer comparable quality at lower cost.

Indian MedTech sector has immense potential to accelerate investment in cutting-edge innovation

Green Shoots: Indias Innovation Story is Emerging

The narrative around Indian MedTech is no longer solely about low-cost manufacturing. Pioneering Indian firms are now developing globally competitive, proprietary innovations — from helium-free MRI machines and soft-tissue surgical robots to indigenous cardiac stents and Ai-enabled diagnostic platforms

A landmark validation of Indias innovation potential has come with several transformative product launches by Indian companies in high import-dependent categories. Voxelgrids has developed Indias first helium-free MRI machine and SS Innovations has launched a soft-tissue surgical robot that is being deployed in India and internationally. These are no longer aspirational milestones; they are commercial realities that demonstrate Indias capacity for cutting-edge MedTech innovation.

The green shoots of innovation are further supported by a convergence of enabling conditions: Rs.750 crore in ANRF funding, the Rs.5,000 crore PRIP scheme, over 150 MedTech startups incubated across leading accelerators with approximately 17% expected to reach commercialisation, and PE/VC investment that has scaled more than 6x since 2019. It is also projected that scaling MNC-led innovation from India alone could create over 500,000 new skilled jobs by 2030.

Poly Medicure is well positioned to participate in and benefit from this innovation wave. The Companys investments in product development, clinical validation, and regulatory certifications including US FDA and EU MDR place it among the small cohort of Indian MedTech manufacturers with genuine global credentials.

Company Overview

Proven yesterday

• Scaling today

• Defining tomorrow - a three-decade compounding story in medical devices.

Polymed began with a single consumable, the intravenous cannula, and built it patiently into Indias largest listed medical-devices company.

Over three decades the Company has grown from that one product line into a platform of 225+ products across 13 clinical specialities covering infusion therapy, renal care, critical care, surgery and wound drainage. The aquisitions completed in Fiscal 2026 added interventional cardiology and orthopaedics to that list.

Guided by its founding motto, "We care as we cure," Polymed today manufactures over 1.9 billion devices a year across 15 manufacturing plants in five countries, employs 3,400+ people, sells in more than 125 countries and holds over 390 patents. It has been the largest exporter of consumable medical devices from India for eleven years, is amongst the largest IV cannula manufacturers in the world, and was the first Indian company to indigenously manufacture dialyzers - a franchise of quiet firsts, built to endure.

The journey so far falls into three chapters, two of them behind us and the third now beginning POLYMED 1.0 - Foundation (FY1996-FY2020). In 1996 the company launched an IPO of INR 54 million (total issue size) and then did not return to the market for close to twenty-five years. Everything that followed - capacity, R&D, the first overseas plant and clear global leadership in infusion therapy - was funded almost entirely from internal accruals, compounding the business to roughly ~f700 crore of revenue on a debt-light, cash-generative core. It was a bootstrapped build, and it instilled a culture of capital discipline that still defines POLYMED today.

POLYMED 2.0-Inflection (FY2020-FY2026). With the foundation in place, the Company brought in institutional capital to move faster, raising Rs.400 crore in 2021 and f1,000 crore in 2024 through two qualified placements. That capital funded a multifold expansion in capacity and the incubation of higher-value verticals such as cardiology, critical care and orthopaedics. Revenue roughly tripled to around f1,875 crore as POLYMED began, deliberately, to move up the technology curve. The revenue increase over this period was driven predominantly by organic growth across the core infusion-therapy, renal-care and critical-care franchises. This organic build was complemented by targeted acquisitions that gave the Company access to new technologies and higher-value platforms: the PendraCare Group in the Netherlands, adding interventional cardiology catheters, and the Citieffe Group in Italy, bringing orthopaedic trauma and fixation systems. It also completed a small bolt-on acquisition in Brazil to establish a direct presence and local market access in Latin America.

POLYMED 3.0-Ascent (FY2027 onwards). The next chapter is about converting that investment into compounding growth: integrating the newly acquired cardiology and orthopaedics platforms, scaling renal and critical care, leveraging technology to build high-complexity verticals globally, and deepening direct access to customers in the worlds most demanding markets. The thread running through all three chapters is the same, namely disciplined use of capital, patience, and a preference for building only where the Company can build well.

Levers of Growth

Six engines drive the Companys growth. They reinforce one another, and together they turn scale, technology and discipline into value that compounds over time.

Large and Fast-Growing Addressable Market	POLYMED addresses a US$680 billion global medical device market that is growing at around 5% a year. Asia-Pacific is expanding fastest, and India, the Companys home market, is compounding at roughly 13%. Per-capita MedTech spend in India is about US$3 against a global average of nearly US$47, which points to a long runway, while import substitution and supportive policy add further tailwinds. The Company is positioned in the fastest-growing and more complex pockets of this market.
Strong Manufacturing Capabilities	Manufacturing spans 15 plants across five countries, with two further plants coming up in India. Deep backward integration, high automation and in-house sterilisation give the Company control over cost, quality and supply continuity, while global certifications support sales into 125+ countries and the most demanding regulated markets. This backbone allows POLYMED to scale to over 1.9 billion devices a year while protecting margins.
Innovation Engine	A team of around 90 R&D professionals, working out of DSIR-approved facilities in India and the R&D capability acquired in Europe, keeps a steady flow of differentiated products coming through. POLYMED holds more than 390 patents, with 60 applications under review, launched roughly 35 new products last year and carries a pipeline of over 100 products to be launched in next 3-4 years. Innovation is what keeps moving the Company up the technology curve and into higher-value verticals.
Global Distribution	Products reach customers through 1,000+ distributors and 590+ direct-sales associates across more than 125 countries. The Company is progressively going direct in key geographies such as Europe, the US and Latin America - capturing more of the value chain and deepening clinical relationships. This reach converts new launches into global revenue quickly and diversifies demand across markets and currencies.
Robust Financial Performance	Revenue has compounded at roughly 19% over FY22-FY26 on a mix diversified across segments and geographies, with a standalone EBITDA margin of 26.8%. The balance sheet carries effectively zero net debt, backed by around Rs.842 crore of cash and equivalents reserved for strategic initiatives, which means growth is funded without stretching the Company.
Experienced Management and Governance	POLYMED is led by promoters with over three decades in the medical-device industry, supported by an experienced board and a robust governance framework. A culture of capital discipline - built over 25 years of largely self-funded growth - guides every allocation decision, a consistency recognised by honours such as the EY Entrepreneur of the Year 2024 award.

Financial Performance

Basis of Preparation

The consolidated financial results for Fiscal 2026 include the operations of the newly acquired PendraCare Group (consolidated with effect from 23 September 2025) and the Citieffe Group (consolidated with effect from 7 November 2025) for part of the year. Consequently, the year-on-year movements discussed below are not strictly comparable with Fiscal 2025 and are materially influenced by these acquisitions, in addition to the underlying organic performance of the business.

For further details of these business combinations - including the purchase consideration, the assets and liabilities recognised at fair value, the intangible assets and goodwill arising, and the revenue and results contributed by the acquired entities - refer to Note 38 (Business Combinations) of the consolidated financial statements.

Financial Snapshot

A summary of the key financial indicators for the year is set out below, followed by a detailed discussion of each line item. As noted above, the Fiscal 2026 figures reflect the part-year consolidation of the acquired businesses and are therefore not strictly comparable with Fiscal 2025.

Particulars (Rs. lakh)	FY 2026	FY 2025	Change
Statement of Profit and Loss
Revenue from operations	1,87,525.9	1,66,983.2	+12.3%
Total income	1,99,534.1	1,75,895.9	+13.4%
Operating EBITDA	45,770.0	45,856.6	(0.2%)
Profit before tax	42,747.1	45,251.5	(5.5%)
Profit after tax	32,073.0	33,855.7	(5.3%)
Balance Sheet	FY 2026	FY 2025	Change
Total current assets	1,94,173.3	1,92,223.7	+1.0%
Non-current assets	1,97,683.4	1,27,021.6	+55.6%
Total assets	3,91,856.7	3,19,245.2	+22.7%
Total current liabilities	57,552.2	37,006.9	+55.5%
Non-current liabilities	19,380.2	5,672.5	+241.7%
Total liabilities	76,932.4	42,679.4	+80.3%
Net worth	3,10,617.3	2,76,565.8	+13.9%

Operating EBITDA is EBITDA before other income.. Figures in parentheses denote a decline

Income

The Companys total revenues comprise revenue from operations and other income.

Total income increased by 13.4% from Rs.1,75,895.9 lakh in Fiscal 2025 to Rs.1,99,534.1 lakh in Fiscal 2026. Revenue from operations increased by 12.3% from Rs. 1,66,983.2 lakh in Fiscal 2025 to Rs.1,87,525.9 lakh in Fiscal 2026, and our other income increased by 34.7% from Rs. 8,912.8 lakh in Fiscal 2025 to Rs. 12,008.2 lakh in Fiscal 2026, this increase being primarily due to growth in our revenue from operations, for reasons described below.

Revenue from Operations

Revenues from operations increased by 12.3% from Rs.1,66,983.2 lakh in Fiscal 2025 to Rs.1,87,525.9 lakh in Fiscal 2026, due to an increase in sale of products by 12.3% from Rs.1,65,502,3 lakh in Fiscal 2025 to Rs.1,85,887.8 lakh in Fiscal 2026, particularly medical devices such as blood bags, renal care products (including dialysis machines and dialyzers) and other infusion therapy products, both in the domestic and export markets, together with the consolidation of cardiology and orthopaedic products of the newly acquired PendraCare and Citieffe Groups, and an increase in other operating revenues by 6.5% from Rs.1,480.9 lakh in Fiscal 2025 to Rs.1,577.6 lakh in Fiscal 2026.

The growth was broad-based across geographies, delivered against a challenging external environment. Domestic revenue grew about 19.6% to Rs.58,173.1 lakh (Fiscal 2025: Rs.48,636.2 lakh), aided by import-substitution demand and the Companys widening hospital presence, while international revenue grew about 9.3% to fl,28,018.6 lakh (Fiscal 2025: Rs.1,17,089.3 lakh) - with Europe up about 7.1% and the Rest of the World about 11.4% - despite global supply-chain and logistics disruptions, elevated freight, the situation in West Asia and shifts in tariffs across certain markets. Renal care and certain other segments also faced pricing pressure from low-cost imports, including dumping from China; the Company managed these headwinds through its scale, backward integration, patent-protected portfolio and calibrated price increases.

Geography (Rs. lakh)	FY 2026	FY 2025	Change
India	58,173.1	48,636.2	+19.6%
Europe	59,697.6	55,744.0	+7.1%
Rest of the World	68,321.1	61,345.3	+11.4%
Export incentive	1,334.2	1,257.7	+6.1%
Total Operating Revenue	1,87,525.9	1,66,983.2	+12.3%

By segment, the Company continued its shift towards higher-value verticals: renal care grew about 24.5% to Rs.18,762.8 lakh and the "Others" portfolio (cardiology, critical care, blood management, surgery and other categories) about 36.3% to Rs.69,041.4 lakh, while the core infusion-therapy franchise was broadly stable at Rs.99,728.0 lakh. The rising share of these higher-technology segments also supported the improvement in gross margin during the year.

Segment (Rs. lakh)	FY 2026	FY 2025	Change
Infusion Therapy	99,728.0	1,01,237.7	(1.5%)
Renal Care	18,762.8	15,071.7	+24.5%
Others	69,041.4	50,671.3	+36.3%
Total Operating Revenue	1,87,525.9	1,66,983.2	+12.3%

Other Income

Other income increased by 34.7% from f 8,912.8 lakh in Fiscal 2025 to Rs. 12,008.2 lakh in Fiscal 2026, primarily due to higher realised gains on mutual funds and foreign exchange gains, partially offset by lower unrealised gains on mutual funds measured at fair value through profit or loss.

Expenses

The Companys total expenses increased by 19.5% from f 1,31,162.4 lakh in Fiscal 2025 to Rs. 1,56,675.0 lakh in Fiscal 2026 due to the reasons set forth below, including the consolidation of the cost base of the acquired PendraCare and Citieffe Groups for part of the year.

Cost of raw materials consumed

Cost of raw materials including packaging materials consumed increased by 4.9% from Rs.57,136.3 lakh in Fiscal 2025 to Rs. 59,938.7 lakh in Fiscal 2026, due to an Increase in raw materials consumed by 6.0% from Rs. 46,373.8 lakh in Fiscal 2025 to Rs. 49,175.1 lakh in Fiscal 2026, while cost of packaging material consumed was broadly stable at f10,692.2 lakh in Fiscal 2026 as compared to Rs. 10,758.1 lakh in Fiscal 2025.

Notably, the cost of raw materials consumed declined as a proportion of revenue from operations, from 34.2% in Fiscal 2025 to 32.0% in Fiscal 2026 - an improvement of about 226 basis points - reflecting better raw-material sourcing, a richer product mix, acquisition impact and operating leverage. This translated into a corresponding expansion in gross profit margin during the year.

Employee Benefit Expenses

Employee benefit expenses increased by 33.4% from Rs. 30,153.2 lakh in Fiscal 2025 to Rs. 40,225.6 lakh in Fiscal 2026, an increase of Rs. 10,072.4 lakh. Significant part of this Of this increase was on account of the consolidation of the employee cost base of the acquired PendraCare and Citieffe Groups, with the balance driven primarily by an increase in the number of full-time employees and production workers, together with annual increments.

Research and development expenses

Research and development expenses increased by 24.4% from Rs. 2,402.5 lakh in Fiscal 2025 to Rs. 2,987.6 lakh in Fiscal 2026, primarily on account of an increase in employee benefit expenses in respect of research and development professionals by 47.2% from Rs. 1,016.4 lakh in Fiscal 2025 to Rs. 1,496.1 lakh in Fiscal 2026, driven by new technical hires, including engineers, and the strengthening of R&D teams in India.

Other Expenses

Other expenses increased by 20.4% from Rs. 33,544.6 lakh in Fiscal

2025 to Rs. 40,400.0 lakh in Fiscal 2026, on account of higher freight and forwarding, power and fuel, and legal and professional fees. The increase also includes acquisition-related expenses and the impact of consolidation of the acquired entities on key cost items such as job work charges, repairs and maintenance, lease rentals, commission on sales etc.

Earnings before Interest, Taxes,

Depreciation and Amortization (EBITDA)

Consolidated operating EBITDA (that is, EBITDA before other income) was Rs.45,770.0 lakh in Fiscal 2026 as compared to Rs.45,856.6 lakh in Fiscal 2025, and the operating EBITDA margin was 24.4% in Fiscal

2026 as compared to 27.5% in Fiscal 2025. The moderation in the consolidated operating EBITDA margin is primarily attributable to the

part-year consolidation of the recently acquired PendraCare and Citieffe Groups, which currently operate at lower margins than the standalone business, together with one-time acquisition-related expenses of f970.0 lakh incurred during the year. On a standalone basis, the Company sustained an operating EBITDA margin of 26.8%, near the upper end of its guidance range of 25%-27%.

Depreciation and amortization expenses

The Companys depreciation and amortisation expense increased by 38.9% from Rs. 8,318.2 lakh in Fiscal 2025 (restated to exclude the impact of assets transferred to research and development expense) to Rs. 11,551.7 lakh in Fiscal 2026. This was primarily on account of the amount capitalised during the year about Rs.25,782.2 lakh - together with the depreciation and amortisation of the acquired PendraCare and Citieffe Groups, including the amortisation of intangible assets recognised at fair value on acquisition.

Finance costs

Finance costs increased by 52.5% from Rs. 1,199.7 lakh in Fiscal 2025 to f 1,829.1 lakh in Fiscal 2026 primarily due to an increase in borrowings, including borrowings at the acquired foreign subsidiaries.

Profit Before Tax

The Companys profit before tax was Rs. 42,747.1 lakh in Fiscal 2026 as compared to Rs. 45,251.5 lakh in Fiscal 2025. Profit before tax for Fiscal 2026 is after an exceptional item of f 680.4 lakh, being a provision recognised pursuant to the notification of the Labour Codes (dated 21 November 2025). The year-on-year movement is largely on account of the lower-margin profile of the newly acquired businesses during their initial period of consolidation, together with the one-time acquisition-related and expenses incurred during the year.

Tax Expenses

Current tax expenses increased from Rs. 9,560.3 lakh in Fiscal 2025 to Rs. 10,115.8 lakh in Fiscal 2026. Deferred tax decreased from Rs. 1,825.3 lakh in Fiscal 2025 to Rs. 528.1 lakh in Fiscal 2026 on account of movements in timing differences. Tax adjustment for earlier years (net) was Rs. 30.2 lakh in Fiscal 2026 as compared to Rs. 10.2 lakh in Fiscal 2025, as a result of tax assessment of earlier years. As a result, the total tax expense amounted to Rs. 10,674.1 lakh in Fiscal 2026 compared with Rs. 11,395.8 lakh in Fiscal 2025.

Profit for the Year

For the various reasons discussed above, we recorded a profit after tax of f 32,073.0 lakh in Fiscal 2026 compared to Rs. 33,855.7 lakh in Fiscal 2025.

Fiscal 2026 represented a year of deliberate transition and investment, in which the Company expanded its platform through two strategic acquisitions and continued to invest in high-technology segments, clinical capabilities and capacity, even as it navigated a challenging external environment. These initiatives position the Company for accelerated and higher-quality growth in the coming years.

Financial Position Cash and cash equivalents

The Company closed Fiscal 2026 with cash and cash equivalents of Rs.84,220 lakh (Rs.842.2 crore) (Fiscal 2025: Rs.1,22,690 lakh), comprising cash, bank balances and treasury investments held as a strategic reserve for future strategic initiatives. The reduction during the year reflects the redeployment of a part of this reserve to fund the PendraCare and Citieffe acquisitions, which were financed predominantly from the Companys own accruals and the proceeds of its earlier qualified institutional placements. Even after this deployment, the balance comfortably exceeds the Companys total borrowings of Rs.34,161.8 lakh, leaving Polymed in a net cash position of approximately Rs.50,000 lakh (Rs.500 crore) and preserving the debt-light balance sheet that has underpinned its growth.

Goodwill and acquired intangible assets

Goodwill on consolidation increased to Rs.27,378.7 lakh (Fiscal 2025: Rs.2,858.1 lakh) and other intangible assets to f15,709.5 lakh (Fiscal 2025: Rs.1,519.3 lakh), arising principally on the PendraCare and Citieffe acquisitions. The purchase price allocation for Pendracare has been determined on a provisional basis and may be revised within the measurement period of up to twelve months from the respective acquisition dates, as the fair valuation of the assets

Borrowings

Total borrowings increased to Rs.34,161.8 lakh (Fiscal 2025: f17,765.0 lakh), comprising long-term borrowings of Rs.5,209 lakh and short-term borrowings of Rs.28,953 lakh. The increase reflects both higher utilisation of working-capital facilities at the parent to part-fund the acquisitions and the consolidation of borrowings at the acquired European subsidiaries, with finance costs correspondingly rising to Rs.1,829.1 lakh (Fiscal 2025: Rs.1,199.7 lakh). Notwithstanding this increase, the Companys borrowings remain modest relative to its equity base of f3,14,924 lakh (Rs.3,149.2 crore) and are more than covered by its cash and treasury investments, keeping the balance sheet effectively net cash and conservatively capitalised, acquired and liabilities assumed is finalised. In line with Ind AS, goodwill is not amortised but is tested for impairment at least annually at the cash-generating-unit level, while the acquired intangible assets are amortised over their estimated useful lives.

Based on the impairment assessment carried out during the year, no impairment was required

Inventory

Inventories increased to Rs.43,384.1 lakh as at 31 March 2026 (Fiscal 2025: Rs.28,557.3 lakh). A significant part of this increase arose from the consolidation of the newly acquired businesses, with the balance reflecting the organic growth of the business and a deliberate strengthening of raw-material inventory. Carrying higher raw-material stocks enabled the Company to mitigate the supply-chain disruption arising from the recent West Asia crisis and to absorb a part of the impact of input-price increases during the year, thereby helping to protect production continuity and margins. The acquired businesses, particularly in the European markets, also carry a higher inventory-holding profile, which the Company expects to optimise as it integrates their operations.

Trade receivables

Trade receivables increased to Rs.53,117.3 lakh as at 31 March 2026 (Fiscal 2025: Rs.34,973.2 lakh). A significant part of this increase arose from the consolidation of the newly acquired businesses, with the balance reflecting the organic growth of the business. The acquired businesses, particularly in certain European markets, carry longer receivable cycles, which the Company expects to optimise as it integrates their operations; excluding the acquisitions, the receivables intensity of the core operations remained broadly stable.

Key Financial Ratios

The Companys key financial ratios for the year, together with the reasons for material year-on-year movements, are summarised below. The movements principally reflect the acquisition-related deployment of treasury, the part-year consolidation of the lower-margin acquired businesses and the associated one-time costs, rather than any change in the underlying financial discipline of the business.

Ratios	Numerator	Denominator	31st Mar26	31s,Mar,25	Deviation	Reason for Deviation
Current Ratio	Current Assets	Current Liabilities	3.37	5.19	-35%	Decline due to impact of acquisitions on working capital as well as reduction of short term investments and cash & cash equivalents due to ongoing capex and payments for acquisitions
Inventory Turnover Ratio	COGS	Average Inventory	1.78	2.35	-24%	Declined due to increase in inventory inline with increase in operations as well as due to impact of acquistions
Trade Receivable Turnover Ratio	Sales	Average Trade Receivables	4.26	5.39	-21%	Largely due to consolidation of the newly acquired foreign companies and longer credit terms offered to certain customers
Trade Payable Turnover Ratio	Purchases	Average Trade Payables	7.72	8.19	-6%	NA
Net Profit Margin	PAT	Total Income	16.1%	19.2%	-310bps	Decline due to one time exceptional item relating to labour code impact, acquisition related costs as well as consolidation of lower margin acquisitions
Return on Equity	PAT	Average Shareholder Equity	12.9%	18.5%	-560bps	Decline due to partial period consolidation of acquisition and high capex intensity
Return on Capital Employed*	PAT	Average Capital Employed	16.4%	23.5%	-710bps	Decline due to partial period consolidation of acquisition and high capex intensity
Fixed Assets ^Turnover Ratio	Sales	Average Fixed Assest	1.64	1.80	-9%	J

* ROE: PAT excludes the impact of unutilized QIP funds and related treasury income, acquisition-related costs, and other one-time items. Equity excludes unutilized QIP funds. ** ROCE: EBIT excludes the impact of unutilized QIP funds and related treasury income, acquisition-related costs, and other one-time items. Capital employed excludes unutilized QIP funds.

Risk and Concern

As a medical device manufacturing company, the Company faces risks, both internal and external, in its day-to-day operations and in the pursuit of its longer-term objectives. A structured Risk Management Policy and dedicated risk workshops cover each business vertical and key support function, under which risks are identified, assessed, analysed and accepted or mitigated to an acceptable level within the risk appetite agreed with the Board. The principal risks and the Companys mitigation measures are summarised below.

Risk	Details	Mitigation Strategy
Economic Risk	Macroeconomic factors largely beyond the Companys control - fluctuations in demand, input-cost inflation in energy, raw materials and labour, and currency volatility - can compress margins and affect sales.	The Company diversifies its customer base and product portfolio, invests in lean manufacturing, automation and energy-efficient technologies, and uses financial instruments to hedge raw-material and currency exposure, while leveraging its export franchise across 125+ countries.
Foreign Exchange Risk	A substantial part of revenue is earned in foreign currency through exports, exposing earnings to exchange-rate movements against the Rupee and major currencies.	A natural hedge exists as a large share of revenue is foreign-currency denominated; the Company actively monitors exposures and uses hedging instruments, and rupee depreciation generally benefits realisations.
Technological and Innovation Risk	Medical devices are subject to rapid technological change; failure to innovate or to keep pace with evolving clinical needs and standards could erode competitiveness.	The Company sustains R&D investment (1.59% of revenue in FY2026) through DSIR-approved facilities in India and acquired R&D teams in Europe, holds 390+ patents, and continuously launches differentiated, high-complexity products.
Credit Risk	Risk of financial loss if customers or counterparties fail to meet payment obligations, particularly across diverse export markets.	The Company follows a defined credit-control policy, monitors receivables closely, secures advances and credit insurance where appropriate, and maintains a broad, geographically diversified customer base.
Quality, Accuracy and Regulatory Risk	In medical devices, even minor deviations in accuracy or precision can lead to incorrect diagnoses or health risks; non-compliance with regulatory standards could affect approvals and reputation.	Rigorous quality systems, automation and high engineering tolerances are maintained across facilities, supported by ISO 13485, EN ISO and FDA/MDR certifications and continuous regulatory monitoring across markets.
Manufacturing Facility Risk	The Group operates 15 manufacturing facilities across five countries; disruption from natural disasters, fuel shortages, mechanical failures, geopolitical events or loss of key licences could affect supply.	Comprehensive business-continuity plans, preventive maintenance, redundancy in critical operations, adequate insurance and rigorous compliance with local and International standards enhance operational resilience.
Acquisition and Integration Risk	FY2026 acquisitions of PendraCare and Citieffe and entry into Brazil introduce integration challenges across geographies, regulations and cultures; acquired businesses currently operate at lower margins.	A structured integration programme overseen by a dedicated corporate-development function retains experienced management of acquired businesses, pursues procurement, supply-chain and manufacturing synergies.
Geopolitical, Supply Chain and Logistics Risk	Export-driven operations are exposed to regional conflict, shipping disruption, elevated freight, crude-linked input-cost inflation and changes in trade policy and tariffs.	The Company holds adequate strategic inventory, diversifies sourcing with indigenous and in-housed components, manages pricing actively, and benefits from a widening direct presence across markets that reduces single-route dependence.
Competition and Duty-Inversion Risk V	Low-cost imports, including from China, benefit from low or nil duty in segments such as renal care, while domestic manufacturers bear higher input duties, creating an element of inverted duty structure and price pressure.	Manufacturing scale, backward integration and a differentiated, patent-protected portfolio keep the Company cost-competitive; it expands import-substitution offerings and engages with the Government of India for a level playing field on duties. J

Internal Control Systems & Adequacy

The Company has established a robust internal control framework commensurate with the size, scale, and complexity of its operations. The framework is designed to ensure orderly and efficient conduct of business, safeguarding of assets, accuracy and completeness of accounting records, reliability of financial and operational information, prevention and detection of frauds and errors, and compliance with applicable laws, regulations, policies, and procedures.

The internal control framework encompasses key business processes, including procurement, manufacturing, inventory management, quality assurance, sales and distribution, finance and accounting, and other support functions. The controls embedded across these processes promote operational efficiency, accountability, transparency, and adherence to the Companys established policies and procedures.

The Company has a structured internal audit mechanism based on a risk-based audit approach. The internal audit function periodically reviews the adequacy and effectiveness of internal controls, risk management practices, and governance processes across various functions and locations. Significant audit observations, recommendations, and the status of corrective actions are reviewed by the Management and periodically placed before the Audit Committee. Appropriate corrective measures are undertaken to continuously strengthen the control environment and improve operational effectiveness.

The Company has also implemented systems and processes for effective utilization of resources, timely and reliable financial reporting, information security, risk management, regulatory compliance, and informed decision-making. The internal control systems are periodically reviewed and strengthened in line with changes in the business environment, operational requirements, and regulatory framework.

The Management believes that the Companys internal control systems are adequate and operating effectively, providing reasonable assurance regarding the efficiency and effectiveness of operations, reliability of financial reporting, safeguarding of assets, and compliance with applicable laws and regulations.

Human Resource

At Poly Medicure Limited, our people philosophy is centred on building a high-performance organization where governance, talent, capability and culture drive sustainable business growth. During FY 2025-26, with a workforce of over 7,500 employees, the Company continued to strengthen its Human Capital ecosystem through focused investments in leadership development, employee experience and organizational capability.

Strengthening Governance and Ethical Culture

The Company reinforced its governance framework through a revised Code of Conduct, aligned with Global Business Standards (GBS) and anchored on eight core principles—Fiduciary, Property, Reliability, Transparency, Dignity, Fairness, Citizenship and Responsiveness. Mandatory e-learning on the Code of Conduct was completed by over 1,500 staff employees, strengthening ethical awareness, compliance and responsible business practices.

Developing Capability and Leadership

The performance management framework was strengthened through PACE (Performance Appreciation & Competency Evaluation), integrating goal setting, competency assessment, calibration and development planning. SAMVAAD further enabled meaningful manager-employee performance and development conversations, reinforcing a culture of continuous feedback. Learning and development remained a priority through supervisory, technical, behavioural, functional and Al-focused programmes, along with counselling skills training. A structured Talent Management Framework categorized employees into Star Performers, High Potentials, Solid Performers and Improvement Required, supporting differentiated development, succession planning and leadership pipeline creation.

Building Future Talent

The Company strengthened its talent acquisition strategy through campus engagement with premier institutions, including BITS Pilani, DTU, PEC, NITs, NIPER and NTs, alongside focused lateral hiring initiatives. Walk-in recruitment drives resulted in the hiring of 93 employees. The Company also launched its GET/PGET Programme, selecting seven young professionals who are scheduled to join in the subsequent quarter. The adoption of HirePro and SHL OPQ32R aptitude and psychometric assessments further enhanced the objectivity and quality of talent selection.

Enhancing Employee Experience

New Employee experience was strengthened through Prarambh, the AMIGO Buddy Programme and the My First Impression initiative. More than 156 trained AMIGO Buddies supported new employees during onboarding, while structured feedback at Day 15 and Day 90 enabled continuous improvement of the onboarding experience.

Employee well-being remained a priority under the PULSE framework through preventive health check-ups, Blue Zone initiatives, yoga, meditation, nutrition counselling, cultural celebrations and engagement activities.

The POLYMED Achiever Award continued to recognize exceptional individual and team contributions, reinforcing a culture of performance, innovation and continuous improvement.

Health, Safety and Compliance

The Company remained committed to providing a safe, healthy and compliant workplace through 133 Health & Safety training programmes, the introduction of a Pre-Employment Health Check-up Policy, and the establishment of a dedicated Surveillance Department. Industrial relations remained cordial throughout the year, with no industrial disruptions or disputes. Supported by a non-unionized workforce and full compliance with applicable labour, health and safety regulations, the Company continued to foster a safe, inclusive and high-performing work environment.

Sustainability Approach

Poly Medicure continues to advance sustainable and responsible growth by embedding environmental stewardship, employee well-being, and operational excellence across its business. Approximately 70% of the Companys facilities are certified under ISO 14001:2015 reflecting its structured approach to environmental management. During the year, the Company commissioned a 9.9 MWp open-access solar plant under a long-term Power Purchase Agreement, operational from 9 November 2025. The project generated approximately 3,297 MWh of renewable electricity and contributed to a reduction of around 2,341 tC02 in Scope 2 emissions. Overall solar power generation increased 2.39x over FY 2024-25.

Supported by greater use of on-site and open-access renewable energy, the Company achieved an approximately 8% reduction in absolute Scope 2 emissions and around 13% reduction in Scope 2 emissions intensity, along with a 1 % decline in energy consumption compared with FY 2024-25, despite the commissioning of a new plant. On the social front, Poly Medicure strengthened employee health, safety, and capability building through annual health check-ups for more than 300 employees, one-on-one consultations with certified nutritionists for 202 employees, and approximately 9,000 employee learning hours across 53 distinct training topics. The Company also maintained a strong safety record, reporting zero fatalities over the past decade. Further strengthening its sustainable product approach, the Company completed a cradle-to-gate Life Cycle Assessment of its Prefilled Syringe, conducted in accordance with ISO 14040/44 and independently verified as per IS014071.

For more details, please refer to the Business Responsibility and Sustainability Report (BRSR) forming part of this Annual Report.

Cautionary Statement

Statements in this report on Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied since the Companys operations are influenced by many external and internal factors beyond its control. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, based on any subsequent developments, information or events. Readers are cautioned that the risks outlined here are not exhaustive. Readers are requested to exercise their judgment in assessing the risks associated with the Company.