Aashka Hospitals Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Overview

Aashka Hospitals Limited ("Aashka Hospitals" or "the Company") is a multispeciality tertiary-care hospital established in 2012 and located at Gandhinagar, the capital city of Gujarat. The Company has developed its healthcare facility with the objective of providing advanced medical and surgical treatment to patients in Gandhinagar and the surrounding regions, thereby reducing the need for patients to travel to larger metropolitan centres for specialised and tertiary-care treatment.

The Company operates an advanced hospital infrastructure comprising 150 beds, including a significant critical-care capacity, along with specialised operating theatres, cardiac-care infrastructure, diagnostic facilities and technology-enabled administrative systems. The hospital is equipped with Class 100 modular operating theatres, dedicated operating theatres for super-speciality procedures, procedure rooms for endoscopy and minor procedures, a state-of-the-art flat-panel Cath Lab, CT Scan facilities and a pneumatic transfer system. The operating theatres are equipped with laminar airflow systems, HEPA filtration and modern anaesthesia equipment.

The Companys infrastructure and service profile position it within the organised multispeciality and tertiary-care hospital segment, where demand is being driven by increasing healthcare awareness, changing disease patterns, rising life expectancy, growth in insurance coverage and increasing demand for specialised medical treatment.

Indian Healthcare Industry

The Indian healthcare industry continues to undergo structural transformation, supported by increasing public and private investment, improving healthcare infrastructure, greater adoption of technology, expansion of health insurance and government-sponsored healthcare schemes, and rising demand for quality medical services.

Indias healthcare requirements remain substantial due to its large population, changing demographic profile and increasing incidence of non-communicable and lifestyle-related diseases. Cardiovascular diseases, diabetes, cancer, neurological disorders, renal conditions and other chronic diseases are increasingly contributing to demand for specialised and tertiary healthcare services.

The hospital sector is also witnessing gradual formalisation and consolidation. Large organised hospital chains are expanding their geographical presence, while regional and mid-sized hospitals continue to play an important role in serving local and regional healthcare needs.

For a hospital such as Aashka Hospitals, the increasing preference of patients for integrated healthcare facilities offering multiple specialties, diagnostics, emergency services, critical care and surgical capabilities under one roof presents a favourable structural opportunity.

Macro-Economic Environment

Healthcare is an essential service and therefore tends to exhibit comparatively resilient demand across economic cycles. Nevertheless, the hospital industry remains influenced by broader macroeconomic conditions, including inflation, interest rates, disposable income, employment conditions and healthcare expenditure.

Indias continuing economic development, urbanisation and rising healthcare awareness are expected to support long-term growth in organised healthcare demand. At the same time, medical inflation, manpower costs, energy costs, pharmaceuticals, medical consumables and maintenance expenditure continue to place pressure on hospital operating costs.

Government expenditure on healthcare also remains an important driver of the sector. The Union Budget 2026-27 increased the allocation to the Ministry of Health and Family Welfare to 1,06,530.42 crore, approximately 10% higher than the Revised Estimates for FY 2025-26. The allocation for PM-

JAY was increased to 9,500 crore, while the allocation for PM-Ayushman Bharat Health Infrastructure Mission was increased to 4,770 crore.

These developments demonstrate the continued policy emphasis on healthcare access, infrastructure, critical care and strengthening of the healthcare delivery ecosystem.

Micro-Economic and Industry Developments

At the industry level, the following developments are expected to remain important:

Increasing prevalence of lifestyle and non-communicable diseases.

Growing demand for specialised and tertiary-care services.

Increasing awareness regarding preventive healthcare and early diagnosis.

Rising health insurance penetration.

Expansion of government-sponsored healthcare programmes.

Increasing demand for critical-care and emergency medical services.

Greater use of advanced diagnostic and surgical technology.

Increasing adoption of digital hospital-management systems.

Greater focus on quality, patient safety and clinical outcomes.

Increasing healthcare demand from Tier-II and developing urban centres.

The Companys presence in Gandhinagar provides it with access to a growing urban and semi-urban catchment area. Its tertiary-care positioning and specialised infrastructure provide a platform to address complex medical requirements within the region.

Technology is also becoming increasingly important in healthcare delivery. The Union Budget 2026-

27 increased the allocation for the Ayushman Bharat Digital Mission to 350 crore, with the objective of supporting digital health records, interoperability, telemedicine and integrated hospital information systems.

Aashka Hospitals existing software-driven administrative infrastructure provides a foundation for further technology-led improvements in operational efficiency, patient management and administrative processes.

OPPORTUNITIES AND THREATS

Opportunities

The Company believes that the evolving Indian healthcare environment presents several opportunities for sustainable growth.

Growing demand for tertiary healthcare:

The increasing prevalence of complex and chronic diseases is expected to support demand for tertiary and super-speciality healthcare services. Aashka Hospitals existing infrastructure enables the Company to provide a broad range of specialised treatment options.

Strong critical-care capability:

The Companys substantial ICU infrastructure provides an important competitive strength in critical-care, emergency and high-acuity medical services. The availability of specialised intensive-care facilities supports the Companys ability to manage complex cases.

Cardiac-care opportunity:

The Companys cardiac operating infrastructure and state-of-the-art flat-panel Cath Lab provide a platform for strengthening cardiac-care services. The demand for cardiovascular treatment is expected to remain significant given the prevalence of cardiovascular diseases and associated risk factors.

Multispeciality model:

A multispeciality hospital enables patients to access multiple medical disciplines within a single institution. This can facilitate internal referrals between departments and improve utilisation of hospital infrastructure.

Gandhinagar catchment:

The Companys location in Gandhinagar provides access to the capital city and its surrounding catchment areas. The Companys objective of providing tertiary healthcare locally can reduce the need for patients to travel to Ahmedabad or other major centres for specialised treatment.

Increasing insurance coverage:

Expansion of health insurance and government-sponsored healthcare schemes can improve affordability and potentially increase utilisation of organised hospital services.

Preventive healthcare:

Increasing awareness of preventive health and early diagnosis creates opportunities in health check-ups, screening, diagnostics and wellness-oriented services.

Technology-led healthcare:

The Companys software-driven administration, CT facilities, Cath Lab, pneumatic transfer system and modern operating-theatre infrastructure provide opportunities to further integrate technology into clinical and administrative processes.

Capacity utilisation:

As the hospital improves its brand visibility, doctor network, referral relationships and service offerings, there is an opportunity to improve utilisation of existing hospital infrastructure and enhance operating leverage.

Threats

The principal threats to the Companys business include:

Competition from established multispeciality and super-speciality hospitals in Gandhinagar and the wider Ahmedabad-Gandhinagar region.

Entry or expansion of large national and regional hospital chains.

Shortage of qualified doctors, nurses, technicians and allied healthcare professionals.

Increasing remuneration and retention costs for specialised medical personnel.

Inflation in medicines, medical consumables, utilities and maintenance.

High capital expenditure requirements for upgrading medical infrastructure.

Changes in insurance and government healthcare reimbursement mechanisms.

Increasing regulatory and compliance requirements.

Rapid technological changes resulting in potential obsolescence of medical equipment.

Cybersecurity and data-protection risks arising from digitalisation.

Reputational risks associated with patient complaints or adverse clinical events.

OUTLOOK

The management remains positive about the medium- and long-term prospects of the Indian healthcare sector and the Companys ability to participate in this growth.

The fundamental demand drivers for organised healthcare remain strong, including increasing healthcare awareness, rising prevalence of chronic diseases, demographic changes, growing insurance coverage, increasing demand for specialised treatment and the need for modern healthcare infrastructure.

The Governments continued focus on healthcare infrastructure and medical capacity is also supportive. The FY 2026-27 Budget increased allocations towards PM-JAY, healthcare infrastructure, medical education, human resources for health and digital healthcare. The PM-ABHIM allocation, in particular, increased by approximately 67.7% over the FY 2025-26 Revised Estimates.

Against this backdrop, Aashka Hospitals intends to focus on strengthening its position as a tertiary-care healthcare provider in Gandhinagar.

The Companys strategic priorities are expected to include:

Optimising utilisation of existing hospital capacity.

Strengthening high-demand specialties and super-speciality services.

Further developing critical-care and emergency-care capabilities.

Strengthening cardiac-care services.

Expanding the doctor and specialist network.

Improving patient experience and service quality.

Increasing awareness and outreach within the Companys catchment area.

Leveraging technology for administrative and operational efficiency.

Maintaining prudent financial and capital allocation discipline.

Continuing to strengthen clinical governance and patient-safety practices.

The Companys existing infrastructure, including modern operating theatres, critical-care capacity, Cath Lab, diagnostic facilities and technology-enabled administration, provides a strong base for future growth.

The management will continue to evaluate opportunities for expansion, service-line development and capacity enhancement based on patient demand, market conditions, available resources and financial viability.

RISKS AND CONCERNS

The Company operates in an industry where clinical quality, patient safety, reputation, regulatory compliance and availability of skilled personnel are critical to long-term sustainability.

Clinical and Patient-Safety Risk

The delivery of tertiary healthcare involves inherent clinical risks. Adverse medical events, hospital-acquired infections, medication errors, procedural complications or deficiencies in patient care may adversely affect patients and the Companys reputation.

The Company seeks to mitigate such risks through qualified medical professionals, established clinical protocols, monitoring mechanisms, infection-control practices, appropriate documentation and quality-management processes.

Doctor and Specialist Dependency

The availability of experienced consultants and specialists is essential for a multispeciality hospital. Competition for experienced medical professionals can result in higher remuneration and retention costs.

The Company therefore focuses on developing and maintaining relationships with qualified doctors and specialists and strengthening its medical team according to patient requirements.

Competition Risk

Aashka Hospitals operates in the competitive healthcare market of the Gandhinagar-Ahmedabad region. Large hospital chains and other established healthcare providers may possess greater financial resources, stronger brands and broader geographical networks.

The Companys ability to differentiate itself through tertiary-care capabilities, critical-care infrastructure, patient experience, clinical expertise and local accessibility will remain important.

Regulatory Risk

Hospitals are subject to extensive regulations relating to healthcare delivery, clinical establishments, pharmaceuticals, medical devices, biomedical waste, fire and safety, labour, patient rights, data protection and other statutory matters.

Changes in regulatory requirements may increase compliance costs or require modifications to existing processes and infrastructure.

Medical Consumables and Cost Inflation

Hospital profitability can be affected by fluctuations in the prices of medicines, medical consumables, utilities, maintenance and other operating inputs.

Effective procurement, inventory management, vendor management and cost control remain important to mitigate such risks.

Insurance and Reimbursement Risk

The growing contribution of insurance and government-sponsored schemes to healthcare financing creates exposure to reimbursement rates, documentation requirements, claim processing and settlement timelines.

The Company seeks to mitigate this risk through appropriate billing, documentation, claims processing and receivable-monitoring systems.

Technology Risk

Modern healthcare delivery increasingly depends on medical equipment and information technology. Equipment failure, technology obsolescence, system downtime or cybersecurity incidents may disrupt operations.

The Company seeks to address such risks through appropriate maintenance, periodic technology upgrades, system controls, backups and access-management procedures.

Reputation Risk

Patient trust is fundamental to the hospital business. Any adverse clinical incident, service deficiency or negative publicity can have an impact beyond the immediate financial cost.

The Company therefore places emphasis on patient care, transparency, grievance resolution, service quality and ethical medical practices.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems and procedures commensurate with the size and nature of its operations.

The internal-control framework is intended to provide reasonable assurance regarding:

Safeguarding of assets.

Accuracy and completeness of accounting records.

Reliability of financial reporting.

Prevention and detection of fraud and errors.

Compliance with applicable laws and regulations.

Effective and efficient conduct of operations.

Given the nature of hospital operations, the Companys internal controls cover key operational areas including procurement, inventory, pharmacy, medical consumables, billing, patient registration and discharge, insurance claims, cash and bank transactions, fixed assets, payroll and statutory compliance. Particular emphasis is required in relation to medicines and medical consumables. Controls relating to procurement, receipt, storage, issue, stock reconciliation, expiry monitoring and authorisation help minimise wastage, pilferage and stock-outs.

Revenue-cycle management is another important control area. The Company needs to ensure that services provided to patients are appropriately captured and billed, supporting documentation is maintained and insurance/TPA claims are submitted accurately and in a timely manner.

The Companys technology-enabled administrative infrastructure provides an opportunity to strengthen system-based controls, including authorisation, access controls, audit trails, data integrity and management reporting.

Internal controls are subject to periodic review by management and the Companys audit mechanisms. Audit observations, where applicable, are considered by management and appropriate corrective measures are undertaken.

The Company believes that its internal-control systems are adequate and commensurate with the size, scale and complexity of its operations. The Company will continue to strengthen its control environment as its operations, technology adoption and service portfolio evolve.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATION PERFORMANCE

During the year under review, total earnings has been INR 2,5727.94 Lakhs as compared to INR 2,598.54 Lakhs in the previous year. Profit of the Company after tax stood at INR 333.89 Lakhs as compared to profit of the Company INR 326.61 Lakhs in the previous year.

HUMAN RESOURCE

Human resources constitute one of the most important assets of Aashka Hospitals because healthcare delivery is fundamentally dependent upon skilled medical, nursing, paramedical, technical, administrative and support personnel.

The Companys ability to provide high-quality tertiary healthcare depends upon maintaining an appropriate mix of experienced consultants, specialists, nurses, technicians, pharmacists, administrative personnel and other support staff.

The healthcare industry continues to face competition for qualified medical and allied healthcare professionals. The Union Budget 2026-27 has accordingly placed emphasis on strengthening healthcare workforce capacity, including increased allocations for Human Resources for Health and Medical Education. The Government has also announced measures to strengthen allied healthcare manpower and caregiver capacity.

Against this industry backdrop, the Companys human-resource priorities include:

Attracting and retaining qualified medical professionals.

Strengthening nursing and paramedical capabilities.

Continuous training and skill development.

Training relating to patient safety and infection control.

Familiarisation with medical equipment and technology.

Strengthening emergency and critical-care competencies.

Performance monitoring and employee engagement.

Maintaining a safe and professional workplace.

Compliance with applicable labour and employment regulations.

The Companys advanced infrastructure, including critical-care facilities, modern operating theatres, cardiac-care infrastructure and diagnostic capabilities, requires appropriately trained personnel capable of operating and maintaining such systems effectively.

The Company also recognises that employee engagement and harmonious industrial relations are important for continuity of healthcare services. Management endeavours to maintain open communication with employees and address workplace concerns through appropriate mechanisms.

The Company remains committed to developing a skilled, motivated and patient-centric workforce and considers continuous investment in human capital essential for sustainable growth.

During the period under review, the company had 235 employees on roll.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR

Sr. No. Particulars	FY 2025 26	FY 2024 25	Remarks
1. Debtors Turnover Ratio	3.94	4.75	-
2. Inventory Turnover Ratio (Only Pharmacy)	9.35	9.40	-
3. Interest Coverage Ratio	6.36	4.41	There has been improvement of 44.22% in Interest Coverage, due to enhanced profitability of the Company
4. Current Ratio	2.80	1.29	Due to improvement in the financial efficacy of the Company, the Current Ratio has been increased by 117.49%
5. Debt Equity Ratio	0.06	0.07	-
6. Operating Profit Margin (%)	18.43	33.61	Due to the increased operational cost, there has been decrease in Operational Profit Margins by 45.16%.
7. Net Profit Margin (%)	14.51	14.42	-
8. Return on Net Worth	3.29	5.05	There has been 34.85% reduction was primarily attributable to the comparatively lower growth in profitability relative to the Companys net worth during the year