Aashka Hospitals Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The healthcare and hospital industry is undergoing significant transformation driven by demographic shifts, technological advancements, and evolving patient expectations. In FY 2024-25, the industry continues to grapple with increasing patient demand fuelled by an aging population and a rise in chronic and complex health conditions, necessitating expanded inpatient care and enhanced hospital infrastructure.

Capital investments in healthcare facilities have increased substantially, with a growing focus on renovation, modernization, and expansion of hospital capacities. Providers are investing in new bed towers, advanced diagnostic imaging services, and integrating smart building technologies to improve efficiency and patient experience. These investments address growing utilization rates and competitive pressures, enabling hospitals to attract patients and skilled professionals alike.

Technological innovation remains a critical growth driver. Artificial intelligence, Internet of Things (IoT), and robotics are increasingly integrated within hospital operations to enhance diagnostics, patient monitoring, and treatment delivery. These smart technologies improve clinical outcomes and operational efficiency, supporting the shift towards value-based care.

On the government front, healthcare spending has seen a notable rise with a 12.96% increase in the 2024-25 healthcare budget allocation, reaching 90,958 crore in India. The government is actively promoting healthcare through various flagship schemes such as Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), which provides health insurance coverage of up to 5 lakh per family annually to economically weaker sections, benefitting over 23 crore individuals. Additionally, the National Health Mission (NHM) focuses on strengthening primary to tertiary care, maternal and child health, and disease control programs.

Investments under the Ayushman Bharat Health Infrastructure Mission aim to improve healthcare infrastructure, pandemic preparedness, and establish integrated public health laboratories nationwide. Government spending now accounts for 48% of the total health expenditure, reflecting increased public commitment to accessible and affordable care.

Further government initiatives include expanding health insurance coverage, boosting medical education by adding 10,000 new medical seats in FY 2025-26, and digital health efforts under the Ayushman Bharat Digital Mission to unify health records and telemedicine services.

Overall, FY 2024-25 marks a pivotal year of growing government support combined with private sector innovation and infrastructure development that collectively reshape the healthcare and hospital landscape. Our company is strategically positioned to benefit from these developments by enhancing our healthcare delivery capabilities, expanding service offerings, and improving patient outcomes through sustainable growth and innovation.

OPPORTUNITIES AND THREATS

The healthcare and hospital industry offers significant opportunities driven by rising demand fueled by population growth, urbanization, and the increasing prevalence of lifestyle diseases such as diabetes and cardiovascular conditions. Medical tourism continues to grow as India establishes itself as a preferred destination for cost-effective, high-quality treatment, supported by favorable government initiatives. Additionally, increasing penetration of health insurance, both public and private, is enhancing access and affordability for a broader patient base, which in turn encourages hospitals to invest in state-of-the-art infrastructure and technology. The ongoing integration of advanced technologies including artificial intelligence, Internet of Things, and robotics is transforming diagnostics, patient monitoring, and care delivery, improving both clinical outcomes and operational efficiencies. Government policies and increased budgetary allocations further bolster the growth environment, with substantial efforts focused on healthcare infrastructure expansion, public-private partnerships, and digital health initiatives. Furthermore, market consolidation through mergers and acquisitions presents opportunities for scaling operations and expanding presence into untapped semi-urban and rural markets.

Despite these promising avenues, the industry also faces noteworthy challenges. The high costs associated with adopting advanced medical technologies can be prohibitive for smaller facilities, potentially creating disparities in access to modern care. A shortage of skilled healthcare professionals, especially in non-metro regions, constrains the ability to meet rising patient demand effectively. Cybersecurity risks have escalated, with the healthcare sector increasingly targeted by attacks that threaten patient data privacy and operational continuity, necessitating significant investments in robust security frameworks. The regulatory landscape remains complex and evolving, adding to compliance costs and operational risks, particularly for expanding hospital networks. Many smaller hospitals continue to navigate financial pressures in the post-pandemic environment, making them vulnerable to consolidation trends. Lastly, intensifying competition from well-established hospital chains, new entrants from diverse sectors, and healthcare technology firms places pressure on margins and necessitates continuous innovation to maintain market relevance.

Overall, while the healthcare and hospital sector is positioned for substantial growth supported by favorable demographics, technology, and government initiatives, careful management of operational and strategic risks is essential to capitalize fully on these opportunities and sustain long-term success.

OUTLOOK

The global economy in 2025 is facing a period of slower growth and increasing uncertainty. According to leading economic forecasts, global GDP growth is expected to moderate to around 2.3% to 3.0% in 2025 and remain subdued in 2026. This slowdown is driven by factors such as rising trade barriers, policy uncertainty, geopolitical tensions, and tighter financial conditions across many regions. Inflation, although projected to decline globally over the next two years, remains elevated in several economies due to persistent cost pressures. The outlook highlights risks including renewed protectionism, geopolitical conflicts, and fragile financial markets that could further impact growth negatively. Nevertheless, there are opportunities for recovery if global trade tensions ease and structural reforms are implemented, fostering greater stability and confidence in economic prospects.

In contrast, the Indian economy is forecasted to maintain robust growth despite the global headwinds. The International Monetary Fund (IMF) projects India to be the fastest-growing major economy with an estimated GDP growth rate of around 6.2% to 6.3% in 2025 and 2026, substantially outpacing global averages. This resilience stems from strong domestic demand, particularly in rural consumption, ongoing reforms to improve ease of doing business, and increasing investment in infrastructure and digital technologies. While India faces its own challenges, including inflation management and global trade uncertainties, its fundamental macroeconomic strength and demographic advantage provide a significant buffer and growth impetus. The Indian economys steady expansion reinforces its role as a key driver of global growth in the coming years.

The outlook for the Indian healthcare and hospital industry remains highly positive, aligned with the countrys economic growth and demographic trends. Rising incomes, greater health awareness, and expanding health insurance coverage are driving increased demand for quality healthcare services. Public health initiatives and government investment under schemes like Ayushman Bharat continue to expand access and infrastructure, particularly in underserved areas. The sector is witnessing accelerated adoption of digital health technologies, telemedicine, and data analytics to improve care delivery and operational efficiencies. At the same time, consolidation through mergers and partnerships is enhancing service capabilities and geographic reach. However, challenges like infrastructure gaps, workforce shortages, and regulatory complexity persist, requiring ongoing investments and policy support. Overall, the healthcare and hospital industry in India is positioned for sustained growth and innovation, supported by favorable economic conditions, technological advances, and government focus on universal healthcare access.

RISKS AND CONCERNS

The global healthcare industry in 2025 faces a complex array of risks that could impact operational stability and patient outcomes. Cybersecurity remains one of the most critical concerns, with healthcare organizations experiencing increasing frequency and sophistication of data breaches and ransomware attacks. These incidents not only compromise sensitive patient information but also disrupt care delivery, sometimes resulting in diverted patients and delayed treatments. The integration of advanced technologies such as artificial intelligence and telemedicine introduces additional vulnerabilities, including potential algorithmic errors, liability challenges, and privacy risks. Workforce shortages and clinician burnout compound these operational challenges, threatening quality of care and organizational resilience. Financial pressures persist as many smaller and rural healthcare facilities struggle with declining margins and viability, risking closures that could limit access to care. Additionally, regulatory changes and the rise of new competitors intensify the need for strategic agility and innovation in risk management.

In the Indian healthcare sector, similar challenges prevail alongside distinct local dynamics. Cybersecurity threats are escalating in India, necessitating significant investment in digital security frameworks to protect patient data and ensure uninterrupted healthcare services. The shortage of skilled healthcare professionals, including doctors, nurses, and technicians, remains a pressing concern, particularly in rural and semi-urban regions. This workforce crunch affects not only service capacity but also hampers adoption of emerging medical technologies. Financial strain is evident among smaller hospitals and standalone clinics, many of which are still recovering from the economic impacts of the COVID-19 pandemic and face difficulties in balancing cost pressures with quality care delivery. Regulatory compliance and evolving healthcare policies add layers of complexity for providers navigating expansion and operational strategies. Furthermore, infrastructure limitations and supply chain disruptions occasionally impact service availability and patient care standards. Addressing these multifaceted risks requires a proactive approach focused on technology adoption, workforce development, cybersecurity resilience, and robust financial planning to sustain growth and safeguard patient trust in a rapidly evolving healthcare landscape.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control system has been designed to commensurate with the nature of business and complexity of operations and is monitored by the management to provide reasonable assurance on the achievement of objectives, effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. The Company has institutionalized a robust process and internal control system commensurate with its size and operations.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATION PERFORMANCE

During the year under review, total earnings has been 2,598.54 Lakhs as compared to 2,708.95 Lakhs in the previous year. Profit of the Company after tax stood at 326.61 Lakhs as compared to profit of 235.78 Lakhs in the previous year.

HUMAN RESOURCE

The primary objective of any human resource management is to ensure the availability of competent and willing workforce to the organisation as well as to meet the needs, aspirations, values and dignity of individuals / employees and having due concern for the socio economic problems of the community and the country. During the year, your company focused on these objectives keeping mind the disastrous Covid Pandemic that has engulfed the entire world.

During the period under review, the company had 248 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