Abate As Industries Ltd Management Discussions

1. Industry Structure and Developments

The Indian healthcare sector continues to be one of the fastest-growing segments of the economy, driven by increasing healthcare awareness, rising disposable incomes, expanding insurance penetration, technological advancements, and supportive government initiatives. The sector encompasses hospitals, diagnostics, medical devices, pharmaceuticals, health insurance, and digital healthcare services.

The ophthalmology and eye-care segment is witnessing significant growth due to an ageing population, increasing prevalence of diabetes and other lifestyle-related disorders, greater awareness of preventive eye care, and growing demand for advanced vision correction procedures. Technological innovations such as AI-assisted diagnostics, teleophthalmology, digital patient management systems, and minimally invasive surgical procedures are transforming the delivery of eye- care services.

The Company remains well-positioned to capitalize on these industry trends through its expanding healthcare infrastructure, clinical excellence, and patient-centric approach.

2. Opportunities and Threats Opportunities

?€? Expansion into underserved domestic and international markets.

?€? Increasing healthcare expenditure by government and private sectors.

?€? Growing adoption of telemedicine and digital healthcare platforms.

?€? Rising demand for specialized and Single-specialty eye-care services.

?€? Strategic opportunities in healthcare education and allied healthcare training.

?€? Increasing demand for integrated healthcare solutions and preventive care services.

Threats

?€? Intensifying competition from established healthcare providers and new market entrants.

?€? Rapid technological changes requiring continuous capital investment.

?€? Challenges in attracting and retaining qualified healthcare professionals.

?€? Regulatory changes and evolving compliance requirements.

?€? Inflationary pressures and rising operating costs.

?€? Cybersecurity and data privacy risks associated with digital healthcare systems.

Additional Opportunities

?€? Expansion through acquisitions, strategic partnerships, and satellite eye-care centers.

?€? Growing aging population leading to increased demand for cataract, retina, glaucoma, and other ophthalmic services.

?€? Rising prevalence of diabetes and lifestyle diseases driving demand for specialized eye-care services.

?€? Increased penetration of health insurance and government healthcare schemes improving affordability and access.

?€? Growth opportunities through subsidiaries engaged in healthcare education, optometry training, and allied healthcare services.

?€? Development of international patient services and medical tourism.

?€? Cross-referral opportunities among group entities, hospitals, clinics, and educational institutions.

?€? Monetization of digital healthcare platforms, electronic health records, and tele-ophthalmology services.

?€? Opportunities for research collaborations, clinical studies, and academic partnerships through educational subsidiaries.

?€? Expansion into tier-II and tier-III cities where quality eye-care infrastructure remains limited.

?€? Increasing demand for skilled optometrists and allied healthcare professionals benefiting the educational segment.

Additional Threats

?€? Dependence on key consultants, surgeons, faculty members, and senior management personnel.

?€? Delays in obtaining regulatory approvals, accreditations, and renewals for hospitals and educational institutions.

?€? Adverse outcomes from medical negligence claims, litigation, or reputational risks.

?€? Changes in reimbursement policies, insurance coverage, and government healthcare schemes.

?€? Economic slowdown affecting discretionary healthcare spending and elective procedures.

?€? Foreign exchange fluctuations impacting imported medical equipment and technology costs.

?€? Operational disruptions arising from pandemics, public health emergencies, or natural disasters.

?€? Increased competition for qualified faculty and students in healthcare education subsidiaries.

?€? Risks associated with expansion projects, acquisitions, and integration of new facilities.

?€? Reputational risks arising from social media, patient reviews, or adverse publicity affecting the Group and its subsidiaries.

?€? Dependence on student enrolment levels and regulatory approvals for educational subsidiaries.

?€? Technology obsolescence and increasing costs of upgrading diagnostic and surgical equipment.

3. Segment-wise or Product-wise Performance

Abate AS Group of Companies primarily operates in the eye healthcare segment through its superspecialty hospitals and optical outlets. During Financial Year 2025-26, the Abate AS Group has witnessed robust growth in patient footfalls across its centres in Perinthalmanna, Chennai, and Kannur. The Groups healthcare business continued to perform steadily, operating three hospitals, conducting 9,147 procedures from 8,437 in the previous year increasing by 8.4%, and serving 1,434 international patients.

Perinthalmanna remained the Groups largest healthcare centre, accounting for approximately 73% of total procedures. Cataract surgeries constituted the highest procedure volume, contributing 55% of total procedures, followed by recurring retina injections at 32%. Retina surgeries, though representing 8% of procedures, generated the highest ARPS, reflecting the growing contribution of specialised, high- value treatments.

The diversified operations in Bahrain (through retail and wholesale), also delivered strong performance, contributing to both revenue and brand visibility. During the fourth quarter, consolidated revenue was impacted by the seasonal Ramadan effect on the Bahrain retail business. However, the healthcare segment remained resilient and unaffected by this seasonal trend. The Group continues to focus on expanding its healthcare business and improving capacity utilisation to support future growth.

4. Outlook

The outlook for the Company remains positive, supported by favourable industry fundamentals, increasing demand for quality healthcare services, and ongoing expansion initiatives.

The Company intends to continue investing in healthcare infrastructure, advanced medical technologies, digital healthcare solutions, and human capital development. Expansion plans across India and international markets are expected to strengthen the Companys market presence and enhance long-term value creation. The Company has already signed an agreement with Franchise India for the opening franchisees.

The Company will continue to focus on operational efficiency, patient satisfaction, clinical excellence, and sustainable growth while maintaining the highest standards of governance and compliance.

5. Risks and Concerns

The Company continuously evaluates and manages risks that may impact its operations and growth prospects, including:

?€? Availability and retention of skilled healthcare professionals.

?€? Regulatory and compliance risks across operating jurisdictions.

?€? Supply chain disruptions affecting medical equipment and consumables.

Copyright c Abate AS Industries Limited. All rights reserved.

?€? Cybersecurity and information technology risks.

?€? Project execution and expansion-related risks.

?€? Economic uncertainties and inflationary pressures.

?€? Changes in healthcare policies and reimbursement frameworks.

6. Internal Control Systems and Their Adequacy

The company has implemented robust internal control systems to safeguard assets, ensure regulatory compliance, and enhance operational efficiency. An independent Internal Auditor regularly assesses the effectiveness of these controls and reports to the Audit Committee. Policies and procedures are reviewed and updated to reflect evolving risks and regulatory requirements.

7. Financial Performance with respect to Operational Performance

During the year ended 31 March 2026, the Group continued to maintain stable operations across its constituent entities and reported consolidated total income of ^1,617.37 million, including revenue from operations of Rs1,594.09 million.

Sky International Trading WLL remained the largest contributor to the Groups performance, generating revenue from operations of Rs1,234.50 million and accounting for the majority of the Groups consolidated turnover. The entity continued to be the primary driver of business activity and revenue generation during the period.

Prudential Management & Services Private Limited reported revenue from operations of Rs309.50 million and demonstrated consistent operational performance, contributing meaningfully to the Groups consolidated results.

Salamath Import & Exports Pvt Ltd recorded revenue from operations of Rs60.38 million and maintained steady business operations during the reporting period.

Abate AS Industries Limited reported other income of Rs21.16 million.

Inter-company transactions amounting to Rs 10.30 million were eliminated upon consolidation to present the financial performance of the Group as a single economic entity in accordance with the applicable accounting standards.

Overall, the Groups performance during the period was supported by the strong revenue contribution from Sky, complemented by stable contributions from Prudential and Salamath, resulting in a robust consolidated income base.

8. Material Developments in Human Resources/ Industrial Relations

Human resources continue to be a key pillar of the Companys growth strategy. The Company remains committed to fostering a performance-driven and inclusive work culture.

During the year, various initiatives were undertaken in the areas of employee training, leadership development, digital onboarding, skill enhancement, and employee engagement. Industrial relations remained cordial throughout the year.

During this period, the Company employed personnel across healthcare, administration, operations, and support functions, contributing to the achievement of organizational objectives.

8. Environment, Health and Safety (EHS)

The Company is committed to maintaining high standards of environmental stewardship, occupational health, and workplace safety. The organization remains committed to minimizing its environmental impact through responsible resource utilization, energy conservation, waste management, pollution prevention, and adoption of sustainable practices. We continuously strive to promote environmental awareness and contribute to a greener and healthier future for the communities we serve.

Regular audits, risk assessments, employee training programs, and compliance reviews are conducted to ensure adherence to applicable environmental and safety regulations. The Company remains focused on providing a safe and healthy environment for patients, employees, visitors, and other stakeholders.

10. Future Prospects

The Company remains focused on the following strategic priorities:

?€? Healthcare Expansion: Expansion of eye-care and healthcare facilities across key domestic and international markets.

?€? Technology and Innovation: Adoption of advanced diagnostic technologies, digital healthcare platforms, artificial intelligence-based solutions, and improved patient management systems.

?€? Education and Skill Development: Development of healthcare education, training, and allied health programs to support future workforce requirements.

?€? International Growth: Strengthening the Companys presence in overseas markets through strategic expansion and partnerships.

?€? Sustainable Value Creation: Enhancing operational efficiency, profitability, and long-term shareholder value through disciplined growth and prudent capital allocation.

11. Ratio analysis:

Liquidity Ratio:

	Current Period	Previous Period
Ratio	(2025-2026)	(2024-2025)	% Variance
Current Ratio (times)	1.15	0.74	55.41%
Solvency Ratio:
	Current Period	Previous Period
Ratio	(2025-2026)	(2024-2025)	% Variance
Debt-equity ratio (times)	0.01	0.01	0.00%
Debt service coverage ratio (times)	0.98	0.34	184.25%
Profitability Ratio:
	Current Period	Previous Period
Ratio	(2025-2026)	(2024-2025)	% Variance
Net profit ratio (%)	0.73	0.56	30.64%
Return on equity ratio (%)	0.009	0.01	-5.88%
Return on capital employed (%)	0.009	0.003	183.59%
Return on investment (%)	NA	NA	NA

Utilisation Ratio:

Ratio	Current Period (2025-2026)	Previous Period (2024-2025)	% Variance
Inventory turnover ratio (times)		NA	-
T rade receivables turnover ratio (times)	1.22	1.84	-33.54%
Trade payables turnover ratio (times)	-	NA	-
Net capital turnover ratio (times)	-	NA	-

Notes on Financial Ratio: (Explanation for change in ratio more than 25%)

1. Current Ratio: The current ratio increased from 0.74 to 1.15 mainly due to growth in current assets, particularly contract receivables and cash balances.

2. Trade Receivables Turnover Ratio: The Trade Receivables Turnover Ratio decreased due to a substantial increase in average contract receivables during the period.

3. Net profit ratio: The ratio improved from 55.98% to 73.14% owing to a higher increase in net profit compared to the growth in revenue, reflecting improved operational performance and profitability during the period.

4. Return on capital employed: ROCE increased from 0.3% to 0.9% primarily due to a substantial rise in profit before interest and tax (PBIT), while capital employed remained largely stable during the period.

5. Debt Service Coverage Ratio (DSCR): DSCR improved from 0.34 to 0.98 as a result of higher EBITDA/profit generation during the period, enhancing the Companys ability to service its debt obligations.

12. Change in Return on Net Worth (RoNW)

There was a significant improvement in RoNW owing to equity expansion through preferential allotments, reflecting the Companys strengthened capital structure.

Current Period	Previous Period
(2025-2026)	(2024-2025)	% Variance
0.94%	0.67%	40.3%

The Return on Net Worth improved to 0.94% in FY2025-26 from 0.67% in FY2024-25, reflecting an improvement of 0.27 percentage points. The increase was primarily driven by higher profitability, with Profit After Tax increasing by approximately 185% during the year. The improvement in returns indicates better utilisation of shareholders funds, supported by the Companys growth and operational performance.

^ 13. Disclosure of Accounting Treatment:

The Company has prepared its financial statements in accordance with the applicable Indian Accounting Standards (Ind AS) and other accounting principles generally accepted in India. During the financial year, no accounting treatment different from that prescribed under the applicable Accounting Standards has been adopted. Accordingly, no disclosure is required in this regard.

14. Conclusion

The Company continues to pursue its long-term strategy of strengthening its healthcare platform through operational excellence, technological innovation, geographic expansion, and investment in human capital. Supported by strong industry fundamentals and a clear strategic vision, the Company remains committed to delivering quality healthcare services and creating sustainable value for all stakeholders.

15. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various factors including economic conditions, regulatory developments, market dynamics, competitive pressures, technological changes, and other risks beyond the Companys control.

The Company undertakes no obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

Date: 13-08-2026	By order of the Board of Directors
Place: Perinthalmanna	For Abate AS Industries Limited
	(Formerly Known as Trijal Industries Limited)
	Dr. Adv. A. Samsudeen
	(DIN: 01812828)
	Chairman & Non-Executive Director