Aspira Pathlab & Diagnostics Ltd Management Discussions

GLOBAL ECONOMY

In 2025, the global economy grew at a steady but moderate pace of around 3.4%1, supported by easing inflation, stable consumer demand and continued investment in technology and infrastructure. Growth has been pressured by rising geopolitical tensions, higher commodity prices and tighter financial conditions, with additional uncertainty from escalating conflicts. The situation has further intensified with restrictions on access to the Strait of Hormuz, a critical global oil shipping route, increasing risks to energy supply, trade flows and overall financial stability.

Global economic growth is expected to moderate slightly to 3.1%1 in 2026 and 3.2%1 in 2027. Inflation is projected to rise from 4.1%1 in 2025 to 4.4%1 in 2026, before gradually easing to 3.7%1 in 2027, according to the IMF. Emerging and developing economies, particularly those that rely on commodity imports, may face increased pressure due to higher energy prices, supply chain disruptions and ongoing global uncertainties. At the same time, risks such as geopolitical tensions, inflationary pressures and financial market volatility may continue to affect economic growth. However, continued investment in artificial intelligence and coordinated policy measures across economies helped maintain stability and encourage medium term growth.

The Indian economy is growing steadily, supported by strong domestic demand, continued infrastructure development, ongoing policy reforms and rising activity across manufacturing, services and the digital sector. Measures such as GST and income tax rationalisation have supported consumption, while monetary easing through rate cuts, liquidity support and targeted interventions has strengthened resilience amid global trade uncertainties and geopolitical tensions. Indias per capita income continued to rise steadily, reflecting improving economic activity and higher disposable incomes.

In early 2026, the Reserve Bank of India (RBI) maintained a stable policy stance, keeping the repo rate unchanged at 5.25%3 to manage inflation in a challenging global environment. According to the revised GDP series (Base Year 2022 23), real GDP growth rose to 7.6%2 in FY 2026, up from 7.1%2 in FY 2025, driven by steady private consumption, improving investment activity and sustained performance across key sectors.

Robust infrastructure development and an improving business environment are expected to create new market opportunities, while sustained demand and evolving consumer preferences are likely to support continued growth

despite external uncertainties and cost pressures. Reflecting these favourable dynamics, per capita income has been on an upward trajectory and is projected to rise from $2,6754 in 2025 to $3,0754 in 2027.

Indias external position has strengthened with recent trade developments, including an interim bilateral agreement with the United States & New Zealand and a Free Trade Agreement (FTA) with the European Union (EU) & UK, both expected to enhance market access, attract investments and strengthen global supply chain linkages. At the same time, Viksit Bharats economy continues to grow steadily, supported by strong domestic demand, infrastructure development and ongoingrefor ms across key sectors. Rising investment in healthcare, digital health and human development is further supporting long-term growth and productivity, while improved healthcare access and stronger public health systems are helping drive more inclusive and sustainable economic development. Key initiatives such as Ayushman Bharat, the National Health Mission (NHM) and digital health programmes are driving capacity expansion and proving accessibility, especially in underserved regions. These initiatives would further strengthen Indias human capital, stimulate investment and support longterm,inclusive economic growth.nIndian Diagnostic Industry

The Indian diagnostic industry is steadily evolving, supported by rising healthcare awareness, greater focus on preventive testing and improving access to services. The country is also witnessing a gradual demographic shift, with increasing life expectancy and a slowly ageing population. Despite this progress, the market remains highly fragmented, with over 3 lakh laboratories (estimated) across the country, most of which are standalone centres or Labs inside hospital and nursing homes. The estimates for the Indian diagnostic industry vary widely due to its fragmented nature; therefore, the analysis draws on multiple sources and internal assessments. Organised diagnostic chains account for about 15 20%5 of the market, indicating low consolidation, though their growing presence is helping improve standardisation, quality and operational efficiency. Government-led expansion of primary healthcare is expected to widen the testing base by bringing previously untested populations, especially in rural and semiurban

areas, into the formal diagnostic system. Over the past five years, the leading organised players representing a sample set that accounts for nearly 10 12%5 of the overall industry have strengthened performance, driven by higher patient volumes and a broader test mix. As per the CareEdge report, the total number of tests conducted across the sample set of leading organised players increased from 2145 million in FY 2021 to 4015 million in FY 2025, reflectingstrong growth in diagnostic volumes and increasing demand for healthcare and preventive testing services. Similarly, the number of patients served rose from 64 million in FY 2021t o 995 million in FY 2025. In

Indias diagnostic market, urban areas account for more than 70%5 of revenues, even though over 60%5 of the population lives in rural areas, highlighting a clear urban rural gap in access and adoption.

According to the IMARC Group, North and East India are expected to drive future diagnostic demand, supported by strong population growth, rising healthcare awareness and improving diagnostic penetration. North India leads with a highest share in 2025, driven by organised diagnostic chains and robust infrastructure in Delhi-NCR, along with large population bases across Uttar Pradesh, Punjab, Haryana and Rajasthan. Overall, these evolving demographic trends are reshaping healthcare demand, consumption patterns and long-term economic growth in India. The rising prevalence of lifestyle-related chronic diseases such as diabetes, cardiovascular conditions and cancer is driving the need for regular diagnostic monitoring, resulting in sustained demand. Government initiatives aimed at expanding healthcare access, including universal health coverage and the development of digital health infrastructure, are further improving accessibility and supporting the shift toward organised diagnostics.

The Indian diagnostic industry is expected to witness steady growth in FY2027, supported by rising awareness of preventive healthcare, increasing incidence of lifestyle diseases, an ageing population and Indias growing population base of over 1.46 billion6. Improving income levels, stronger payment capacity, expanding health insurance coverage and better access to healthcare services are expected to drive higher demand for quality diagnostic testing. While the industry remains fragmented, the sector is expected to sustain a medium-term growth rate of around 8 10%, driven primarily by increasing testing volumes and the gradual shift towards preventive and continuous healthcare management.

Continued adoption of digital technologies, AI and integrated health records is expected to improve operational efficiency, diagnostic accuracy and patient experience, while rising investor interest and merger and acquisition activity are likely to support consolidation within the organised segment. The North and East region remains a key strength for Dr. Lal

PathLabs, contributing approximately 77% of the business and offering significant long-term growth potential.

Increasing Prevalence of Chronic and Lifestyle-Related Diseases: The rising incidence of non-communicable diseases (NCDs) in India such as diabetes, cardiovascular disorders, cancer and respiratory conditions is driving growing demand for diagnostic services for early detection, monitoring an treatment. Factors like urbanisation, lifestyle changes and stress are contributing to chronic diseases, even amongst the younger populations. Diagnostic laboratories play a key role in screening, accurate diagnosis, treatment monitoring and preventive care. Additionally, Indias ageing population increases the need for regular diagnostic surveillance, creating opportunities for laboratories to expand specialised testing and chronic disease management solutions.

Expansion into Tier-2, Tier-3 and Rural Markets: A large share of Indias population resides in rural and semi-urban areas, while diagnostic revenues remain concentrated in major cities, reflecting a significant untapped opportunity. As healthcare awareness improves and access to medical services expands, demand for reliable diagnostic testing is steadily increasing in smaller towns. In response, organised diagnostic chains are strengthening their footprint across Tier-2, Tier-3 and Tier-4 markets through collection centres, partnerships and hub-and spoke models.

Rising Focus on Preventive Healthcare: Growing awareness of preventive healthcare is becoming a key driver of growth for the diagnostic industry. More individuals are proactively opting for regular health check-ups, wellness packages and early screening tests to monitor and manage lifestyle-related conditions. Revenue from bundled packages catering to the wellness and preventive services has grown strongly over the past four years, with annual growth exceeding 25%5 through FY 2025. Its contribution to total revenue has also increased significantly, rising from around 6 12%5 in FY 2021 to nearly 12 25%5 in FY 2025. Growing awareness of preventive healthcare, along with the launch of specialised packages, is expected to make this segment an important driver of future growth. This shift toward preventive and proactive healthcare, further supported by corporate wellness initiatives and digital health platforms, is driving increased demand for diagnostic services, particularly across urban and semi-urban markets.

Supportive Government Initiatives: Government-led healthcare initiatives and increased public spending are improving access to medical services and supporting growth in Indias diagnostic and personal care sectors. Programmes aimed at strengthening healthcare infrastructure, expanding coverage and improving service delivery, along with digital health and teleconsultation initiatives, are making healthcare more accessible and efficient.

A robust care ecosystem for geriatric (elderly care) and allied services will be developed, with National Skills Qualifications Framework (NSQF) aligned training to upskill multiskilled caregivers in areas such as wellness, yoga and medical devices, targeting 1.5 lakh7 caregivers in FY 2027. The Union Budget for FY 2027 further supports this momentum with higher allocations to healthcare, increased focus on medical education, research and digital health and continued emphasis on preventive care. These developments, coupled with rising health awareness, are expected to drive greater demand for diagnostic services and personal care products, supported by a growing focus on wellness, hygiene and overall well-being.

Genomics Driving Precision Oncology: Genomic testing is emerging as a key growth driver for the Indian diagnostic

industry. By analysing DNA to identify genetic mutations, it supports accurate disease diagnosis, cancer treatment planning, prediction of drug response, prenatal screening and better-informed preventive care. Leading diagnostic players are increasingly investing in this space, developing advanced laboratories and technology platforms to deliver faster and more precise results.

Digitalisation and Technology Adoption: Technology adoption is reshaping the diagnostic industry by making services faster,more efficient and patient-friendly. The growing use of digital platforms, artificial intelligence and automation is streamliningl aboratory operations and reducing turnaround times, while home sample collection services are im proving accessibility and convenience for patients. Continued investments in advanced technologies and the development of specialized laboratories are expected to further accelerate growth in this segment and strengthen the overall diagnostic ecosystem

Untapped Potential in Health Coverage: Indias health insurance ecosystem continued to expand in FY25, supported by wider coverage under government schemes such as Ayushman Bharat PM-JAY and steady growth in private health insurance adoption. The inclusion of additional beneficiaries, particularly senior citizens, coupled with rising health awareness and increasing healthcare spending, is improving access to medica services across the country. For the diagnostics industry, expanding insurance coverage is expected to support higher utilisation of preventive healthcare, screening programmes and diagnostic testing, while the still-low penetration of health insurance presents a significant long-term growth opportunity.

Shift Toward Outpatient and Home-Based Diagnostics: The increasing global demand for onvenient, affordable and faster healthcare services is driving growth in the outpatient care market. As a result, the market is projected to expand from USD 448 billion in 2025 to USD 678 billion by 2035, driven by rising demand for accessible and efficient healthcare solutions. In India, the home diagnostic testing market is also expanding, valued at USD 2239 million in 2025 and expected to reach USD 3339 million by 2034, with a 5%9 CAGR. For the diagnostics industry, this trend is creating strong growth opportunities by increasing demand for outpatient and home-based testing, improving patient access and supporting the sectors expansion into decentralised, patient-centric care models. Increase in Life Expectancy: Indias rapidly expanding population aged 60 and above is expected to increase from 1010 crore in 2011 to 2310 crore by 2036, with their share in the total population rising from 9%10 to 15%10, according to the National Commission on Population. This growing elderly population is expected to significantly drive demand for diagnostic services nationwide. The higher prevalence of age-related and chronic conditions, such as cardiovascular diseases and rheumatoid arthritis, increases the need for regular testing, disease monitoring and preventive health screenings. This demographic shift is creating a sustained growth opportunity for the diagnostics industry, driven by rising patient volumes, greater adoption of specialised tests and increased utilisation of advanced diagnostic technologies. Growth in Advanced and Specialised Testing: Demand for advanced diagnostic services, including genomics, molecular diagnostics, oncology testing and specialised pathology, is growing rapidly. These high-value segments are creating greater growth opportunities for organised players while also contributing to improved operational efficiency and stronger overall performance. Expanding Health Insurance Coverage: Increasing health insurance penetration, supported by private insurers and government-backed schemes, is improving access to diagnostic services across India. Reduced out-of-pocket expenditure is encouraging greater adoption of preventive healthcare and diagnostic testing. Despite ongoing progress, insurance penetration remains relatively low, presenting significant growth potential and creating a long-term demand driver for the diagnostics industry. Industry Consolidation and Organised Sector Growth: Indias diagnostics sector is undergoing steady consolidation, with organised, technology-driven players gaining market share as demand for quality, standardised services rise. Patients are increasingly shifting towards reliable, accurate clinical diagnostics, accelerating this transition away from fragmented, unorganised providers. Backed by investments in digital capabilities, network expansion and enhanced testing infrastructure, these players are well-positioned to benefit from this ongoing shift.

International Expansion Opportunity for Indian Diagnostics: Indian diagnostic companies are well-positioned to expand internationally, leveraging their expertise in cost-efficient, high-volume testing and strong quality standards. Significant opportunities exist in underpenetrated markets across Asia, Africa and part of Middle East, where organised diagnostics infrastructure is still evolving. Their calable operating models, competitive pricing and growing digital capabilities such as telemedicine and remote reporting - enable efficient market entry and operations. Supported by rising global demand for preventive healthcare and early disease detection, as well as strategic partnerships in new geographies, Indian players have a strong opportunity to build a global presence and drive sustainable, long-term growth.

Intense Competition: The Indian diagnostics industry faces rising competitive intensity from organised laboratories, unorganised regional players, online platforms and digital health aggregators. Aggressive pricing strategies, discounted packages and bundled offerings from new entrants are exerting downward pressure on prices and reducing realisations in routine diagnostics. In addition, the entry of pharma companies, hospital chains and corporate healthcare players into the diagnostics space is further intensifying competition and increasing market fragmentation. Regulatory Changes: The diagnostic industry operates under a more stringent regulatory nvironment, requiring laboratories to strengthen their quality systems, documentation and compliance processes. While evolving regulations supported better patient safety and service standards, they also increased compliance costs and operational responsibilities for diagnostic service providers. Increasing point-of-care testing (POCT): The diagnostic industry is seeing the gradual entry of new players introducing Point-of-Care Testing (POCT) technology across clinics, pharmacies and home-care settings. However, adoption remains in its early stages, with limited traction so far, as central laboratories continue to dominate routine and specialized diagnostic testing and remain the preferred channel in the broader market.

Aspira Pathlab & Diagnostics Limited ("ASDL"/"The Company") is a leading pathology specialist, with Pan-India presence. ASDL is one of the leading players in the diagnostics space, with footprint in both B2B and B2C marketplace. The Company offers best-in-class pathology and diagnostic services to individual patients, hospitals, other healthcare providers, and businesses. The Company, with a wider presence in Maharashtra India, enjoys a loyal customer base, that reflects on its strength as a brand, providing superior diagnostic testing and services. Each year, it reaches a new milestone, touching the lives of numerous patients and healthcare professionals by offering actionable health insights. ASDL ideology is founded on technological supremacy, patient centric approach, and dependable diagnostic results. It performs diagnosis and test like Covid-19, urine, stool, X-ray, Ultra sound sonography, Blood test etc with highly developed and advanced equipment. ASDL ideology is founded on technological supremacy, patient centric approach, and dependable diagnostic results.

The Company strategizes to focus on wellness, technology, footprint expansion, while increasing efficiency and productivity. It is also integrating sustainability across the value chain to offer long-term value creation for all its stakeholders. The Company envisages these strategies to unlock growth on new frontiers and drive expansion with the same spirit.

Aspira is focused on establishing itself as a strong regional player before scaling up its operations. Although we follow an asset light model, other costs are significantly high. Most of these cost is front ended and the payback period is high. We are therefore working on building the right systems and aggressively optimize the cost. We are adopting new technologies that would improve customer experience. Some of these are use of Chatbot, improving website, implementing patient engagement platform, Customer Service, etc.

Also concentrating more on HLM, trying to expand area by targeting newly setup hospitals and laboratory and trying to achieve more technology and advancement.

Notes: a) Decrease on account of decrease in current asset and increase in current liability as compared with the previous year. b) Decrease on account of decrease in profit as compared with the previous year. c) Decrease on account of decrease in profit as compared with the previous year. d) Increase on account of decrease in trade receivables during the year as compared with the previous year. e) Increase on account of increase in sales during the year as compared with the previous year. f) Decreased on account of decrease in profit during the year as compared with the profit made during the previous year. g) Decreased on account of decrease in profit during the year as compared with the profit made during the previous year.

Aspira is a new age lab. Human resources are the key to performance. As of March 31, 2026, the company has 168 employees on its payrolls. The focus during the year has been around enhancing the productivity of the workforce and increasing the team. The growth in business was achieved with marginal increase in workforce strength. The Company strongly believes that its competitive advantage draws strength from its highly skilled workforce. Through a range of development activities, the Company helps its employees nurture their professional skills and leadership abilities, thus charting a clear career path. The automation in HR has significantly improved employee experience, which, in turn, has increased productivity. The vision of the Companys senior leadership guides and shapes the future of ASDL. The Company will continue to invest in the talent of its employees to achieve its business goals and fuel expansion.

Digital strategy plays an important role in customer engagement. The Company focuses on enhancing its IT and automation across value chain to create a digital ecosystem for all its stakeholders. The ASDL has launched app named Aspira Health for all its patients, with easy access to download reports, book tests and find nearest diagnostic centers. Further for those patients whose email address is not registered test reports are sent to them on WhatsApp. ASDL also provide home visit facility for blood sample collection. The Company maintains a robust IT and digital infrastructure to stay ahead of competition and deliver an outstanding performance.

Statement in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand and supply conditions, finished goods prices, input materials availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events or otherwise.