aster dm healthcare ltd share price Management discussions

Global economy

The year 2020 left an indelible mark on our minds as the world witnessed the novel Coronavirus (Covid-19) which wreaked havoc across every sphere of human life. Battling the effects of Covid-19 across economies, the global economy entered 2022 at a much weaker position as the new Omicron variant of the Covid-19 virus continued to spread rapidly across countries. This resulted in the reimposition of mobility restrictions by the affected countries leading to a decline in economic activities across the globe.

Further, the global economy remained stressed as the Russia-Ukraine face-off continues to roil the financial markets. According to UN chief Antonio Guterre, the conflict has the potential to resonate far beyond Russia and Ukraine, triggering a disruption in the global food supply chains, resulting in hunger and suffering apart from the death and destruction within the Ukrainian borders.


In 2021, steady deployment of vaccination programmes across economies and relaxation of pandemic-related lockdowns in many countries helped boost demand. Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023, its strongest post-recession pace in 80 years. However, the resurgence of the pandemic driven by the rapid spread of the Omicron variant and Russia?s invasion of Ukraine carries enormous risks for a world economy that?s yet to fully recover from the pandemic. The effects left the global economy with two key points of vulnerability — very high inflation and jittery financial markets. Aftershocks from the politically volatile situation could easily worsen both. Further, according to economists in most countries, excess demand is driven mostly by constrained supply, not strong demand, resulting in the dominance of cost-push inflation. Such an inflation figure squeezes profit margins, erodes actual household income and tends to self-correct when demand is weak. In addition to this, rising crude oil prices, an ongoing economic impact of the war, are likely to have a significant toll on the oil-importing nations. Further, the recently imposed sanctions on Russia are expected to have a substantial impact on the global economy and financial markets, with significant spill-overs on to other countries.

GCC Economy

Recovery of the Gulf Cooperation Council (GCC) economies has been notable in the second half of 2021, as travel restrictions eased, tourism rebounded and domestic demand strengthened. Further impetus is expected to be provided by the rising oil prices and the expansion of their non-oil sector amongst the GCC nations. Swift and well-coordinated policy measures helped limit the initial spread of the virus, delivered rapid and widespread access to vaccines, and targeted income and liquidity support to those in need. Despite experiencing successive waves of the virus, infection rates across the GCC declined sustainably to well below previous peaks and the number of fatalities subsided considerably over time.

Prudent fiscal measures and a range of macro-financial support measures provided relief to hard hit sectors, businesses, and financial systems. This also helped the economies stage a strong recovery. The GCC economies are estimated to have grown by 5.9% overall in 2022, with this recovery likely to endure for the next few years owing to the hydrocarbon and non-hydrocarbon sectors.1

GCC economy outlook

Notwithstanding, the relatively tight fiscal policy and some external headwinds, experts expect the GCC economies to see faster growth in 2022 compared to 2021, as they continue to build on the commendable progress made in 2021. GCC?s regional PMI surveys strongly indicate acceleration in non-oil sector growth in the UAE, Saudi Arabia and Qatar. The OPEC?s agreement to gradually escalate oil production from July?21 contributed to a recovery in the oil and gas sectors as well.

The recent increase in oil prices, as well as austerity measures, are expected to help sovereign balance sheets. Inflation, on the other hand, might be a roadblock since it increases the danger of capital flows reversing, driving sovereign spreads higher and constraining public finance.

While the outlook for FY 2023 remains broadly constructive, there is still a high degree of uncertainty, especially regarding how the pandemic will evolve. A increase in new infections across G-20 economies serves as a reminder that the novel and more detrimental variants continues to pose a risk to the outlook for the world economy, even though the overall virus-related concerns have subsided as Covid infections become less lethal.

Travel restrictions however, are no longer in effect for vaccinated individuals in most countries. Another potential risk to the outlook for 2022 relates to the withdrawal of the exceptional stimulus injected into the global economy in 2020, which combined with increasing US Federal interest rates could likely lead to heightened volatility in the financial markets and provide a further headwind to growth in the GCC in the form of higher borrowing costs and a stronger US dollar.

Indian Economy

The last couple of years have been difficult for the world on account of the regular Covid-19 waves, and India was no exception. The repeated Covid waves, supply chain disruptions and, more recently, inflation have proved to be challenging for the Indian policymakers. However, with a proactive Government at the helm, the policymakers undertook key decisive measures and introduced a bouquet of safety nets to cushion the impact on the vulnerable sections of society and the business sector. Further, the Government showcased consistent agility through different economic development measures, such as a significant increase in capital expenditure on infrastructure to build back medium-term demand, and aggressively implemented supply-side measures to prepare the economy for a sustained long-term expansion. The Indian economy grew by 8.7% in FY 2021-22 after contracting Covid-19 in FY 2020-21 implying that overall economic activity has recovered past the pre-pandemic levels. Further, the growth of the economy was driven by strong exports, thanks to the global economic recovery, and domestic private investment as businesses ramped up production to meet festive demand. Investments also maintained a steady pace of growth in the last two quarters of FY22 after declining for over a year, which indicates that the capital expenditure cycle is starting to gain traction.

Consumption demand, which has been a concern as the pandemic dented consumer finances and confidence, grew by 8.6% (YoY) – an enormous boost for the Indian economy.2 However, consumer spending lagged substantially from the pre-Covid levels, suggesting that uncertainties are still weighing on consumers-confidence and the ability to spend.


According to the International Monetary Fund, Indias prospects for FY 2023 are marked up on expected improvements to credit growth and, subsequently, investment and consumption, building on better-than-anticipated performance of the financial sector. However, long-term conflict in Europe might result in shortages of semiconductors, food, and automobiles. For FY 2023, a median GDP growth projection of 7.5% and an inflation forecast of 5.5% are reported.3 Inflation, on the other hand, is expected to last longer due to rising production costs combined with the expansion of contact-intensive services and the resulting increase in service prices. Furthermore, rising import bills, fertiliser, food, and energy costs may cause a dent in consumer pockets. The Government may absorb the increase in gasoline and food costs at first to assist stimulate economic activity and demand growth, albeit slowly.

Industry overview

Global healthcare industry – Resilience is Key

The year FY 2021 witnessed the global communities struggling to contain the spread of the Covid-19 virus and managing the health and human costs of the pandemic. However, post the first wave, Governments across economies implemented a wide range of crisis response policies to mitigate the worst social and economic effects of the pandemic.

It also proved to be a tough year for the healthcare industry, as two subsequent waves of the pandemic continued to wreak havoc. But the healthcare industry responded with astonishing speed and showcased amazing resilience to withstand the challenges thrown by the pandemic, coming out with flying colours. We witnessed the global healthcare industry transforming itself from crisis management to perform recovery and reform management. Practically overnight, key players of the global healthcare industry, such as clinicians, healthcare providers, pharmaceutical companies and payers, shifted much of their work on to virtual platforms and other digital technologies. As communities continued to grapple with the deadly new variant, healthcare service providers embraced virtual technology in unprecedented numbers so they could continue to serve patients despite restrictions on in-person interactions. In doing so, they packed a decade?s worth of reforms and innovations in terms of global cooperation for research & distribution, and the latest mRNA technology into a few short months.

It would be remiss not to mention the role played by the frontline workers like nurses, paramedics, doctors and clinicians in fighting the pandemic thereby saving countless lives. We owe a debt of gratitude to our healthcare and aged-care workers and leaders for their commitment and sacrifice.

The industry witnessed Covid treatment delivery being entirely borne by the nation?s Government, and nearly all governments have or are expected to spend a large part of their budget on public health and health policies. This trend is likely to continue as economies continue to adapt to the new normal.

Although global healthcare spending is expected to increase in the years ahead the pandemic has shifted the dynamics of public healthcare. The scope and persistence of this global crisis have exposed vulnerabilities in many nations? public health systems and impacted their ability to effectively detect and respond to the continually shifting emergency in a multidimensional way that could have mitigated its impact. Healthcare delivery mechanisms have been put under intense pressure and scrutiny during the pandemic period, as healthcare systems around the world struggled to keep up with the skyrocketing patient numbers, employee burnout rates and workforce shortage, supply chain disruptions and equipment scarcities, in addition to insufficient and/or outdated facilities. But the pandemic has helped awaken the different stakeholders like the Government, private players and consumers, in terms of understanding the importance of a holistic healthcare system. It has ignited the growing recognition of the need to invest in population health, because it has been proved that a nation or an industry can only be as strong as its population.


Today, the global healthcare industry is at the cusp of a major transformation, as nations and private industry players aim to transform the system by adopting disruptive technologies. In the years before the pandemic, and in the months since Covid-19 altered the course of the healthcare industry, a series of transformations have been altering traditional paradigms. The industry will continue to do so in the coming years. These include a heightened focus on well-being and prevention, the push to develop cures besides treatments, outcome-based care rather than fee-for-service, fresh developments in gene therapy and precision medicine, cross-industry convergence, and an end-to-end focus on patient and clinician experience.

Despite the pandemic?s many devastating effects, it has presented the global healthcare sector with a powerful opportunity to accelerate innovation and reinvent itself. It has helped accelerate numerous existing and/or emerging healthcare trends; among them, shifting consumer preferences and behaviour, integrating life sciences and healthcare, rapidly evolving digital health technologies, new talent and care delivery models, and clinical innovation. Numerous public health systems are reinventing themselves in the wake of the pandemic, and digital technologies – from targeted applications to an entire gamut of digital healthcare services, are expected to play an important role in their transformations.

GCC healthcare industry – The New Sunrise Sector

With declining energy prices, in recent times, the GCC countries have been under pressure to diversify the economy. Through the troubled economic times and during the pandemic, spending on healthcare has continued to grow, showcasing the importance of the healthcare industry. Amidst an ageing and expanding population and the increasing prevalence of lifestyle diseases, the healthcare sector is fast emerging as a priority industry for the GCC countries as they work to diversify their economies away from a reliance on oil production. The GCC economies continue to reform their healthcare systems and shift towards improving quality, efficiency, and cost. Governments are shifting away from investing in and operating healthcare facilities and more towards regulating and making policies as the healthcare sector became even more crucial following the pandemic. There is an increase in participation by private players and the industry expects renewed investments in the healthcare industry to move it to new levels. The UAE boasts one of the best healthcare systems in the world, which is a big lure for expats considering relocating there. Health insurance is essential for expatriates living in Abu Dhabi and Dubai. Employers and sponsors are responsible for providing health insurance to expats and their dependents. One spouse and three children under the age of 18 are covered.

The number of institutions and healthcare experts has grown in the recent decade. To meet demand, the number of medical experts employed in the business has quadrupled in certain situations. The United Arab Emirates has become a popular destination for Medical Tourism.

The inpatient market would remain the largest segment, with a contribution of 43.4% in the fiscal year . More and more home-based medical technologies are being utilised, including remote monitoring through mobile health applications and home-based diagnostics, to free up beds for more advanced cases as the number of elderly patients in the GCC healthcare market increases.5 The expanding and ageing population, high prevalence of non-communicable diseases NCDs such as obesity and diabetes, rising cost of treatment and increasing penetration of health insurance are some of the key factors that are likely to drive the demand for better healthcare service in the region.

Healthcare services account for a lion?s share of the healthcare industry in the GCC countries. As per the IMARC group estimates, the GCC drug market is expected to increase at a CAGR of 14.2% between 2021 and 2026. At 79% it is the fastest growing segment in the UAE.6 On the other hand, the smallest segment, medical devices, is witnessing double-digit growth in Oman, Qatar and Kuwait.

The country-wise review is discussed below.

The United Arab Emirates (UAE)

As one of the most economically-developed and diversified markets amongst the GCC nations, the UAE has been successful in developing a strong healthcare infrastructure. The UAE?s world class healthcare infrastructure has advanced and expanded significantly during the past few years.

With a steady rise in the number of hospitals over the last few years, the healthcare has successfully met both the evolving needs of the population and the nation?s ambition to become a regional medical tourism hub. Ranked amongst one of the top nations across the world, and the highest amongst the GCC nations, the UAE has been successful in managing the challenges thrown by the Covid-19 pandemic. Considered one of the key pillars of the national agenda, the UAE Government has repeatedly showcased its inclination towards providing world class healthcare to its citizens and residents. Furthermore, given its strategic location and its importance as a trade and business hub, UAE is soon to be a centre for medical tourism. In line with this tenant, the Government, along with healthcare authorities of the country plans accreditation for all public and private hospitals based on national and international standards. The Government is committed to make the UAE?s healthcare a priority sector and one of the preferred healthcare locations. Nearly 52% of healthcare costs in the UAE are covered by the government, with the remaining costs being covered by the private sector.7 Further, it also plans to increase spending on the health sector to utilise greater data monitoring tools for pre-emptive contact tracing of communicable diseases and to allow licences for virtual medical service providers. The Government also plans to build national capacities to fight future pandemics, which include efforts to develop vaccines and medicines, digital immunisation IDs, and a new strategy focusing on supply chains. The UAE?s Ministry of Health aims to develop the sector by focusing more on Health IT, including tele-medicine and digital medicine. Initiatives like Mabrouk Ma Yak which is an integrated e-service for newborn Emaratis are exemplary of the said digitization of health sector. Advanced sequencing and tracking of drugs from its production to usage is achieved through the Government?s ‘Tatmeen? initiative.

Saudi Arabia

Accounting for nearly 60% of the GCC countries? healthcare expenditure, healthcare is one of the key focus areas of the ambitious SaudiVision2030.AspartoftheNationalTransformationProgramme (NTP) 2020, the Government seeks to improve healthcare services and facilities across Saudi Arabia. In 2022, it spent around $36.8 bn on healthcare and social development – 14.4% of its 2022 budget and the third-largest line item after Education and the Military.8 With a population growth forecasted to grow from 34.3 mn in 2019 to 39.4mn in 2030 and 45mn by 2050, the kingdom plans to invest SAR 250bn on healthcare infrastructure by 2030 and to increase private sector contributions from the current 40% to 65% by 2030.9


Qatar?s healthcare system has undergone a momentous journey of transformation in recent decades. The growth of investment in new healthcare facilities, services and technologies has transformed the health infrastructure in the country, to meet the health needs of the nation?s fast-growing population. Key priority areas for the Government include an integrated model of high-quality care and service delivery, enhanced health promotion and disease prevention, enhanced health protection and an effective system of governance and leadership.


With over 70 quality hospitals, with over 6,400 beds, Oman?s healthcare industry today offers a range of specialised and general patient care services across the country. In fact, the country?s healthcare sector has witnessed commendable growth over the last few decades. While the Government has a strong presence in the sector, making available advanced health solutions and patient care services to people, it has encouraged private healthcare providers? efforts in transforming Oman into a regional healthcare hub. Today, over 80% of the Government?s total health expenditure is borne by the Ministry of Health, and the budgetary allocation for the sector stands at RO1.3 bn. The healthcare sector is poised to witness exciting developments, which include mega health projects like the US$1.5 bn Sultan Qaboos Medical City (SQMC) in Muscat consisting of five hospitals and other medical facilities; the US$1bn integrated medical tourism project in Salalah called the International Medical City (IMC) comprising a 530-bed tertiary specialty care hospital, a research and development (R&D) complex, organ transplant centres, and a healthcare resort. The other projects in the pipeline include the RO 72 mn integrated healthcare complex to come up in Seeb, which will have a 225-bed tertiary care hospital, 120-key three-star hotel apartments, and 300 residential apartments among others.10


Kuwait?s healthcare sector has been nurtured for many decades by the Government through the Ministry of Health (MOH) and the Ministry of Defence and Petroleum Company. Though not at the top in global rankings, the country?s healthcare sector has reached a fair degree of maturity be it in the number of beds installed, the number of physicians, dentists or nurses available. The country compares favourably with its GCC peers on many counts. In the period 2013-2019, Kuwait recorded the third largest total healthcare expenditure across the GCC region after the UAE and Qatar and demand for healthcare is expected to rise significantly in the near term.11 Kuwait?s evolving healthcare industry is characterised by a large public sector infrastructure. Despite its immense prospects, the sector here is grossly underdeveloped especially in knowledge and technical capabilities. Due to the current lack of adequate local medical technology and facilities, cases of overseas treatment for Kuwaiti patients has been increasing steadily over the years.


Healthcare in Bahrain is expanding rapidly with a focus on developing centres of medical excellence. Bahrain has the lowest density of health workers per capita in the GCC, suggesting significant room for expansion. Hospitals in Bahrain may have the lowest density, but Bahrain medical centres are primed for expansion with an excellent workforce. With a rising market and an efficient workforce, it is a good time for healthcare investment opportunities like research facilities and hospitals in Bahrain.

The Government launched Bahrain?s Economic Vision for 2030, under which it aims to ensure that all Bahraini nationals and residents have access to quality healthcare. The aim is to project Bahrain as a leading centre for modern medicine, offering high-quality and financially sustainable healthcare in the region and for patients to have the choice of public and private providers that meet international healthcare standards.12

Growth opportunities in the GCC healthcare industry

Medical tourism: The UAE is one of the fastest-growing medical tourism hubs globally. Medical tourism is an integral part of the economic diversification plans of the GCC countries and, subsequently, has been receiving stimulus from Governments. With improving infrastructure and quality of services, the region will not only experience a rise in medical tourists but is also likely to witness a drop in outbound medical tourism.

Specialised services: Whilst there is a clear growth in the development of non-specialised healthcare infrastructure, market dynamics across the entire GCC region point towards a significant opportunity for primary healthcare facilities, specialised surgeries, tertiary care hospitals and highly specialised clinics to treat chronic ailments, and cancer among others. Besides, growth is also envisaged in specialised outpatient facilities such as diabetes treatment clinics, wellness centres and aesthetic procedures.

Oncology: Over the last decade, the region has witnessed a steady increase in cancer cases linked to the steady ageing of populations. In Saudi Arabia, 70% of the population is over 40 years of age. It is estimated that fresh cases of common cancers are likely to increase to ~ 152,000 by 2025 in Saudi Arabia, with ~ 30,700 annual deaths by 2025.13 This points towards an obvious need for additional provision of specialised oncology services. It opens up a significant opportunity for cancer treatment services in all GCC countries, and, notably, the UAE is likely to become the regional hub for robotic surgery and cancer therapies by 2030.

Technology-based patient care: Investments in modern healthcare technologies such as digital health systems, personalised virtual treatment solutions, use of robotics, artificial intelligence, big data analytics and automation are projected to grow multi-fold in the upcoming decade. Investments to strengthen long-term care, home care, and palliative care will be imperative for the successful management of the healthcare needs of the elderly by 2055, with a notable shortage of such facilities in Saudi Arabia and Oman. Greater use of technology is likely to pave the way for world class medical infrastructure in the region.

Country-wise investment opportunities – Health First!


The UAE - Becoming self-reliant

The UAE is expected to move towards greater self-reliance on domestically manufactured pharmaceuticals. The nation imports products from about 72 countries, but ten countries account for 80% of the supply. The UAE is also the first country to develop an effective fast-track system for the registration of innovative drugs, allowing both patients and those from neighbouring countries seeking treatment to gain faster access to ‘innovator drugs? inside the country.14

Saudi Arabia –Building infrastructure

Healthcare is one of the foremost focus areas of the ambitious Saudi Vision 2030 and National Transformation Programme (NTP) 2020, which seeks to improve healthcare services and facilities across the Kingdom of Saudi Arabia. With a likely population growth from 34.3 Mn in 2019 to 39.4 Mn in 2030 and 45 mn by 2050, the kingdom plans to invest SR 250bn on healthcare infrastructure by 2030 and aims to increase private sector contributions from the current 40% to 65% by 2030. An estimated 40 to 50% of this investment is likely to be on infrastructure until 2025 and on digital solutions and medical consumables and implants beyond 2025. Saudi Arabia is also poised to become a regional hub for medical consumables by 2023.15

Bahrain - Transforming digitally

Bahrain has been investing heavily in the digital transformation of healthcare services and delivery – with its nationwide drive towards healthcare digitalisation likely to reach its peak within the next two to three years, attracting investments of around US$0.5 - US$0.6bn by 2025. Robotic surgery offers investors untapped growth potential and is expected to become a US$0.3 bn market by 2025. Additionally, the medical devices, medical imaging, IVD, and digital health market in Bahrain, is worth an estimated US$0.8 bn in 2019 and is expected to grow at an annual growth rate of less than 6%.16 Value-added products, rather than domestic manufacturing, will create growth opportunities over the next five years and, as the Government focuses on elder care, the adoption of related homecare products and solutions is likely to increase by 2025.

Kuwait –Developing infrastructure

The Kuwait Vision 2035 is likely to boost investments in infrastructure development and upgrades. The public health system of Kuwait has showcased tremendous opportunities in generics, which are forecasted to account for 60% of pharmaceutical market revenues, with domestic manufacturers capturing ~20% of that revenue.17 Domestic manufacturing of pharmaceuticals is also likely to gain momentum, increasing its contribution from current levels of 15% to 35% of the market by 2030.

Qatar – Looking at new hospitals

The industry expects medical tourism to gain prominence in Qatar and be a focal point for the Government?s strategy to diversify the economy away from oil. Further, it is presumed that the private sector will play a bigger role in healthcare infrastructure and delivery in the future in Qatar, assuming a growing portion of the country?s healthcare burden in the process. The establishment of new facilities will continue with several new hospitals and clinics under construction to meet the growing demand for specialised services in the country. This is in line with the Ministry of Public Health?s determined long-term target of reaching 5,700 hospital beds by 2033.

Indian healthcare industry – Rising up to challenges

Having proved its prowess to the world during the challenging times of the pandemic by supplying Covid vaccines, the Indian healthcare industry is looking to build on the experience of the last two years, strengthen the partnership with the Government and sustain the growth momentum in years ahead. The onset of the pandemic was a breakthrough moment for the healthcare sector. It showcased the dire need to dig beneath the surface to identify gaps of accessibility, affordability and acceptability of healthcare resources.

The Indian healthcare ecosystem comprises hospitals, medical devices, clinical trials, outsourcing, tele-medicine, medical tourism, health insurance, and medical equipment. Over the last couple of years, the healthcare industry has showcased tremendous growth overcoming the challenges thrown by the pandemic, owing to its strengthening coverage, services and increasing expenditure by public as well as private players. Backed by these positives, industry experts expect the Indian healthcare industry to expand at a CAGR of ~29.79% during the 2021 - 2026 period to reach H 81.30 trillion by 2026.18 Growing instances of lifestyle diseases, rising demand for affordable healthcare delivery systems because of the increasing healthcare costs, technological advancements, the emergence of tele-medicine, rapid health insurance penetration and Government initiatives like e-health, together with tax benefits and incentives, are likely to drive the growth of the Indian healthcare market.

Major Government Initiatives - FY22 – The Health Highway!

- As part of the Government?s ‘Digital India? initiative, establishment of 636 e-Hospitals across India.

- In September 2021, the honourable Prime Minister of India, Mr. Narendra Modi launched the Ayushman Bharat Digital Mission. Under this the Government aims to connect the digital health solutions of hospitals across the country with each other with an aim of creating a seamless online platform that would enable interoperability within the digital health ecosystem. Under this, every citizen will now get a digital health ID and their health record will be digitally protected.19

- An increase of almost 7% in the allocation of annual budget towards the National Health Mission, compared to the last budget.

- The Pradhan Mantri Swasthya Suraksha Yojana allocated H10,000 crore in the FY22 Budget and the increase in the budget allocation for health infrastructure to H978 crore.

- The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission received a significant increase in budget allocation in FY22. H4,176 crore of the allocated budget is proposed to be transferred to the states for supporting wellness centres, setting up of integrated public health labs and critical care hospital blocks in districts with a population of over 5 lakh

- Introduction of a National Tele Mental Health Programme for addressing mental health issues of its citizens.

- The Government also intends to promote a blended finance mechanism wherein its share will be 20% and the balance funds shall be managed by private investors/ institutions. This is likely to broaden the scope for manufacturing, research, development and innovation in the pharmaceutical and healthcare sector, paving way for start-ups and new employment opportunities.

- During FY22, the Ministry of Tourism established the National Medical & Wellness Tourism Board to promote Medical and Wellness Tourism in India.

- The Union Cabinet approved the MoU between India and Denmarkonco-operationinhealthandmedicine.Theagreement will focus on joint initiatives and technology development in the health sector to improve public health status of the populations of both countries.

- Introduction of ‘Vision 2035: Public Health Surveillance in India?. Under this the Government aims to make the public health surveillance system in India more flexible and predictive to strengthen action preparedness at all levels.

Emerging trends and opportunities in the Indian healthcare market

Spotlight on tele-medicine: Major hospitals across India actively have adopted tele-medicine services and entered into several Public-Private Partnerships (PPPs). The Health Ministry?s eSanjeevani tele-medicine service crossed 3 crore tele-consultations since its launch, enabling patient-to-doctor consultations from the confines of their homes, and doctor-to-doctor consultations.20 Funding in tele-medicine, digital records, remote monitoring, and fitness applications are examples of how health-tech firms that have joined the fight against bottlenecks caused by the growing population and the limited infrastructure by delivering cutting-edge technology to address big difficulties. Furthermore, bio-technology along with tele-medicine has lately emerged as a key concept, with a market value of more than US$100bn predicted by 2025.

Penetration of health insurance: India?s out-of-pocket expenditure as a percentage of current health spending is 63%, among the highest in the world. However, the ratio is changing slowly as health insurance penetration is growing at an exponential rate in the region. However, still, only 15% of the population is protected by medical insurance. Less than 5% of the population buys a plan voluntarily of their own accord. This figure suggests that the Indian insurance industry has still a long way to go to make it to the hearts of the masses. But the Government introduced programmes like the Rashtriya Swastha Bima Yojana (RSBY), to enhance the purview of insurance coverage.

Emerging mobile & wearable devices market: India is emerging as a strong market for wearables, and is expected to reach 129 mn units in 2030. India?s wearables market defeated supply chain-related issues and grew significantly in 2021 with wrist wearables witnessing a 141 % year on year growth from 2020 to 2021 and shipping around 14.4 Mn units.21 Adopting robotic surgeries: Robotic assisted surgeries (RAS) seem to be gaining some acceptance among surgeons and patients in India. RAS helps doctors perform complex surgeries with ease, reduces the size of surgical incisions, minimises blood loss, cuts pain and shortens patient?s post-procedure recovery time. Indias surgical robotics market is estimated to expand at a CAGR of 20% to hit the size of US $350 mn by 2025.

Growing e-health market: E-health is an emerging landscape in India as there is a growing effort in the healthcare industry to harness the benefits through the convergence of the internet and healthcare. The technology is emerging and encompasses an intersection of medical informatics, public health and business. The technology aims to spread awareness of the importance of health, make healthcare more affordable, and establish an easy communication between doctors and patients, and the various other services. The e-health sector in India is poised to reach US$ 9-12bn in Gross Market Value (GMV) by 2025 and US$ 40bn in Gross Market Value by 2040.22

Rising Tier I and Tier II cities: With the onset of the pandemic, more and more healthcare players focused on enhancing their presence in Tier I and Tier II cities backed by rising affordability and a higher need for better healthcare services. Further, the Government encouraged the private sector to establish hospitals in these cities by providing tax benefit to these hospitals for the first five years as an extension to the tax holiday under section 80-IB.23

Major developments in 2021 – 100% FDI in Automatic Route

The challenges posed by Covid-19 pandemic this year made Indias healthcare industry ripe for investment. The investment opportunities range from hospitals to pharmaceuticals and medical devices. Apart from that, home healthcare solutions have gained significance with the emergence of new-age technologies like Artificial Intelligence (AI), Big Data and Machine Learning (ML). Hospitals and healthcare centres were the biggest categories in the healthcare industry, reaching US$ 279.2bn by the end of the current fiscal. The pharma and medical devices categories also saw a big jump in terms of overall growth.

Apart from that, simplified FDI policies in healthcare were major catalysts to push for investments. It is pertinent to mention the fact that 100% FDI has been allowed under the automatic route to invest in developing hospitals and healthcare centres. Besides this, 100% FDI under automatic route is allowed in medical device manufacturing.

Challenges and threats in the Indian Healthcare Industry

Infrastructure: For a long time, India has struggled with inadequate infrastructure in the form of a dearth of well-equipped medical facilities. Furthermore, the rate of construction of such medical teaching or training institutions remains low in comparison to the urgent requirement.

Manpower: One of India?s most important issues is a chronic shortage of medically qualified personnel, which includes physicians, nurses, paramedics, and basic healthcare workers. Rural regions, which account for over 66 percent of India?s population, remain a source of concern for healthcare development.

Patient-Load: Healthcare institutions were already under duress prior to the Covid-19 epidemic because of an excessive patient load. Furthermore, administering healthcare facilities for a population of 1.4bn people is a herculean effort in and of itself.

Rural-urban disparity: Despite the fact that a big percentage of the Indian population lives in rural regions, there remains a huge rural-urban inequality in healthcare services. As qualified healthcare providers are concentrated in the cities, it is difficult for people in rural regions to obtain appropriate treatment.


In the post-Covid era, major growth drivers for investments in the Indian healthcare industry will include tele-medicine opportunities, diagnostics, higher utilisation of technologies and most importantly rising income levels, which means a steady growth in the ability to access better healthcare and related services including hospitals and medical centres. The industry expects a steady growth in home healthcare in the years ahead as it had emerged during the pandemic, because of the rising elderly population in the country. With overburdened hospitals and lack of beds, personalised care at home has increased and is here to stay. Driven by factors like better health awareness after the pandemic, rising incomes, lifestyle diseases and increasing access to health insurance, we expect the demand for better healthcare to sustain over the long term.

The hospital industry in the country accounts for 80% of the total healthcare market and it is expected to reach US$ 132bn by 2023, growing at a CAGR of 16 -17%.24 In the coming years, non-metros i.e., Tier-II and III cities are expected to recover faster than the metropolitan areas and tier-l cities. Apart from that, digital healthcare is expected to gain strong momentum in the next few years. tele-medicine is another area which is also expected to attract investment, as entrepreneurs are likely to explore this area.

The much-needed automation in healthcare is also expected to evolve in the coming years as we see more and more initiatives undertaken by both the Government and private players, including RPA (Robotic Process Automation) whereby manual, repetitive and time-consuming tasks like patient appointment scheduling, account settlements and claims management can be eliminated, thereby using human resources more effectively. The reason for its stellar growth is that it offers a package of AI, data science and cloud management while decreasing costs and conveys a top-quality patient-driven experience at the same time. The adoption of healthcare solutions in India is at a budding stage, but the experts expect it to grow at a robust pace.

Company Overview

Aster DM Healthcare is one of the leading healthcare player in the GCC and India. Founded in 1987 by Dr. Azad Moopen, Aster DM Healthcare has emerged as an integrated healthcare service organization that provides the complete circle of care to people through its world-class network of hospitals, clinics, labs and pharmacies, providing primary, secondary, tertiary to quaternary care to all segments of the population. Over the last 35 years, the organisation has been consistent in its mission to provide quality healthcare at affordable costs at the doorstep of the people that it serves, thereby pushing boundaries of excellence in healthcare and setting global benchmarks in the field of medicine and patient care. Starting from a single clinic in Bur Dubai in 1987, Aster DM Healthcare is recognized as one of the largest private healthcare providers operating in multiple GCC states and an emerging player in India through its network of 27 hospitals, 120 clinics, 371* pharmacies, 14 labs & 100 patient experience centres as on March 31, 2022. Overall, Aster DM Healthcare, as on March 31, 2022, has 632 facilities employing a diverse workforce of 25,800+ employees, including 3,200+ doctors and 7,400+ nurses focused on delivering the brand promise of "We?ll Treat You Well." Over the years, Aster has built a healthcare eco-system across India and GCC which has strengthened the healthcare delivery model and added immense value to both the regions. In GCC region, Aster?s primary care clinics act as the initial touchpoints in the patient journey, while pharmacies and hospitals continue the care. For complex tertiary or quaternary care patients are referred to Aster?s Hospitals in India. Indian operations act as a source of talent (doctors, nurses, and other employees) to GCC operations. Within GCC operations, clinic doctors can hone their surgical skills in Aster?s hospitals. In the course of time, the organization has built a notable financial, operational, societal growth trajectory in GCC with rapid scale-up in hospitals, clinics, pharmacies across geographies.

Key strengths

Medical Excellence: Aster DM Healthcare aspires for perfection and excellence to deliver quality healthcare to millions of people. The Company strives to provide affordable and accessible healthcare with compassion, integrity and unity. We have upheld the highest standards of patient care, echoed in numerous industry recognitions and patient endorsements

Global Network: Aster has its roots in the UAE and has been expanding exponentially across GCC and India. The healthcare brand has a strong global network in over 7 countries and aims to touch the lives of millions through its world-class healthcare services.

Experienced professionals and management team: Aster has a legacy of over 3 decades, and a well-managed team of professionals dedicated to serve each patient to the best of their abilities.

Robust & Expansive Healthcare Ecosystem: Aster provides holistic healthcare solutions for people, including primary, secondary, tertiary, and quaternary care. We have 27 hospitals equipped with state-of-the-art equipment, extensive network of 120 clinics enabling patient-feeder structure and strategically located 371* pharmacies and 2 Reference labs, 12 Satellite labs, 100 Patient experience centers serving patients across geographies as on March 31, 2022.

Business review GCC

In the GCC region, Aster has its presence mainly in the United Arab Emirates and in Oman, Qatar, Saudi Arabia, Bahrain and Jordan through our hospitals, clinics, and pharmacies.

GCC Hospitals

GCC Hospitals: Aster provides diverse range of in-patient services through its hospitals in GCC. The out-patient services provided by the Company includes consultations for various issues and preventive health screenings. Through our three different brands – Medcare, Aster and Access, we cater to all different sections of the public.

Hospitals-GCC Location Commencement or Acquisition year Bed Capacity Operational Beds (Census)
Medcare Hospital Dubai, UAE 2007 64 55
Al Raffah Hospital Muscat, Oman 2009 72 52
Al Raffah Hospital Sohar, Oman 2010 80 62
Medcare Orthopaedics and Spine Hospital Dubai, UAE 2012 33 27
Aster Hospital Mankhool Dubai, UAE 2015 136 118
Medcare Women and Child Hospital Dubai, UAE 2016 111 95
Medcare Hospital Sharjah, UAE 2017 128 100
Sanad Hospital Riyadh, KSA 2011 232 194
Aster Hospital Doha, Qatar 2017 61 30
Aster Hospital Qusais Dubai, UAE 2018 158 126
Ibri Hospital Ibri, Oman 2019 31 25
Cedars Hospital Dubai, UAE 2019 20 14
Aster Hospital Sonapur Dubai, UAE 2020 34 25
Total 1,160 923

GCC Clinics

Aster possesses one of the largest network of clinics in UAE, operating to the highest quality of standards and offers affordable health care, thereby, setting new benchmarks in care to make a positive difference to the lives of its patients. The Company has 95 clinics present in UAE, 6 clinics present in Oman, 6 clinics present in Qatar and 2 clinics in Bahrain.

GCC Retail Pharmacies

Aster has a huge pharmacy network of 240 stores catering to its customers a wide range of products including nutritional supplements, baby care, personal care, medical device, rehabilitation products etc. The Company has its pharmacies present in the UAE (217), Oman (6), Qatar (5), Jordan (10) and Bahrain (2) as on March 31, 2022.


In India, we operate mainly in Kerala, Karnataka, Maharashtra, Andhra Pradesh and Telangana through our hospitals, clinics, pharmacies, labs and patient experience centres.

India Hospitals

Aster has 14 hospitals in India with an installed capacity of 3,905 beds as on March 31, 2022. These hospitals offer a wide range of care services such as Cardiac, Orthopaedic, Neurology, Oncology, etc. The Company, during the year, also witnessed a significant rise in inpatients and outpatients count in its Indian hospitals.

Hospitals-India Location Commencement or Acquisition year Bed Capacity Operational Beds (Census)
Aster Aadhar Kolhapur, Maharashtra 2008 228 193
Aster MIMS Kozhikode Kozhikode, Kerala 2013 683 554
Aster MIMS Kottakkal Kottakkal, Kerala 2013 340 263
Aster CMI Bengaluru, Karnataka 2014 495 326
Aster Medcity Kochi, Kerala 2014 702 521
Aster Prime Hyderabad, Telangana 2014 158 112
DM WIMS Wayanad Wayanad, Kerala 2016 NA NA
Hospitals-India Location Commencement or Acquisition year Bed Capacity Operational Beds (Census)
Dr. Ramesh Hospital Guntur, Andhra Pradesh 2016 350 175
Dr. Ramesh Hospital Main Centre, Vijayawada, Andhra Pradesh 2016 159 135
Dr. Ramesh Hospital Labbipet, Vijayawada, Andhra Pradesh 2016 54 50
Dr. Ramesh Sanghamitra Hospital Ongole, Andhra Pradesh 2018 150 130
Aster MIMS Kannur Kannur, Kerala 2019 302 237
Aster RV Bengaluru, Karnataka 2019 235 166
Aster Whitefield Women and Children Bengaluru, Karnataka 2021 49 37
Total 3,905 2,899

Aster Labs

Aster Labs has built strong presence in Karnataka & Kerala and has also expanded its presence to Maharashtra, Tamil Nadu, Andhra Pradesh and Telangana. As of March 31, 2022, there are 2 Reference Labs, 12 Satellite Labs and 100 Patient Experience Centres (PEC).

Aster Pharmacy

Aster Pharmacy opened Its 1st friendly neighbourhood pharmacy in February 2021 and has rapidly expanded its network as it achieved the milestone of launching 100 stores in a span of 11 months. As of March 31, 2022, 131 stores# were launched across 3 states: Karnataka – 82 stores, Kerala – 27 stores, Telangana – 22 stores

Note: #131 pharmacies in India operated by Alfaone Retail Pharmacies Private Limited (ARPPL) under brand license from Aster

Operational review (Consolidated)

Beds: The total bed capacity increased from 4,907 beds to 5,065 beds by the end of FY 22. In GCC, the number of beds increased from 1,150 to 1,160 while in India, the total number of beds increased from 3,757 to 3,905.

The total number of operational census beds have increased from 3,634 to 3,822. In India, the total number of operational census beds increased YOY from 2,686 to 2,899. In the GCC, the operational census beds decreased from 948 beds to 923 beds due to change of use as per the latest audit done.

Hospital Patient Visits: The number of in-patients count increased from 220,200+ in FY21 to 273,300+ in FY22. In GCC, the in-patients count increased from 81,900+ in FY21 to 90,900+ in FY22 and in India from 138,200+ in FY21 to 182,400+ in FY22.

The number of out-patients counts increased from ~2.97 mn in FY21 to ~4.09 mn in FY22. In GCC, the out-patients count increased from ~1.56 mn in FY 21 to ~2.06 mn in FY 22 and in India from ~1.41 mn in FY 21 to ~2.03 mn in FY 22.

Financial performance

(in J Crs.) FY 2021-22 FY 2020-21 Change
Revenue from Operation 10,253 8,608 19%
EBITDA 1,483 1,063 40%
PAT (Post-NCI) 526 148 256%

Financial Ratios

Ratio FY 2021-22 FY 2020-21 Change
Debtor Turnover Ratio (times) 5.08 3.93 1.15
Inventory Turnover Ratio# (times) 3.09 2.82 0.27
Interest Coverage Ratio& (times) 3.28 1.52 1.76
Current Ratio 1.15 1.14 0.02*
Net Debt Equity Ratio$ 1.01 1.17 -0.16
EBITDA Margin (%)@ 14.5% 12.3% 220 bps
PAT (Post-NCI) Margin *(%) 5.1% 1.7% 340 bps
Return on Net Worth (%) 14.5% 4.7% 970 bps*


*Rounded off to the nearest two decimal places #Based on cost of goods sold &Based on EBIT excluding other income $Net debt includes lease liability

Expansion plans GCC

We had a soft launch of the 101 – bed Aster Hospital in Aster Sharjah in the month of April 2022. We aim to commission the 145-bed hospital in Muscat, Oman in Q2 FY 23. In Qatar, we are also planning to have a 60-bed hospital which is currently in its design stage. In terms of clinics, there are plans to open new clinics in newer and upcoming areas, like New Dubai, to expand our footprint to serve more patients in UAE.

For pharmacies, there is focus on adding outlets in UAE where presence is less (New Dubai, Abu Dhabi). We are also planning to add 1,000 additional Doors in UAE for Aster Brands through Modern Trade channels. Expanding into other GCC countries like Saudi Arabia and non-GCC countries through Franchisee network is also under evaluation.


We started operations at the 140-bed Aster Mother Hospital in Areekode in May 2022. Later, in FY 23, Phase 2 of 275-bed Aster Whitefield Specialty Hospital is expected to be operationalised. In Kasargod, Kerala, we have signed the lease agreement to build a 200-bed tertiary care multi-specialty hospital project which is also expected to complete by FY 25.

Phase 1 of the Aster Trivandrum Hospital, which will be a 350-bed facility, has been announced. it is expected to be completed by FY 26. We also have the 500-bed Aster KLE Hospital in Bengaluru which is expected to be completed by FY 26.

Aster signed a Memorandum of Understanding with The Government of Tamil Nadu which proposes an investment of H 500 crore in hospitals, pharmacies and laboratories in the State. This will help provide quality healthcare at affordable cost to the people of Tamil Nadu and generate employment for more than 3,500 people. Chief Minister M.K. Stalin has encouraged the initiative and ensured support to our group.

For Aster Labs, we have an aggressive growth plan to expand our reach to 38 labs and around 400 patient experience centers by the end of FY 23, which will also involve further expansion into Maharashtra, Delhi, Tamil Nadu, and Karnataka.

For Aster Pharmacy, we plan to launch around 175 pharmacies in FY 23. With this planned expansion, the cumulative number of pharmacies is expected to cross 300. Aster pharmacies in India are operated by Alfaone Retail Pharmacies Private Limited (ARPPL) under brand license from Aster.

Strategies for road ahead

1. To grow share of India business - More capital allocation to India in the coming years through addition of bed capacity via brownfield, greenfield, Operation and Management, and inorganic routes. Investing in adjacencies with low capex requirements such as Aster Labs to increase the India share of the business to around 40% over the next three years.

2. Focus on Digital - The pandemic has helped us explore the power of digitization. We are now building upon the Aster Digital Initiatives started during the Covid-19 pandemic with the launch of the One Aster app. The app will become the primary omni-channel mode of engagement and shall allow us to have a unique, integrated view of the patient across all the healthcare touchpoints. The app will be our unified mode of engagement with our patient base for their wellness, housing Tele-consult, E-Pharmacy, Home Health, E-diagnostics, Chronic Disease management and creating various streams to support patient wellness. By end of FY 23, the One Aster app will cover all of UAE and will be introduced in India, in stages. The later phases will see the app roll out in other GCC countries, which are still under planning.

3. Medical Value Tourism (MVT) - Currently, our target markets are Nigeria/West African nations, CIS countries, GCC states, Turkey, and UK. For business needs, we are currently focusing on promoting Paediatric, Neurology (specifically Gene therapy), Orthopaedic and Women Health related specialities. Off late, we are seeing Kazakhstan also as developing market for Gene therapy.

With the pandemic subsiding and travel slowly normalizing, we expect MVT to return to pre-COVID levels in FY 23.

4. Aster Global Centre - Aster Global Center (AGC) is now one year old. Numerous process improvement plans have been implemented thereby making processes agile across all major functions like Finance & Accounts, Procurement, Human Resources, Information Technology, Revenue Cycle Management (RCM) to name a few. With over 350 people operating from three different locations in India – Bengaluru, Calicut & Gurgaon, AGC is poised to become 600 strong by end of FY 23. Not only has the AGC acted as a Business Continuity Process (BCP) location for all critical processes, but it has also slowly become the "go to" location for all new implementations. Aster Global Center is poised to become the Center of Innovation in the coming years, piloting some of the most critical and important processes and products for Aster.

Human Resources

At Aster, our employees across 7 geographies are core towards delivering on our shared mission, vision and growth of the Organization. Aster?s unique caring culture has a combined focus on customer experience where listening and empathy are emphasized, with employee experience where people express themselves to find meaning and feel fulfilled, which results in achievement outcomes where ownership, meritocracy, & excellence are our guiding stars. All employees play vital roles in providing quality care to our patients and customers. Our diverse teams are represented from 70 countries, working cross-culturally together as part of one large family. We are an equal opportunity employer & strive to build diverse teams. Aster drives a high-performance culture through continuous learning & development interventions focused on organizational wide capability building and professional growth for its Asterians.

As of March 31, 2022, the Company has workforce strength of 25,806 including 3,279 doctors, 7,473 nurses, 11,751 other employees and 3,303 outsourced staff.

Risk Management

Risk management is the set of methods by which companies evaluate potential losses and take action to reduce or eliminate such threats. Risks are inevitable to any business activity. Risks and controls are key components of our Company?s Enterprise Risk Management (ERM) protocol. Our Risk Management framework is robust that helps us proactively identify potential risks, analyze them, and take measures to reduce/mitigate the risk. This facilitates us to set up procedures to avoid the risk, minimize its impact, or at the very least help cope with its impact. Essentially, the goal of risk management is to identify potential problems before they occur and have a plan for addressing them. Our Risk Management includes internal and external risks that could negatively impact our organization and we have a strong regulatory framework for timely identification and mitigation of such risks.

Since the inception of the ERM team, there are several risk initiatives driven across the organization, thereby adding value to the business. These include: -

Risk Identification and Assessment Process

• Preparation and drafting of the risk registers for the business along with assessment of each risk and review of controls for Hospitals, Clinics, Retail and Homecare businesses.

Risk Awareness Sessions

• Imparting risk and compliance awareness sessions across various teams to increase understanding of risks and familiarizing teams with risk assessments and control activity via new joinee induction and Bi-weekly newsletter named ‘Risky Times?.

ESG risks

• Implementation of a Environment and Social Risk (ESR) framework and policy to monitor and mitigate any ESG risks.

• Detailed Standard Operating Procedures and templates drafted and approved for ESG reporting across Energy, Water, Emissions, Environmental Compliance and Employment.

Vendor Risk Assessment

• Preparation and launch of a vendor risk assessment process to review supplier Data Security and Data Privacy risks before onboarding the services.

Risk Acceptance

• Introduction of a risk acceptance process with monthly reporting to the Chairman and Deputy Managing Director.

External Policy review

• Reviewed and contributed to the draft Health Data Protection and Confidentiality policy issued by DHA.

Risk reviews and management

• Risks and controls are reviewed monthly with the Executive Directors, CEOs, and COOs across various business verticals.

• Board Risk Committee is held on a quarterly basis to review the top risks of the organization.

Enclosed below is a summary of the top risks for Aster DM Healthcare as agreed and approved at the Executive Risk Committee along with the potential impact and appetite, and our mitigation strategies.

Risks Impact Mitigation
Information and Data Security Risks At Aster we have a low-risk appetite for a security breach in which significant amounts of confidential data affecting our patients, customers, employees, or shareholders, and/or proprietary information has been compromised that can result in regulatory notification, monetary fines, indemnity, and reputational damage. The organisation remains committed to its IT transformation strategy to ensure the robustness of systems across the landscape. With this in mind, several IT controls are in place to ensure that patient data isn?t compromised. Engaged with third party agencies for enhancement of overall security posture of the organization.
People Risks The growth of the Company is highly dependent on its ability to acquire a talented workforce. The expertise and engagement of employees drives organisational success. Inability to acquire such talent can significantly impact the Company?s operations. As our largest area of expenditure, we have a medium risk appetite for pursuing outcomes that lead to more efficient and economic people outcomes. The Company continuously works to improve its work environment to retain a pool of trained medical and non-medical professionals with a low-risk appetite for any deviation from the Aster Code of Conduct and Ethical Governance Standards.
Legal and Compliance Risks With its vast network in seven countries, the Company provides services within highly regulated environments and must meet high level of compliance and legal expectations from regulatory bodies. Failure to comply with regulations could lead to legal consequences and/ or regulatory censure and we have a low-risk appetite for the same. Aster constantly keeps track of regulatory frameworks in different countries and implements them within the stipulated timelines within the business. All permits are renewed in countries where it operates. The Company abides by all laws and regulations set by various Governments, ensuring smooth and seamless operations across geographies.
Financial Risks With its widespread operations the Company expects strong internal controls to be maintained which ensures compliance with governance and accounting principles in line with the credit risk policy. We have no tolerance for risks that may lead to fraud or financial misconduct leading to brand and reputational damage, decreased revenue and/or market share. The Company has created a Centre of Excellence for RCM aiming for better payer relationship and uniformity. There is an increased focus on rejection control, digitalization, consolidation, offshoring, and other cost controlling initiatives. All deviations from our code of conduct and ethical governance standards are investigated and mitigated accordingly.
Business Continuity and Resilience Risk Healthcare providers need to ensure that patients/ customers can always avail their services. The Company has business continuity strategy ensuring that even during incidents we continue to operate critical businesses with a predetermined recovery time. Failure to do so would cause an impact on our business operations adversely affecting our patients, resulting in loss, or declined revenue and/or brand and reputation damage. Disaster management plan and emergency response plans as per the emergency codes available for all our facilities. The Company is taking adequate measures to backup business applications and systems thereby reducing instances of data losses ensuring continuity.
Clinical and Patient Health and Safety Risks Healthcare providers must follow stipulated norms for meeting quality and safety standards. Failure to do so could cause patient harm and may have an impact on patient care and impact the future of the Company. Aster DM continuously strives to deliver quality care to achieve desired results by following evidence based clinical practise guidelines. Patient safety and advanced medical care are, therefore, a priority for the Company. We practice quality control ensuring compliance with quality norms in each country.
Reputational Risks The Company accepts that some level of reputational risk is inherent in all our activities which include the effect of factors such as regulatory intervention, employee conduct, human resource practices, information security and patient experience. Negative perceptions by patients, staff or other stakeholders may jeopardize the Group?s credibility and impede the achievement of delivering our strategic objectives. Aster operates within three brands namely, Aster, Medcare, and Access. The brand value and reputation of the organization has grown tremendous in the last 30 years since it began operations. Several brand and marketing strategies are in place and social media listening tools and Online Reputation Management practices have been deployed to monitor events both internal and external that could pose a reputational risk.
Strategic, Transformation and Innovation Risks Technology is changing every day and it is critical for the Company to stay up to date with new and updated innovations in the industry. Insufficient embrace of digital capabilities may not meet performance expectations related to quality, cost, and innovation as well as our new digitally born competitors with hyper scalable business model and low cost of operations. Aster adopts new and emerging technology and has taken digital initiatives to regularly to provide superior quality patient-centric care. The organisation has state-of-the-art equipment to aid complex treatments and deliver excellent care to each one of its patients.
Competition and Market Share Risks The healthcare sector is dynamic and growing demand for healthcare continues to attract more players to the industry. As a result, inadequate competitive strategies may deteriorate the Company?s value proposition which can result in reduced brand value and loss of customers and patients. With over 30 years of industry experience, the Company has a vigorous business model that lends it a competitive edge over its peers. To leverage industry trends and prevailing technology stack, an external partner has been engaged as the implementation partner with a clear governance mechanism established reporting into the Steering Committee.
Vendor and Supply Chain Management Risks The Company works with numerous suppliers who provide services to ensure we have a smooth business operation. We recognize that optimizing our supply chain and enhancing its sustainability as a key element in achieving our strategic aims. Failure to do so could have an impact on clinical quality and lead to inability in delivering quality services to our patients/customers. The Company has obtained a CIPS certification for Procurement Ethics Compliance for the Group Supply Chain Management. ERP rollout for verticals in a phased manner is underway. Also, introduction of an E-capex platform would further strengthen the overall Vendor and Supply Chain Management process.

Internal Control System and their adequacy

The Management has laid down internal financial controls to be followed by the Company. The Company has adopted policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The internal control system is commensurate with the nature of business, size and complexity of operations and has been designed 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. As part of the Corporate Governance Report, CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company.

The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and supports a continuous improvement program. The internal audit program is managed by an in-house internal audit function and by Grant Thornton Bharat LLP, external firm. The Audit Committee of the Board oversees the internal audit function. The Audit Committee is regularly apprised by the internal auditors through various reports and presentations. The scope and authority of the internal audit function is derived from the audit charter approved by the Audit Committee. The internal audit function develops an internal audit plan to assess control design and operating effectiveness, as per the risk assessment methodology. The internal audit function provides assurance to the Board that a system of internal control is designed and deployed to manage key business risks and is operating effectively.

Cautionary statement

Certain statements in the Management Discussion and Analysis section concerning future prospects may be forward-looking statements which involve several underlying identified / non-identified risks and uncertainties that could cause actual results to differ materially. Besides the foregoing changes in the macro-environment, a global pandemic like COVID-19 may pose an unforeseen, unprecedented, unascertainable and constantly evolving risk(s), inter alia, to the Company and the environment in which it operates. The results of these assumptions made, relying on available internal and external information, are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based are also subject to change accordingly. These forward-looking statements represent only the Company?s current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements, whether because of new information, future events, or otherwise.