Dr Agarwals Health Care Ltd Management Discussions

Company Overview

We are Indias largest eye care chain by revenues and surgical facilities, supported by a hub-and-spoke model for operational efficiency and consistent care. Our comprehensive services include cataract, refractive and speciality surgeries; consultations, diagnostics and non-surgical treatments; and retail opticals, contact lenses, accessories and eye care pharmaceuticals.

Our network comprises 288 eye care facilities across India and Africa. We have performed 3,23,245 surgeries and served 30,09,301 patients in FY26. Our total income amounted to Rs 2,125 Crores, reflecting a 20.92% year-on-year increase, while EBITDA stood at Rs 614 Crores, marking a 22.22% growth. Our medical workforce includes 3,157 professionals, including 968 doctors and 2,189 paramedics.

Indian Healthcare Industry

Indian Healthcare Delivery Market Poised for Robust Growth in the Medium Term*

Indias healthcare delivery industry is projected to grow from Rs 7.0 Lakhs Crores in FY25 to Rs 11.2-12.2 Lakhs Crores by FY30P, at a CAGR of 10-12%. Growth is driven by increased demand for routine medical treatments, elective surgeries and Out-patient Department (OPD) services. Structural factors such as lifestyle-related ailments, medical tourism, higher incomes and changing demographics further fuel demand.

Segmentation of the Indian Healthcare Delivery Market by Single Speciality and Multispeciality Hospitals*

Indias healthcare delivery market comprises single-speciality and multi-speciality hospitals. Multi-speciality accounts for 55-65% of the private and trust-based market, while the share of single-speciality is 35-45%. In FY26, the market of single-speciality healthcare hospitals was valued at Rs 2.6-3.5 Lakhs Crores. The single-speciality segment has witnessed rapid expansion, growing from 25-35% of the private and trust market in FY20 at a CAGR of 10-15% through FY26E, outperforming overall industry growth at 9.8% CAGR during the same period.

Multi-Speciality Hospitals:

- Offer a wide range of medical specialties under one roof, enabling integrated and holistic care

- Designed to manage complex, multi-system conditions and comorbidities efficiently

- Benefit from economies of scale in infrastructure, diagnostics, and staffing

- Attract a larger, more diverse patient base due to breadth of services

- Enable internal referrals and cross-speciality collaboration, improving patient retention

- Support round-the-clock emergency and critical care services

- Invest in dedicated medical equipment not typically found in general hospitals

Growth drivers for multispeciality hospitals include coordinated care, advanced infrastructure, and strong referral networks, enabling long-term, sustainable expansion.

*As per CRISIL Intelligence, May 2026

Single Speciality Hospitals:

- Focus exclusively on a specific illness or type of ailment

- Infrastructure, operations and budgets are tailored to the needs of that condition

- Require lower capital expenditure (capex), making them capex-light, scalable and replicable

- Offer specialised expertise and superior clinical protocols for high-quality outcomes

- Equipped with standard facility blueprints (SOPs, equipment, training), making them easy to scale

- Preferred by patients for focused care and consistent quality

- More agility in decision-making with fewer management complexities

- Better positioned to adopt advanced technologies

Growth drivers for single speciality hospitals include a patient-centric model, clinical focus, cost efficiency and scalability through standardised protocols and streamlined operations. Strong brand equity, network expansion and investment in advanced technology further enhance their ability to deliver consistent, high-quality care. Their clear value proposition and standardisation make them particularly well-suited for scalable expansion into Tier-2 and Tier-3 cities.

A. Indian Eyecare Industry

a. Large Addressable Eye Care Market with Huge Untapped Potential*

Indias eye care industry is projected to reach a market size of Rs 74,000-84,000 Crores by FY30P, growing at a CAGR of 12-14% from FY25. While eye care currently represents 7% of Indian healthcare delivery market, it remains one of the fastest-growing segments due to rising demand and significant untapped potential.

According to IAPB, India has the worlds highest number of visually impaired people, with nearly one in every five affected. The high prevalence of eye disorders drives a growing need for medical intervention, making eye care an integral part of the domestic healthcare system.

*As per CRISIL Intelligence, May 2026

Eye Care is a Critical Healthcare Need in India Today: India has the Highest Number of People with Vision Loss Globally

b. Key Growth Drivers*

- Demographics and Income: Rising income levels, growing per capita NNI, ageing population

- Disease Burden: Increasing prevalence of myopia, cataract, glaucoma, and other eye disorders

- Policy and Coverage: Government schemes like NPCB&VI and Ayushman Bharat, expanding health insurance penetration

- Market Trends: Growth in medical tourism, rising awareness of eye health, and lifestyle-related vision issues

- Industry Enablers: Value-added services, strong brand equity, wide network presence, SOP-driven care, and comprehensive treatment offerings

- Untapped Potential: Indias lower cataract surgery rates compared to global averages indicate significant headroom for growth

Non-Surgical Services:

- Routine check-ups and screenings

- Early identification of key eye disorders that may require surgery

- Post-surgical recovery through regular monitoring and follow-up care

Split of Indian eye care market (in value) by surgical and non-surgical treatments

82-87% Surgical treatment

13-18% Non-surgical treatment

c. Segmentation of the Eyecare Industry*

Surgical Interventions:

- Cataract Surgery

- Retina Surgery

- Refractive Surgery

- Glaucoma and Cornea-Based Surgery

*As per CRISIL Intelligence, May 2026

d. Market Structure*

Indias eye care market comprises a mix of organised eye care service chains and standalone hospitals and clinics.

Split of Indias eyecare market (in value) by eyecare service chains and standalone eye hospitals/ clinics (FY26E)

Split of Indian Eye Care Market (in Value)

Organised Eye Care Service Market in India

c. Rs 2,200 Cr. CAGR 21.3% --> c. Rs 7,030 Cr. CAGR 18.4% --> c. Rs 13,800 Cr.

FY20: 89%-91% Standalone Centres / Hospitals, 9%-11% Eye Care Services Chain, ~19% market share of Dr. Agarwals

FY26E: 84%-86% Standalone Centres / Hospitals, 14%-16% Eye Care Services Chain, 26-27% market share of Dr. Agarwals

FY30P: 81%-84% Standalone Centres / Hospitals, 16%-19% Eye Care Services Chain

Dr. Agarwals witnessed faster growth than organised eye care service market

Eye Care Service Chains Positioned to Grab Market Share:

- Higher brand equity fostering patient trust

- Standardised level of operations ensuring consistent, high-quality patient care across facilities

- Widespread network presence

- Comprehensive set of treatments

Increased private equity participation, strategic acquisitions and industry consolidation continue to accelerate the growth of organised eye care service chains, strengthening operational capabilities, expanding geographic reach and improving access to advanced clinical infrastructure.

e. Key Entry Barriers for the Eyecare Industry*

The Indian eye care industry poses high entry barriers due to capital-intensive infrastructure, limited specialist talent, entrenched brand loyalty and complex regulatory compliance.

Key Entry Barriers for Eye Care Service Chains:

- High quality talent and institutional capabilities to continuously upskill and train manpower

- Need strong operational expertise to design standard operating procedures

- Paucity of healthcare personnel in eye care industry in India

- Patient experience is a key parameter across all stages of operations

- Need to upgrade technology in line with evolving industry trends, which may lead to higher capex

- Establishing trust and brand recognition across multiple regions can be challenging, as patients often prefer local, well-known providers for eye care services

*As per CRISIL Intelligence, May 2026

f. Paucity of healthcare personnel in eye care industry in India

India faces a limited supply of trained ophthalmology professionals. As of 2025, India had approximately 20,944 ophthalmologists and 17,849 optometrists at the secondary and tertiary levels, translating to an average availability of around 1.5 ophthalmologists per 100,000 population. At the facility level, secondary and tertiary eye institutes had, on average, approximately three ophthalmologists and two optometrists, underscoring the limited depth of specialised talent available across the country.

This supply constraint is further reinforced by the limited capacity for developing specialised eye-care talent. Approximately 2,750 PG ophthalmology seats are offered annually through MD/MS, DNB and diploma programmes across over 230 institutions. Notably, the top 20 institutes account for only 368 PG seats, with the five leading institutes offering just 147 seats, highlighting the constrained pipeline of trained ophthalmology professionals.

B. Indias Eyewear Market*

The Indian optical eyewear market is projected to grow at a CAGR of 9-11% between FY25 and FY30P, driven by rising prevalence of refractive disorders, increasing awareness of eye health, improving affordability and expanding access to optical products across urban and rural markets. The market is expected to reach Rs 37,000-40,000 Crore in FY26 and Rs 50,000-60,000 Crore by FY30P. Nearly half of the Indian population has refractive disorders, supporting sustained demand for spectacles and contact lenses.

C. Performance Overview

a. Total Income:

Total income surged by 20.92% to Rs 2,124.52 Crores in FY26, up from Rs 1,757.02 Crores last year, driven by growth in operating revenue and other income.

b. Revenue from Operations:

Revenue from operations grew by 21.57% to Rs 2,080.09 Crores for FY26, from Rs 1,711.00 Crores in the previous year, led by:

1. Revenue from sale of services stood at Rs 1,627.79 Crores in the reporting year, compared to Rs 1,346.23 Crores in FY25, primarily driven by:

(i) Income from surgeries reaching Rs 1,387.43 Crores from Rs 1,116.82 Crores, due to higher surgical volumes at existing facilities, along with incremental revenue from newly opened facilities. Additionally, growth was supported by a focus on attracting out-patient cases at our primary facilities, improved referrals to our secondary and tertiary facilities, and a shift toward high-end surgeries;

(ii) Income from consultations totalled Rs 92.84 Crores from Rs 86.84 Crores;

(iii) Investigations reached Rs 147.42 Crores from Rs 142.41 Crores, led by higher revenues at existing facilities, driven by marketing and business development efforts and contribution from new facilities; and

(iv) Income from annual maintenance contract stood at Rs 0.10 Crores from Rs 0.16 Crores

(v) Patient volumes reached 30,09,301 from 24,33,173 last year, and surgeries performed rose to 3,23,245 from 2,82,326 over the previous year

2. Revenue from sales of products stood at Rs 449.34 Crores in FY26 from Rs 358.38 Crores in FY25, primarily due to:

(i) Higher sales of opticals, contact lenses and accessories, which surged to Rs 270.53 Crores from Rs 216.21 Crores, supported by increased volumes, improved order conversions, as well as improved average order value and contributions from new and recently acquired facilities;

(ii) Sales of pharmaceutical products reaching Rs 175.59 Crores from Rs 139.07 Crores, owing to higher volumes and the greater contributions from existing and new facilities. Sale of advanced vision analysers (AVAS) and Trial Lenses to Rs 3.22 Crores from Rs 3.10 Crores;

3. Other operating revenue stood at Rs 2.95 Crores during the reporting year, up from Rs 6.39 Crores last year, primarily due to a decrease in clinical research activities.

c. Other Income:

Other income reduced to Rs 44.44 Crores in FY26 from Rs 46.02 Crores last year, primarily due to decrease in:

(i) liabilities no longer required (written back) decrease to Rs 7.28 Crores from Rs 9.01 Crores, mainly owing to unclaimed trade payables.

(ii) miscellaneous income came in at Rs 4.30 Crores from Rs 5.85 Crores;

(iii) Interest on Income Tax refund decreased to Rs 0.91 Crores from Rs 1.89 Crores. This decline, along with (a) a decrease in profit on redemption of current investments (which includes net gain/(loss) arising on financial assets designated as FVTPL) to Rs 14.41 Crores from Rs 17.13 Crores, was partially offset by (b) an increase in interest income on financial assets carried at amortised cost - bank deposits to Rs 7.69 Crores from Rs 3.99 Crores, and (c) an increase in net gain on foreign currency transactions and translation to Rs 5.57 Crores from Rs 1.87 Crores.

*As per CRISIL Intelligence, May 2026

d. Total Expenses:

Total expenses rose by 17.76%, reaching Rs 1877.21 Crores in FY26 compared to Rs 1,594.15 Crores in FY25, driven by higher costs across stock-in-trade purchases, inventory changes, consumables, consultancy fees, employee benefits, finance, depreciation and other operational expenses.

e. Purchases of Stock-In-Trade:

Purchases of stock-in-trade increased by 16.49% to Rs 202.38 Crores from Rs 173.73 Crores, due to increased sales of (i) opticals, contact lenses and accessories (Rs 103.45 Crores from Rs 85.47 Crores); (ii) pharmaceutical products (Rs 92.31 Crores from Rs 80.01 Crores); (iii) clinical items and equipment (decreased to Rs 6.14 Crores from Rs 7.80 Crores); and (iv) food items (Rs 0.48 Crores from Rs 0.45 Crores).

f. Changes in Inventories of Finished Goods, Stock-In-Trade and Work-In-Progress:

Stock-in-trade and work-in-progress witnessed a net increase of Rs 10.45 Crores during FY26, due to surges in inventories of (i) opticals, contact lenses and accessories (Rs 24.39 Crores at the beginning of the year to Rs 32.80 Crores at the end of the year); (ii) pharmaceutical products (Rs 13.82 Crores at the beginning of the year to Rs 15.78 Crores at the end of the year); and (iii) clinical items and equipment held for trading (from Rs 0 Crores at the beginning of the year to Rs 0.08 at the end of the year). In comparison, we experienced a net increase of Rs 12.81 Crores during FY25, primarily due to increases in our inventories of (i) opticals, contact lenses and accessories (Rs 16.14 Crores at the beginning of the year to Rs 24.39 Crores at the end of the year); and (ii) pharmaceutical products (Rs 9.07 Crores at the beginning of the year to Rs 13.82 Crores at the end of the year) partially offset by a decrease in clinical items and equipment held for trading (Rs 0.19 Crores at the beginning of the year to Rs 0 Crores at the end of the year).

g. Consumption of Surgical Lenses, including Other Consumables:

Consumption of surgical lenses, including other consumables, increased by 16.68% (reaching Rs 264.24 Crores during FY26 compared to Rs 226.46 Crores last year), driven by higher patient volumes and surgeries performed, which in turn, required increased volumes of surgical lenses and other consumables.

h. Consultancy Charges for Doctors:

Consultancy charges for doctors rose by 19.47% to Rs 294.86 Crores in FY26, up from Rs 246.81 Crores last year. This increase was supported by doctors salary increments, higher variable pay linked to our revenue growth and costs associated with engaging additional doctors for new facilities opened during the reporting year and the full year effects of facilities that we opened last year. This year, we engaged 968 doctors, compared to 831 doctors engaged in the previous year.

i. Employee Benefits Expense:

Employee benefits expense surged by 23.53% to Rs 403.79 Crores this year from Rs 326.87 Crores last year, due to higher salaries and bonuses (Rs 363.46 Crores this year, compared to Rs 290.05 Crores last year), following employee increments and headcount growth to 4,019 from 3438 (excluding doctors and paramedical staff). The increase reflects hiring additional senior and middle management personnel for the newly opened facilities during FY26 and the full year effect of those opened in FY25. Additionally, contributions to provident and other funds reached Rs 21.75 Crores this year from Rs 17.83 Crores last year in line with higher provisions for statutory benefits and increments offered to employees.

j. Finance Costs:

Finance costs decreased by 16.85% to Rs 90.46 Crores from Rs 108.79 Crores, due to decrease in (i) interest expense (interest on term loan from banks reached Rs 7.79 Crores from Rs 31.36 Crores); (ii) interest expense (interest on deferred consideration stood at Rs 20.43 Crores from Rs 28.92 Crores. Interest on deferred consideration comprises the interest on deferred liabilities associated with acquisitions which are charged to our profit and loss statement as an expense in accordance with Ind AS); and (iii) other borrowing costs (Rs 0.12 during FY26 from Rs 0.93 Crores during FY25). These were partially offset by increase in (i) interest on lease liabilities (Rs 62.12 Crores from Rs 47.58 Crores)

k. Depreciation and Amortisation Expenses:

Depreciation and amortisation expense increased by 19.72% to Rs 276.24 Crores for FY26 from Rs 230.74 Crores in FY25, due to increases in (i) depreciation on tangible assets (Rs 118.96 Crores from Rs 88.92 Crores, driven by additions to leasehold improvements and medical equipment during the year); (ii) depreciation of right-of-use assets (Rs 99.26 Crores from Rs 78.13 Crores due to the addition to buildings and lease arrangements constituting right-of-use assets upon the setting up of 57 facilities during FY26; and (iii) amortisation of intangible assets (Rs 58.02 Crores from Rs 63.69 Crores, primarily decreased due to change in useful life in FY26).

l. Other Expenses:

Other expenses increased by 21.36% to Rs 354.83 Crores this year, from Rs 292.38 Crores last year. Marketing expenses, the largest component of other expenses, increased to Rs 54.17 Crores from Rs 47.32 Crores due to expenditure on television commercials and increased expenses on digital marketing initiatives. Key components of other expenses that increased were (i) hospital maintenance charges and security charges (Rs 44.08 Crores from Rs 34.83 Crores due to the addition of new facilities); (ii) power and fuel expenses (Rs 29.55 Crores from Rs 24.17 Crores due to increases in operations at our existing and newly added facilities during the reporting year); (iii) business promotion and entertainment expenses (Rs 35.53 Crores from Rs 24.06 Crores due to the expansion of operations at existing and newly added facilities this year); (iv) repair and maintenance - others (Rs 12.18 Crores from maintenance costs of our existing and newly opened facilities) and (v) rates and Taxes expenses (Rs 2.37 Crores from Rs 1.58 Crores).

m. Tax Expenses:

Our total tax expense surged to Rs 80.50 Crores, compared to Rs 49.51 Crores in the previous year, due to increased current tax expense reaching Rs 80.95 Crores from Rs 39.25 Crores, driven by higher PBT of Rs 248.64 Crores, up from Rs 159.85 Crores. Additionally, we experienced a decrease in deferred tax expenses to Rs (0.45) Crores from Rs 10.26 Crores during FY26. Our effective tax rate (which represents total tax expense expressed as a percentage of PBT for the relevant year) was 32.38% and 30.97% for FY26 and FY25, respectively.

n. Profit for the Year:

Consequently, our profit for the year increased by 52.38% to Rs 168.14 Crores, up from Rs 110.34 Crores last year.

D. Risk Management

a. Robust risk management framework overseen by the Board addresses risks to our business

b. Risk categories include operational, regulatory, medical, strategic, HR and financial risks

c. The Risk Management Committee (RMC) sets detailed risk management policies, determines risk appetite and establishes relevant frameworks. Risks are classified as medical and non-medical, with dedicated senior management personnel appointed as risk officers. Regular RMC reviews cover the risk register, heat map and mitigation plans for high/critical risks. Mitigation strategies include avoidance, transfer, control, or acceptance

d. Policies and systems undergo periodic reviews to stay relevant. While no existential threats are identified, the Board monitors material risks like litigation, fire incidents and regulatory changes

E. IT and Digital Infrastructure

a. We operate on a common, integrated technology platform that offers our doctors and paramedical staff seamless access to patient data across our network, including clinical diagnosis, surgical history, and payment records. This data enhances operational efficiency across facilities

b. Designed and developed in-house, Neo is our AI-ready hospital management system that powers operations across our network. Built to scale for over 5,000 branches and 2 million patients per day, it integrates clinical, operational and patient workflows onto a single platform, providing real-time visibility into key business metrics, patient volumes, waiting times and inventory management. Neo also supports operational adherence and maintains medical records in accordance with applicable clinical and regulatory requirements, including those relating to CGHS, ECHS, TPAs and other government and corporate partnerships.

c. Further, our data storage on cloud-based infrastructure helps medical and non-medical teams across our facilities fetch patient data remotely. Our enterprise resource planning, supported by a Business Intelligence tool, enables our management to visualise business-related information and support decision-making. We also use a licenced technology platform for managing our finance, HR and payroll functions.

F. Human Resource Management

a. As of March 31, 2026, our workforce comprises 7,176 employees, including 968 doctors and 2,189 paramedical staff.

b. We strengthen our integrated HRM systems to enhance recruitment, training, upskilling and retention of high-quality doctors and paramedical staff. We partner with medical institutions for hiring entry-level professionals, while also leveraging agencies and internal referrals to attract experienced talent.

c. We offer continuous learning opportunities, including upskilling programmes in surgical techniques, medical education, fellowships in ophthalmology, curated seminars, R&D and academic programmes and more. We also explore collaborations in clinical research, including alliances with key suppliers of high-end medical equipment and consumables such as intraocular lenses.

d. To support retention and performance, we offer performance-based compensation linked to individual and facility-related outcomes. Our strong clinical track record and commitment to continuous professional development, enabling us to attract top-tier medical talent.

G. Internal Control System

a. We have established robust internal financial controls across our facilities to ensure financial discipline and ethical conduct. These include a well-defined governance structure with delegated authority, a financial management system that ascertains accurate and transparent reporting, and a group-wide Code of Conduct. Internal audits are conducted by independent firms and findings are regularly reviewed by our Audit Committee and Board of Directors, maintaining ongoing oversight and compliance.

H. Key Financial Ratios

Particulars	For the year ended 31st March 2026	For the year ended 31st March 2025	Variance	Reason
Trade Receivables Turnover Ratio (i.e. Debtors Turnover Ratio)	14.62	15.53	(5.83%)	-
Inventory Turnover Ratio	5.24	5.88	(10.81%)	-
Interest Coverage Ratio	3.73	2.50	49.52%	Interest Coverage Ratio has increased due to Pre-closure of loans during the current year and previous year with the IPO Funds
Current Ratio	1.24	1.66	(25.17%)	Current Ratio has decreased due to the decrease in investment in Mutual funds and other instruments in the current year
Debt-Equity Ratio	0.50	0.50	0.88%	-
Operating Profit Margin	16.24%	15.88%	2.28%	-
Net Profit Margin Ratio	7.85%	6.45%	21.70%	-
Return on Net worth	6.58%	4.50%	47.06%	Return on Net worth has increased as a result of margin improvisation and revenue growth