Gaudium IVF and Women Health Ltd Management Discussions

*Profit after tax from continuing operations, consistent with the headline figure used elsewhere in the Annual Report.

Gaudium IVF and Women Health Limited ("Company") or ("Gaudium IVF") operates in Indias IVF and assisted reproduction services industry. As per the Infomercies IVF and Fertility Services Industry Report (September 2025, reproduced in the Prospectus), the Indian IVF market was valued at approximately USD 1.32 billion in 2024 and is projected to grow to approximately USD 4.54 billion by 2034; a CAGR of approximately 13.13%, outpacing the global IVF markets projected growth from USD 27.49 billion to USD 54.60 billion at approximately 7.10% CAGR. Indias share of the global IVF market is expected to rise from approximately 4.8% to 8.3%. Global demand for fertility care remains structurally significant. The World Health Organization estimates that approximately one in six people of reproductive age experience infertility during their lifetime, while highlighting continuing gaps in affordability, accessibility and quality of fertility care.

The market remains significantly underpenetrated; by most industry estimates only around 2% of Indias infertile population accesses treatment annually against an estimated 25-30 million infertile couples. Structural drivers cited across industry commentary include a declining total fertility rate (now below the replacement level of 2.1), delayed marriage and childbearing in urban India, and rising lifestyle-related infertility, set against an industry that is consolidating from fragmented standalone clinics toward organized, multi-centre platforms; a shift accelerated by tightening compliance requirements under the Assisted Reproductive Technology (Regulation) Act, 2021 and the Surrogacy (Regulation) Act, 2021.

According to the Sample Registration System (SRS) Statistical Report 2023, released by the Office of the Registrar General & Census Commissioner of India, Indias Total Fertility Rate (TFR) was 1.9 in 2023; the first time the national rate has fallen below the replacement level of 2.1 in the recent SRS series; with the urban TFR at 1.5 and the rural TFR at 2.1. Eighteen States and Union Territories recorded a TFR below replacement in 2023, with the countrys largest metropolitan markets; Delhi, West Bengal, Tamil Nadu and Maharashtra; materially lower. TFR measures actual births per woman and is a function of many choices, not solely biological capacity. As Indian urban households delay marriage and first childbirth, the gap between intended and biologically achievable family size widens, and it is this widening gap, not the TFR itself, that constitutes the addressable population for assisted reproduction.

The regulatory framework has been formalised in parallel. The Assisted Reproductive Technology (Regulation) Act, 2021 (Act No. 42 of 2021) and the Surrogacy (Regulation) Act, 2021 (Act No. 47 of 2021) both came into force on January 25, 2022, followed by detailed rules notified by the Ministry of Health and Family Welfare in June 2022. Every ART clinic and ART bank is required to register under the National Assisted Reproductive Technology and Surrogacy Registry, subject to inspection by the appropriate State authority; registration is valid for five years. The Acts and Rules together prescribe minimum standards for physical infrastructure, laboratory equipment and specialist manpower, mandate written informed consent and record-keeping, restrict the use of gametes and embryos, require insurance cover for oocyte donors, and prohibit sex selection. This shift from a largely self-regulated environment to a codified national framework is accelerating the consolidation of the industry from fragmented standalone clinics toward organised, multicentre platforms; a structural change that favours operators able to meet the compliance perimeter and is expected to support greater standardisation and transparency across the sector.

The clinical practice of fertility care is also evolving. Increasing adoption of embryo cryopreservation, Frozen Embryo Transfer (FET), Preimplantation Genetic Testing (PGT), advanced embryology laboratory capabilities and elective oocyte cryopreservation is broadening both the scope and the durability of the patient episode, while the geographical footprint of organised fertility care is expanding beyond the traditional metropolitan centres. These clinical and access developments, together with regulatory formalisation and rising awareness, are reinforcing the medium-term shift toward larger, better-standardised fertility-care platforms.

Indias organised fertility-care market remains fragmented, comprising standalone specialist clinics, multi-centre fertility platforms and hospital-led fertility services. As the sector matures, competitive differentiation is increasingly determined by clinical capability, laboratory infrastructure, technology adoption, regulatory compliance, patient experience and the ability to scale consistently across locations.

Gaudium IVF is positioned as a specialist, pure-play fertility-care platform with assisted reproduction at the core of its operating model. As at March 31, 2026, the Company operated 7 hubs and 28 spokes across more than 30 locations, enabling local patient access while concentrating advanced embryology and laboratory capabilities at hub centres. Investment in AI-assisted embryology tools (SiD and ERICA) and the GAAT platform further supports process standardisation and consistency of clinical outcomes across the network.

The competitive environment is being reshaped by regulatory formalisation under the Assisted Reproductive Technology (Regulation) Act, 2021 and the Surrogacy (Regulation) Act, 2021. These statutes have introduced mandatory registration, defined infrastructure and manpower standards, informed-consent requirements and stricter controls on gamete and embryo handling. As compliance expectations rise, providers with established clinical systems, laboratory quality and governance frameworks are better placed to scale sustainably within the organised segment.

Looking ahead, the Companys competitive positioning will be supported by its specialist focus, expanding network, technology-enabled clinical processes and capacity to scale while maintaining quality and compliance standards. As, to the Companys knowledge, the first fertility-focused company listed on Indian stock exchanges, Gaudium IVF also has the opportunity to reinforce transparency and institutional credibility as the organised fertility-care sector continues to develop.

Gaudium IVFs business is best understood as a structured clinical pathway rather than a single procedure. A typical patient journey begins with consultation and diagnostic evaluation, followed by ovarian stimulation, oocyte (egg) retrieval, fertilisation and embryo culture in the laboratory, and culminates in embryo transfer. Where embryos are cryopreserved, patients may return for one or more frozen embryo transfers. Supporting services such as genetic testing, fertility preservation and related gynaecological care often form part of the overall pathway.

Revenue is generated as patients progress through these stages. The Company generally provides treatment under bundled packages that cover the principal clinical steps, with revenue recognised as each stage of the service is completed. Under the Companys revenue-recognition policy (Refer accounting policy, Note No. 2.4.N of Consolidated Financial Statements), income is recognised stage wise completion i.e. stimulation, pickup, embryo formation & embryo transfer. Performance is therefore driven by three interrelated factors: the number of patients who commence treatment, the rate at which they convert through successive clinical stages (particularly oocyte retrieval and embryo transfer), and the mix of services undertaken; including fresh versus frozen cycles and any ancillary procedures.

In addition to core IVF services, the Company generates revenue from associated hospital and pharmacy activities. These adjacent streams capture related patient spend within the same care pathway, reinforce continuity of care and complement the primary fertility offering.

The operating model is built around a hub-and-spoke network. Advanced embryology laboratories and specialised clinical capabilities are concentrated at hub centres, while spoke locations provide convenient access for consultation, monitoring and follow-up. This structure enables the Company to maintain high clinical and laboratory standards while extending geographic reach and improving patient convenience.

• Growing Addressable Market: The patient base is structurally expanding due to rising infertility, delayed family planning, and lifestyle factors, affecting tens of millions of couples in India.
• Advanced Clinical Capabilities: Utilizing sophisticated technologies like AI-assisted embryo selection, genetic screening, and cryopreservation has improved success rates and built patient trust.
• Medical Tourism Potential: A combination of highly experienced clinical talent and favorable cost structures positions India as an emerging hub for cross-border fertility care.
• Scalable Expansion Model: Utilizing hub-and-spoke and asset-light formats allows for cost-effective expansion into under-penetrated Tier-II and Tier-III markets without massive capital strain.
• Integrated Care Offerings: Combining Assisted Reproductive Technology (ART) with gynecology, wellness, and counseling improves patient retention and increases the lifetime value of each center.

• High Capital Requirements: Scaling advanced infrastructure requires significant investment, particularly for specialist recruitment and lab-grade equipment (though the Company is mitigating this through asset-light partnerships).
• Fragmented Regulations: Inconsistent state-level interpretation and implementation of the ART (Regulation) Act and the Surrogacy (Regulation) Act create operational and compliance variability.
• Social Stigma: Residual cultural hesitations around fertility treatments, particularly outside metropolitan areas, continue to slow the pace of market adoption, though awareness is gradually improving.

• Large, underpenetrated market with structural demand growth of approximately 13.13% CAGR, and industry consolidation favouring organized, multi-centre operators over fragmented standalone clinics.
• The Group operates a pan-India network of 7 hubs supported by 28 spokes across 30+ locations as at March 31, 2026, and completed its Initial Public Offer of 2,08,86,200 equity shares at ?79 per share – a fresh issue of 1,13,92,500 shares raising ?9,000.08 Lakhs and an offer for sale of 94,93,700 shares aggregating ?7,500.02 Lakhs – listing on NSE and BSE on February 27, 2026, oversubscribed approximately 7.27 times. Consolidated revenue from operations grew 47.56% to ?10,435.70 Lakhs, with the pharmacy business conducted through Gaudium International Private Limited broadening the base beyond core IVF treatment.
• Rapid Growth Strategy: 19 new IVF centres planned under the Objects of the Offer; 10 in FY27, 8 in FY28 and 1 in FY29; with the first new centre (South Extension, New Delhi, featuring AI-enabled "Signature Labs") operational from July 16, 2026 and a Gaudium Women Hospital at Lucknow approved by the Board on June 25, 2026 at an outlay of approximately ?1500.00 Lakhs.
• Continued investment in technology; the Groups AI-assisted embryology tools (branded SiD and ERICA) and its GAAT platform; positioned by management as a differentiator against both larger, less specialised hospital chains and smaller standalone clinics, alongside an emerging international-patient and medical-tourism opportunity given Indias materially lower per-cycle cost relative to the United States.

• Operational, reputational and medical-legal risks inherent to fertility healthcare, including isolated patient complaints and a Delhi Medical Council advisory relating to advertising practices at an acquired entity.
• High dependence on doctors, nurses, embryologists and other healthcare professionals for service quality and patient outcomes, in a market where scarce clinical talent is a genuine constraint on the pace of new-centre roll-out.
• Contingent tax liabilities aggregating ?3,419.48 Lakhs under appeal before the respective authorities.

The Groups business falls within a single primary business (healthcare business) and geographical segment; the provision of IVF treatment and maternity care within a single geographical area (India). Accordingly, segment information is not required to be disclosed under Ind AS 108, as confirmed in the notes to both the standalone and consolidated FY26 financial results.

Per the Investor Presentation, the FY26 consolidated services revenue mix was as follows. Pharmacy operations are conducted through the wholly owned subsidiary Gaudium International Private Limited and are captured only in the consolidated figures – the entire FY26 standalone revenue of ?7,157.85 Lakhs relates to the core healthcare business.

Actual utilisation of the Fresh Issue Net Proceeds as at March 31, 2026, according to the notes to the FY26 financial results, was materially behind the schedule disclosed in the Prospectus:

Of the ?8,131.20 Lakhs unutilised at year-end, ?8,100.00 Lakhs were held in fixed deposits, ?1.20 Lakhs in the Companys current account and ?30.00 Lakhs in the IPO account.

The Rapid Growth Strategy contemplates 19 new IVF centres; 10 in FY27, 8 in FY28 and 1 in FY29, across cities named in the Prospectus. Management expects the expanded network to enhance pan-India brand visibility, drive higher patient footfall and strengthen key financial parameters over the medium term. Early execution evidence (the South Extension launch, the Lucknow hospital approval, and monitoring-agency-confirmed proceeds deployment) indicates the roll-out has now moved from a funded-but-undeployed plan to active execution; the near-term trade-off, visible in the Q1 FY27 results discussed under "Threats" above, is margin compression as new-hub costs are incurred ahead of the revenue they are intended to generate.

Arbitration proceedings initiated by Neomile Corporate Advisory Limited seeking interim reliefs of ?2,920.50 Lakhs inclusive of GST, with a Sole Arbitrator, Honble Justice N. M. Jamdar (Retd.), Former Chief Justice of the High Court of Kerala, appointed as the Sole Arbitrator by order dated April 02, 2026. The management of the Company considers the claim baseless and without merit, but given the quantum, progress should be tracked closely. Operational, medical-legal and reputational risk inherent to fertility healthcare services, including the risk of patient complaints or medical negligence claims. Dependence on key medical talent and on the founder-Promoters, Dr. Manika Khanna and Dr. Peeyush Khanna.

Per the notes to the FY26 standalone and consolidated financial results:

(Continued from previous page — 2025: ?3,286.72 Lakhs) and the receivables turnover ratio slowed further; independent data sources place the Companys debtor days at approximately 187 as at mid-2026, corroborating that collection cycles warrant continued monitoring as the network scales. Liquidity risk is managed through rolling cash flow forecasts; ?8,113.08 Lakhs were held in other non-current financial assets at year-end, largely the parked issue proceeds, a substantial portion of which has since begun to be deployed (see Outlook).

A consumer complaint before the Delhi District Consumer Disputes Redressal Commission - IX (East), claiming ?50.00 Lakhs together with ?2.20 Lakhs in expenses and ?0.51 Lakhs in legal costs, continues to be contested by the Company, which expects a favourable outcome.

Interest rate risk arises on floating-rate borrowings; no hedging instruments are currently used. Credit risk on trade receivables is managed through an expected credit loss provision matrix; consolidated trade receivables rose to ?5,337.93 Lakhs at March 31, 2026 (March 31, 2025: ?3,286.72 Lakhs) and the receivables turnover ratio slowed further; independent data sources place the Companys debtor days at approximately 187 as at mid-2026, corroborating that collection cycles warrant continued monitoring as the network scales. Liquidity risk is managed through rolling cash flow forecasts; ?8,113.08 Lakhs were held in other non-current financial assets at year-end, largely the parked issue proceeds, a substantial portion of which has since begun to be deployed (see Outlook).

The Company has set up a Risk Management Committee to oversee the development and implementation of the Companys risk management framework. The Committee meets at least twice a year to implement, review and monitor the risk management plan for the Company and any other such functions, including cyber security, as may be delegated by the Board. The Committee is also responsible for periodically evaluating the effectiveness of the risk management framework and ensuring its continued relevance. In the opinion of the Board, there are currently no material risks that may adversely impact the long-term viability of the Company.

The Company maintains a robust and comprehensive system of internal financial controls that is commensurate with the size, scale, and complexity of its operations. These control frameworks are meticulously designed to provide reasonable assurance regarding the reliability, completeness, and accuracy of financial and operational reporting. Furthermore, they ensure strict adherence to the Companys policies, the safeguarding of assets against unauthorized use, and the proactive prevention and detection of frauds and errors.

During the financial year, these controls were rigorously tested, and no reportable material weaknesses were observed. The findings and the comprehensive IFC report were reviewed by the Audit Committee and the Board of Directors, both have expressed satisfaction with the adequacy of the existing systems.

Consolidated revenue from operations grew 47.56% to ?10,435.70 Lakhs in FY26 (FY25: ?7,072.40 Lakhs). Profit for the year from continuing operations grew 27.69% to ?2,448.85 Lakhs (FY25: ?1,917.86 Lakhs), on EBITDA of ?3,770 Lakhs at a 36.13% margin (FY25: ?2,863 Lakhs at 40.48%); the margin compression reflects the lower-margin pharmacy revenue mix and scale-up costs. The Group also reported a loss of ?2.75 Lakhs from discontinued operations following disposal of its holding in EKK Global Private Limited on August 05, 2025 for a consideration of ?1.00 Lakh, generating a net gain on sale of ?3.24 Lakhs recognised in other income. Basic and diluted earnings per share were ?3.92 (FY25: ?3.12).

On a standalone basis, revenue from operations grew 21.32% to ?7,157.85 Lakhs (FY25: ?5,900.16 Lakhs) and profit after tax grew 19.61% to ?2,228.77 Lakhs (FY25: ?1,863.38 Lakhs). The gap of ?3,277.85 Lakhs between standalone and consolidated revenue is attributable almost entirely to the pharmacy business conducted through Gaudium International Private Limited.

As of March 31, 2026, consolidated total assets more than doubled to ?19,310.45 Lakhs (compared to ?8,851.27 Lakhs as of March 31, 2025). Consolidated total equity also surged to ?15,230.21 Lakhs (up from ?4,629.74 Lakhs), primarily driven by a fresh issue of equity shares and retained earnings. On a standalone basis, total assets increased to ?17,858.59 Lakhs (from ?7,497.57 Lakhs) and total equity grew to ?14,926.48 Lakhs (from ?4,543.33 Lakhs).

Consolidated non-current borrowings were reduced to nil (down from ?172.73 Lakhs). However, current borrowings increased to ?2,307.48 Lakhs (from ?1,720.71 Lakhs) to fund the working capital requirements of an expanding receivables and inventory base. Overall, the Company maintains a lean net debt profile and did not declare any dividends during the year, which aligns with its growth-stage capital allocation strategy.

During the year, the Company strengthened its performance management practices by aligning individual and departmental objectives with broader organizational goals. A robust, periodic review mechanism was implemented to maintain employee focus, facilitating continuous improvement and prompt course correction through constructive feedback.

Furthermore, the Company institutionalized a structured talent management framework to identify and nurture top performers. This initiative focuses on upskilling critical talent in business-essential areas and providing them with exposure to high-impact projects, thereby accelerating their readiness for leadership roles. Supported by a differentiated compensation philosophy that ensures competitive remuneration, this dual-pronged approach of development and targeted reward has significantly enhanced the retention of our critical talent.

The total number of employees in the Company as on March 31, 2026, was 120 as against 118 employees in the previous year. The Company has also engaged professionals for various support and operational services and have deployed 28 personals as against 16 personals in the previous year. Besides the above, there are Consultant Doctors who work on a Fee for Service basis.

Industrial relations across all facilities remained cordial and peaceful throughout the year under review.

The table below sets out the ratios specified under Schedule V, Part B of the SEBI LODR Regulations on a consolidated basis, computed per the notes to the FY26 consolidated financial results, with explanations for every change:

Return on Net Worth, on a consolidated basis, declined to 24.66% in FY26 from 52% in FY25; a decline of approximately 52.6%. This was driven primarily by the substantial increase in the average equity base following the Fresh Issue, during the year, and not by any decline in absolute profitability: consolidated profit for the year from continuing operations in fact grew 27.69% year-on-year to ?24,48.85 Lakhs. On a standalone basis, Return on Equity was 22.89% in FY26 against 52% in FY25.

Return on Net Worth, on a consolidated basis, declined to 24.66% in FY26 from 52% in FY25; a decline of approximately 52.6%. This was driven primarily by the substantial increase in the average equity base following the Fresh Issue of Equity Shares completed during the year, and not by any decline in absolute profitability: consolidated profit for the year from continuing operations in fact grew 27.69% year-on-year to ?24,48.85 Lakhs. On a standalone basis, Return on Equity was 22.89% in FY26 against 52% in FY25.

The effect is arithmetic and expected in the year of a large primary issuance, and the ratio should be read alongside absolute profit growth and the pace at which Issue proceeds are subsequently deployed into revenue-generating capacity; a process that, as set out in the Outlook section, has now visibly begun.

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. These can generally be identified by words such as "aim", "anticipate", "believe", "expect", "estimate", "intend", "objective", "plan", "project", "shall", "will", "will continue" or "will pursue". The Company cannot assure investors that the expectations reflected in these forward-looking statements will prove correct, and actual results could differ materially. Investors are cautioned not to place undue reliance on such statements or to regard them as a guarantee of future performance.