Gian Lifecare Ltd Management Discussions

Global Economy

Global growth is projected at 3.0 percent for 2025 and 3.1 percent in 2026, an upward revision from the April 2025 World Economic Outlook. This reflects front-loading ahead of tariffs, lower effective tariff rates, better financial conditions, and fiscal expansion in some major jurisdictions. Global inflation is expected to fall, but US inflation is predicted to stay above target. Downside risks from potentially higher tariffs, elevated uncertainty, and geopolitical tensions persist. Restoring confidence, predictability, and sustainability remains a key policy priority. The world economy is at a precarious moment. Heightened trade tensions, along with policy uncertainty, have significantly weakened the global economic outlook for 2025. Higher tariffs resulting in a significant increase in the effective tariff rate in the United States of America are likely to strain global supply chains, drive up production costs and delay critical investment decisions, while also contributing to financial market volatility. Global economic growth is now projected to slow to 2.4 per cent in 2025, down from 2.9 per cent in 2024. The downward revisions in growth forecasts are broad-based, affecting both developed and developing economies. Weakening global trade growth and investment flows are compounding the slowdown. Many trade-reliant developing countries face mounting challenges from reduced exports, lower commodity prices, tighter financial conditions, and elevated debt burdens.

Indian Economy

Indias GDP growth numbers for the last quarter of fiscal 2024 to 2025 came as a welcome surprise, with the economy growing at a brisk 7.4% year on year. Growth for the full fiscal year came in at 6.5% driven by strong private consumption expenditure and investments, indicating domestic demand might be more resilient than expected, supported by easing inflation and favorable conditions in rural economies. Private final consumption expenditure grew 6% in the last quarter of fiscal year 2024 to 2025. Although consumption spending growth slowed this quarter, annual growth was 7.2% which was well ahead of overall GDP growth. What came as a relief is that, after years of being led primarily by the government, green shoots were visible in private investment, suggesting broader participation in capex formation. Gross fixed capital formation rose by a strong 9.4% in the fourth quarter, up from an average of 6.2% in the last three quarters. However full-year gross fixed capital formation growth was more modest at 6.7% the fourth-quarter acceleration may suggest that private capex may have turned the corner as consumption spending showed signs of improvement.

Industry and Company Outlook

There is considerable slowdown in growth, moderating inflation and uncertain outlook. However, your company will continue to strive for meaningful growth, focusing as always on superior credit quality, a balance portfolio mixes and efficient cost management in order to sustain profitability.

Indias healthcare sector has been growing at a compound annual growth rate (CAGR) of 22%5 driven by several factors including population demographics, a growing middle class, higher earnings, greater health awareness and an increase in lifestyle disorders. The increasing prevalence of non-communicable diseases (NCDs), making up 50% of the disease burden and 60% of total deaths in India6, is creating a demand for advanced healthcare services. The Indian healthcare market is expected to reach USD 367 billion by 2023. Due to digitisation,

innovation and novel hybrid business models that incorporate conventional and technology companies, the sector has experienced substantial growth over the last five years. The pandemic also sparked a long-lasting change in behaviour towards personal hygiene, health insurance, fitness and nutrition, as well as health surveillance and physical examinations.

Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), which was allocated H 7,200 cr in FY24 (12% more than H 6,412 cr in 2022-23), highlights the governments focus on extending the AB-PMJAY health coverage to more than 400 million additional people who are not currently covered under any government or private health insurance scheme.

Rising insurance coverage, the growth of telemedicine and government initiatives like e-health, tax benefits and incentives have also contributed to the development of Indias healthcare market. Investments of over USD 200 billion are expected in medical infrastructure by FY 2024, resulting in improved healthcare facilities nationwide.

In the recently released Union Budget 2023-24, the Government has encouraged the deployment of Artificial Intelligence (Al) in research and innovation in India. This targeted focus on the Al sector, which has strong connections to diagnostics has the potential to bring about substantial changes in the industry.

The governments initiative to establish three Al centres of excellence in leading Indian institutions will contribute to the development of sustainable healthcare solutions. Considering the critical role of Al research in diagnostics, these centres will aid in the creation of indigenous products for the industry

The Indian government has undertaken numerous initiatives to ensure universal healthcare coverage and insurance for its citizens through Ayushman Bharat - Pradhan Mantri Jan Aarogya Yojana (AB-PMJAY). The AB-PMJAY scheme aims to provide benefits to an estimated 500 million beneficiaries, granting each family up to FI 5 lakh each year to cover hospitalisation expenses. The programme is recognised as the one of the largest government-funded healthcare initiative and has been allocated FI 7,200 crore in the India Budget 2023-24. The government has taken various steps to kick start investment. Policy rate cuts by Reserve Bank of India and improving business sentiment could also support revival in investment.

Your company is fully aware that the opportunities in the diagnostic sector will be many and diverse in nature. While this provides impetus for our sustainable growth, your company is also duly careful that from amongst the multiple choices of attractive businesses available we always make the right choice. Your companys business model and its risk management policies and mechanisms are being constantly reviewed and upgraded to insure this.

The outlook for the healthcare and diagnostic market in India appears promising with strong revenue growth projected for the upcoming years. It offers attractive margins and has room for expansion. Specialised tests and pathology are driving growth. The industry is fragmented however, it presents opportunities for new business models. Medical device manufacturers have also uncovered growth prospects in India. With considerable capital expenditure for cutting- edge diagnostic facilities, the nation has also emerged as one of the foremost locations for high- end diagnostic services, serving a larger section of the populace. Future demand for healthcare services is anticipated to increase due to factors such as improved income levels, an ageing population, rising health awareness and shifting attitudes towards preventive healthcare.

Risks and concerns

Risks to a varying degree, is inevitable in all business transactions in an organization which is in financial services. Your company, being in one of the most competitive businesses has to manage various risks. These risks include Credit risk, Liquidity risk, Interest rate Risk and operational risk hence, strong risk management capabilities are critical for a growing company operating in a rapidly changing environment.

In certain situations, diagnostic testing is becoming more accessible to a wider population. Point-of-care testing is gaining popularity due to its affordability and convenience. While the Companys established testing infrastructure provides comprehensive and reliable diagnostic outputs, it recognises the potential of integrating such technologies into its service delivery framework. The Company is actively exploring ways to incorporate these advancements to enhance its offerings and improve the patient experience. At the test menu level, a dedicated team of specialists plays a crucial role in evaluating and advising on new developments. This diligent approach ensures that the Company stays at the forefront of technological advancements in the field of diagnostics, providing accurate diagnoses and trend analysis for patients. The integration of advanced diagnostic tools and techniques allows for improved patient care and reinforces the Companys position as a trusted provider of accurate and reliable diagnostics. Further, we are actively managing the risks, emanating from Technology also. To that end, weve deployed cutting edge cyber security technologies using defence indepth model. Further, we periodically perform the cyber security assessments across our IT ecosystem to evaluate the control effectiveness. In addition to that, we follow industry reputed Information Security Management System such as ISO 27001.

The Company has been expanding its laboratory network to meet the growing demands of existing and emerging sampling requirements. This includes establishing patient touch points through franchisee partnerships, integrating home collection services, and continuously evaluating and introducing new tests to its portfolio. These initiatives ensure that the Company remains agile, adaptable, and well-positioned to meet the demands of its customers while maintaining a competitive edge in the diagnostic sector.

The diagnostics industry in India is subject to existing regulations and guidelines set forth by the Central Government and State governments. These regulations ensure that the industry adheres to specific standards and practices, thereby safeguarding the best interest of patients. In times of seasonal outbreaks or pandemics, the Government may intervene to protect public health.

The Company leaves no stone unturned to ensure compliance with all applicable regulations. As the Company is part of a largely unorganised industry, it is aware of the unique challenges that may emerge due to sudden changes in regulations. Flowever, its well-established infrastructure and robust operational capabilities position it favourably to navigate such changes and restore normalcy faster

The diagnostics industry in India is predominantly unorganised, presenting a significant opportunity for businesses to enter the market. The industry has witnessed the emergence of online portals and web aggregators, who have integrated themselves into certain aspects of the diagnostic business value chain. To gain traction faster, these new players are not hesitant to leverage pricing as a marketing strategy. In response to the intense competition, the Company has adopted a comprehensive approach that focuses on brand building and network expansion.

By prioritising the delivery of high-quality services, it has managed to differentiate itself from industry peers. Additionally, the Company has made consistent investments in digital technologies, which has enabled it to create a distinct identity in the market.

The Risk Management committee reviews and manages the risks at periodic intervals.

The risk management framework of the company continues to be driven by the following fundamentals: -

> Identification of key risks faced by the company

> Evaluating the probability of their occurrences and their impact

> Set an appropriate balance between risk and reward in order to maximize shareholder return

> Set tolerance limits and established adequate review mechanisms to monitor control the risks.

> Incorporate robust reporting mechanism and adoption of appropriate mitigation processes

The company manages credit risks through stringent credit norms established through several years of experience in this line of business and continues to follow the time-tested practices of personally assessing every borrower, before committing to a credit exposure. This process ensures that the expertise in lending operation acquired by the company over the period is put to best use and acts to mitigate credit risk. Liquidity risks and interest risk arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity proceeds.

Human Resource Management

The company continues to give priority to its human assets. The company provides a fair and equitable work environment to all its employees. The company is working continuously working to create and nurture an atmosphere which is highly motivated and result oriented.

Financial performance

The financial performance of the company for the year under review is discussed in detail in the Directors Report.