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Global Economic Overview

Throughout the course of the year 2022, the global economy continued to grapple with several headwinds, including novel COVID-19 variants, the Ukraine war and the food and energy crises in Europe. These challenges impeded global growth prospects and furthered economic upheaval. Early in 2023, the global economy began to exhibit signs of a recovery, but recent volatility in the banking sector and persistently high inflation have clouded the outlook for sustained growth. Risks will likely remain tilted to the downside if debt levels remains high and geopolitical tensions escalate.

In March 2023, the US Federal Bank increased interest rates by 25 basis points, marking the ninth such hike since March 2022. This change elevates the benchmark federal funds rate to a target level of 4.75% to 5%¹, a peak not seen since 2007. The general economic contraction is mostly concentrated in developed economies, notably in the Eurozone and the United Kingdom (UK). Across Europe, there has been a significant reduction in growth, accompanied by sticky inflation and risks within the financial sector. The growth rate in advanced economies across Europe was projected to be 3.6% and 0.7% in 2022 and 2023, respectively².

Chinas economy is rebounding rapidly and supply-chain disruptions are winding down since reopening from its Zero-COVID Policy, indicating a gradual recovery from pandemic-induced shocks. Additionally, it is anticipated that the monetary policies of its central bank will yield results, helping ease inflation globally. Many emerging markets and developing economies, including India, are gaining ground and growth rates are anticipated to surge going forward.³

Outlook

There are early signs that indicate a slow yet steady rebound from the pandemic-induced shocks and supply-chain constraints. The pace and efficacy of fiscal and monetary policy measures to assist economic expansion will also help shape an optimistic outlook. Central banks around the world have tightened monetary policy, but it remains to be seen whether these measures will be effective in curbing persistently sticky inflation and supporting sustainable growth. Fiscal policies would also play a key role, particularly in supporting businesses and individuals affected by the pandemic and Ukraine crisis. Global GDP growth is expected to decline to 2.8% in 2023 and subsequently increase modestly to 3.0% in 2024. The emerging markets and developing economies (EMDEs) are expected to expedite revival of the world economy in the years ahead.

(Source: IMF World Economic Outlook April 2023)

Indian economic overview

Despite major global economic impediments in 2022, the Indian economy demonstrated remarkable resilience and clocked a GDP growth of 7.2% on the back of strong domestic demand and upbeat investment activity [Source: Department of Economic Affairs, Government of India]. Sectoral analysis shows that this growth was an outcome of buoyant private consumption, robust construction activity boosted by higher infrastructure investment by the Central and State Governments both, setting the stage for large-scale employment opportunities.

While the post-pandemic private investment recovery is still in its early stages, there are signs that suggest India is ideally situated to witness an upswing in its investment cycle in both the manufacturing and services sectors. The number of private investment projects under implementation in the manufacturing sector has also increased steadily over the years.

In FY23, the Indian economy recorded 7.2% growth on the back of the governments fiscal policy exhibiting a strong commitment to consolidation and effectively directing public expenditure towards a substantial increase in growth-supportive capital expenditure (capex). Capital formation thus emerged as a key driver of growth in FY23. The Index of Industrial Production (IIP) indicated a growth of 5.1% in the industrial output, with the recovery primarily influenced by the manufacturing sector, which holds a significant share within the overall industrial sector.

(Source- RBI)

Outlook

Strengthened by its underlying macroeconomic stability, India is projected to achieve a growth rate of 6.3% in the year 2024 positioning itself as one of the leading major economies of the world in 2024 [Source- World Economic Outlook April 2023]. Also, India is likely to become the fastest-growing nation among the G-20 nations in the years ahead with its presidency of the G20 Summit further bolstering its global stature. The countrys continued growth momentum is expected to make it a compelling choice for substantial investments. According to EY, Indias economy will reach a GDP size of USD 26 trillion in terms of the exchange market by 2047. Domestic consumption and investment will continue to be driven by improved prospects for manufacturing, services, agriculture and associated industries, enhanced corporate and consumer optimism, and rapid credit expansion.

Moreover, the Indian governments initiatives aimed at enhancing domestic production through the ‘Make in India and ‘Aatmanirbhar Bharat initiatives as well as the implementation of Production Linked Incentive (PLI) schemes, together with supportive monetary policies, are anticipated to give an additional impetus to the countrys economic growth.

Indias Healthcare Sector Overview

1. Current Market Size

The healthcare industry in India is witnessing robust growth and is expected to a deliver a CAGR (2016–22) of 22% to reach USD 372 billion. The hospital industry constitutes ~60% of the healthcare market.

The growth can be attributed to the normalisation of routine medical treatments, a resurgence in surgical procedures and outpatient department (OPD) serviceswithminimaldisruptionduetothepandemic.

The demand for high-quality healthcare services is driven by various factors, such as increasing burden of lifestyle diseases, rising insurance penetration, affordability and awareness, uptick in medical tourism, increase in adoption of telemedicine and overall higher investment in healthcare sector from the public and private sector, both.

2. Growing Investment in the Healthcare Sector

The Government has undertaken sustained reforms to strengthen the healthcare sector and announced conducive policies for encouraging FDI.

The healthcare sector has received cumulative FDI inflows of USD 33 billion between April 2000 to March 2023, out of which ~ USD 8.7 billion was towards hospitals and diagnostic centres.

The Indian demographics present vast prospects in the healthcare sector, which is why the sector has been garnering strong investment interest from Private Equity and Venture Capitalists from around the world. The healthcare sector in India has attracted private equity investments worth USD 8 billion in the last five years, making it one of the most preferred by investors.

The Government further plans to raise its healthcare spending to 2.5% of the GDP by FY25 from the current 1.3% of GDP.

3. Low Expenditure on Healthcare as % of GDP

Indias Healthcare Spend as % of GDP remains low

Indias current expenditure on healthcare was 3% of GDP in FY20 as per the National Health Accounts. Despite increased investment from government its healthcare spending as a percentage of GDP remains low compared to the USA (19%), the UK (12%) and even lower than other developing countries, such as Vietnam (5%) and 4% in Thailand, Malaysia and Sri Lanka.

Bed Density in India is lower than the global average (per 10,000 population)

India, which is the most populous country in the world with more than 1.4 billion people, clearly lacks adequate healthcare infrastructure. Indias bed density of 15 beds per 10,000 population is half the global median of 29. It also lags behind other developing countries including Malaysia, Brazil, Thailand and Vietnam.

Uneven Access to Healthcare with Quality Infrastructure Concentrated in Metros

In India, with 35% of the population inhabiting urban regions and 65% dwelling in rural areas, there exists a pronounced imbalance in healthcare resources. Around 63% of the entire bed capacity is in urban centers, and a mere 37% caters to the more expansive rural population. This discrepancy in healthcare infrastructure emphasizes the need for better resource allocation and healthcare development in rural regions to ensure equitable access to medical facilities for all citizens

Shortage of Qualified Healthcare Professionals

The Indian healthcare industry is confronted with critical shortage of healthcare personnel with just seven physicians and 18 nursing personnel per 10,000 people (2012 -2020 period) compared to the global median of 16 physicians and 40 nursing personnel during the same period.

4. Lower Insurance Penetration and Higher Out-of-Pocket Expenditure

Government Schemes: The Government of India has introduced various schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (ABPMJAY), state-sponsored health insurance (AB-PMJAY State Extension Schemes), Employees State Insurance Scheme (ESIS), Central Government Health Scheme to increase the coverage of medical insurance. However, government expenditure on healthcare remains low.

Insurance Penetration: In India, health insurance coverage is strikingly sparse, with only 37% of the population having health insurance. Of this, private insurance constitutes only 10%, covering just 3.7% of the population.

Out-of-Pocket Expenditure: As a result of low health insurance coverage and inadequate government expenditure, out-of-pocket expenditure on health remains as high as 52% in India.

Overall, payment mode for healthcare in India is largely cash i.e. out-of-pocket expense, which accounts for 51% of all healthcare expense, whereas government schemes accounted for 38%, PMJAYs contribution was less than 5% and insurance contributed 12% of healthcare expenditure in FY20. However, a gradual increase in health insurance penetration, coupled with higher government expenditure on healthcare will make high-quality healthcare affordable and is expected to drive demand and occupancy for tertiary care service providers.

5. Health-Tech and Tele-Medicine Market

The Indian health-tech market, which comprises of telemedicine, e-pharmacy, fitness, wellness, healthcare IT, analytics, home healthcare and personal health management has registered a strong growth in recent years. The COVID-19 pandemic has accelerated the adoption of technology in the healthcare sector. As a result, the health-tech market is expected to grow to USD 5 billion by 2023 and to USD 50 billion in another 10 years. Furthermore, the market size for telemedicine in India was around USD 830 Million in 2019 and is projected to increase to USD 5.5 Billion by 2025, registering at a CAGR of 31% during 2020-25.

6. Government Focus on Healthcare in 2023 Budget

In the line with the governments continuous efforts to further strengthen overall healthcare services in India, it has increased the budget allocation towards healthcare in the Union Budget 2023-24. Some of the key highlights are:

An estimated H 892 billion has been allocated to the

Ministry of Health and Family Welfare for the year 2023-24, up by 3.4% from H 862 billion in 2022-23.

Of the allocated H 892 billion, Department of Health and Family Welfare would receive H 862 billion and

Department of Health Research would receive H 30 billion.

Funds were also allocated towards establishing 22 new All India Institute of Medical Sciences (AIIMS), where the ministry set aside H 68 billion for the project.

Establishment of 157 new nursing colleges in the country was announced with an aim to strengthen the nursing sector.

Under the Centrally sponsored component of PM-ABHIM, H 42 billion was allocated to focus on developing capacities of health systems and institutions across the continuum of care at all levels, for preparedness in current and future pandemics/ disasters.

National Digital Health Mission aims to establish a comprehensive and cohesive digital health ecosystem at a national level. This ecosystem is designed to facilitate universal health coverage by ensuring efficient, accessible, inclusive, affordable, timely, and secure healthcare services.

A National Tele Mental Health Programme for quality mental health counselling and care services is to be launched.

Key Growth Drivers of the Healthcare Industry

1. Increase in Government and Private Expenditure towards Healthcare

The Indian healthcare industry has become one of the largest sectors with an estimated value of USD 372 billion and employing ~4.7 million people directly. Over the years, the Government has increased its expenditure on healthcare and plans to further raise healthcare spending to 2.5% of GDP by FY25 from the current 1.3% of GDP.

It is widely accepted that public healthcare facilities in India have not scaled-up to serve the requirements of tertiary and quaternary care. This has led to higher investment from private sector in building multi-specialty hospitals which can cater to the rising demand for quality and complex care.

According to industry estimates, private sector has a 40% share in hospital beds while occupying about 80% of total healthcare market in India. Private investments and expansion of healthcare infrastructure are further aided by policy support and initiatives like 100% FDI allowed in Greenfield and Brownfield projects and single window clearance e-portal to improve ease of doing business.

2. Strengthening physical healthcare infrastructure

The National Health Mission (NHM) is a government initiative aimed at providing universal access to affordable and quality health care services. In 2023-24, the government has earmarked 33% of the Ministrys budget towards the National Health Mission.

The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) is aimed at addressing the shortfall of human resources and educational capacity in the tertiary care system. It aims to do so through the creation of new All India Institutes of Medical Sciences (AIIMS) and upgrading Government Medical Colleges. Under the Scheme, 22 new AIIMS are to be established, of which six are currently operational. As per the 2023 Budget, H 6,835 crore has been allocated towards establishing of new All India Institute of Medical Sciences (AIIMS).

3. Urbanisation and greater health awareness to drive growth

With rapid urbanisation, health awareness among the general population regarding the presence and availability of quality healthcare services for both tertiary and preventive care is increasing. The COVID-19 pandemic has increased realisation of the significance of health, leading to a heightened demand for quality healthcare infrastructure.

This demand for improved healthcare facilities has become even more pronounced as people are seeking higher standards of care, prompting a flight to quality.

4. Expansion of health insurance coverage under Ayushman Bharat

Under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY), insurance cover up to H 5 lakh per family per annum is provided to around

10.74 crore poor and vulnerable families. The scheme provides coverage for 1,573 procedures as well as pre and post-hospitalisation expenses.

In 2023-24 Budget, PMJAY has been allocated H 7,200 crore which is 12% higher than 2022-23 revised estimates of H 6,412 crore.

The Economic Survey 2020-21 highlighted that the proportion of health insured households increased by 54% in states that implemented PMJAY.

5. Rising Insurance Penetration:

Health insurance penetration in India continues to be low. The last few years of the pandemic accelerated the adoption of health insurance from the perspective of insurers, the healthcare ecosystem, consumers, and the regulator. The Health insurance sector witnessed strongest growth, with premium collection increasing by 22.6% YoY in FY23. With continued increase in insurance penetration across cities is expected to improve healthcare affordability in India.

Indias Health Insurance Premium Collection (US$ Billion)

6. Rising income levels to make quality healthcare services more affordable

India as a country is estimated to take advantage of the unfolding demographic trends, increasing job creation and employment rates thereby generating higher per capita income. Indias per capita income has steadily increased to ~ USD 2,000 and is expected to double by FY32. With the higher savings emanating from higher income, healthcare is expected to become more accessible.

7. Increase in non-communicable diseases (NCD)

According to the ICMR study report, it is estimated that the proportion of deaths due to Non-Communicable Diseases (NCDs) in India has increased from 37.9% in 1990 to 61.8% in 2016.

The four major NCDs are cardiovascular diseases (CVDs), cancers, chronic respiratory diseases (CRDs) and diabetes, which share four behavioural risk factors – unhealthy diet, lack of physical activity, and use of tobacco and alcohol.

It is widely acceptable that NCDs are highly correlated with rising income of a country. The WHO projects that the demand for healthcare services related to lifestyle diseases, such as heart disease, cancer and diabetes is expected to rise amid lifestyle changes.

8. Medical tourism in India

The healthcare costs in developed countries are relatively higher in comparison to India. Long waiting times also contribute to the rise of medical value travel (MVT).

Over the years, India has become a premier and attractive destination for travellers from across the world to attain best-in-class clinical treatment.

India has been ranked 10th in Medical Tourism Index (MTI) for 2020-2021 out of 46 destinations of the world by the Medical Tourism Association. As per information provided by the Ministry of Tourism, foreign tourists arriving in India for medical purpose increased from 1.83 lakh in 2020 to 3.04 lakh in 2021.

As of 2020, the medical value of the travel market in India was USD 2.89 billion, with projections indicating a substantial increase to reach USD 13.42 billion by 2026. This presents a unique opportunity for Indian healthcare service providers to cater to the demands of foreign tourists arriving for medical purposes.

9. Advancements in Technology and Digitalization to Improve Access and Affordability

The advancement of information technology and its applications have led to the healthcare industry making systems becoming faster, more reliable and more efficient. The following are some of emerging technologies that are transforming the industry:

Electronic health records (EHR): EHRs store detailed medical data of patients in various formats, including pictures, voice recordings and videos. EHRs can also allow multiple healthcare systems to share patient data, thereby improving coordination between doctors, saving time and preventing the redundancy of recreating medical records.

Artificial intelligence (AI): Healthcare facilities are implementing AI and machine learning (ML) to improve operating efficiency and minimise human error through technological intervention. For example, hospitals are partnering with tech companies to test AI/ML algorithms for reporting X-ray and other radiological images as well as for clinical decision support systems.

Radiology information system (RIS): RIS allows doctors to access medical imagery data from multiple locations, eliminating the need to generate and maintain medical imagery on expensive films. RIS enables hospitals to store the complete radiology histories of patients together, generating detailed analytical reports on patient medical histories.

Clinical decision support system (CDSS): Assist doctorsinmakingeffectivedecisionsonthediagnosis and treatment of patients. CDSS databases contain detailed information on ailments, symptoms and diagnoses, along with patient-specific information such as medical history and allergies.

Mobile-based applications: Healthcare delivery is seeing an influx of mobile-based applications to assist doctors and patients in self-diagnosis, drug references, hospital- and doctor-search, appointment assistance, electronic prescriptions and so on.

Telemedicine: Telemedicine improves the accessibility of healthcare services in remote locations. Through telephonic conversation or video conferencing, doctors can consult patients and advise treatment.

Robot-assisted surgery: Robot-assisted surgery allows surgeons to perform procedures with very high precision and minimal invasiveness, resulting in faster recovery, less pain and reduced scarring.

eICU: An electronic intensive care unit (eICU) is an advanced model of telemedicine where state-of-the-art technology is used to provide an additional layer of critical care service to patients. In eICU, patients do not have to be in the same hospital as their critical care physicians. Through an eICU platform, caregivers can remotely access patient data, clinical profiles and treatment information. Instead of physical monitoring, a patients conditions and vital signs are monitored virtually via high-definition audio and visual equipment, and software tools. With eICU, more patients across multiple ICUs and hospitals can access quality care.

10. Changing Demography with Improvement in Life Expectancy

Life expectancy in India is likely to exceed 70 years and Indias elderly population is expected to touch 200 million in 2030. Higher life expectancy coupled with awareness for health should drive higher demand for healthcare and wellness services.

11. New Offerings

Homecare and Eldercare: Growing demand for elderly care has transformed healthcare scenario in India with the push for healthcare services to be increasingly provided outside of hospital settings in the convenience of the patients home. A wide array of treatments (including some types of ICU care) can now be delivered in the patients home. High per capita income and rising elderly population will be key drivers for such homecare services.

Labs and preventive health: Diagnostics is witnessing a rising demand for home diagnostic services and preventive health check-ups, leading to a shift from physical diagnostic laboratories. The rise in disposable income and prevalence of chronic and lifestyle diseases has propelled preventive healthcare screening and is only expected to grow.

e-Pharmacies: As per the FICCI report, the number of households purchasing medicines online increased from 3.5 million before the COVID-19 pandemic to 9 million during the pandemic. Projections suggest that this figure could potentially reach 70 million by FY25.

Outlook

According to CRISIL MI&A Research, Indias healthcare delivery industry is projected to grow at a CAGR of 10-12% between FY22 and FY27, to reach H 8.6 trillion, thereby surpassing the pre-COVID levels. This growth can be attributed to various long-term structural factors, strong underlying fundamentals, rising level of income for the population and the potential impact of increase in private and government insurance coverage.

Company Overview

Global Health Limited, operating under the brand name ‘Medanta, is a major private, multi-specialty tertiary care healthcare provider operating in the North and East regions of India. Medanta currently operates a network of five hospitals (Gurugram, Indore, Ranchi, Lucknow and Patna) and has one hospital (Noida) under construction. Medantas footprint extends across five states covering a population base of ~400 million people. As of March 31, 2023, Medanta had an installed bed capacity of 2,697 beds, engages over 1,560 doctors who work in over 30 medical speciality departments, each of which is headed by experienced and reputed clinical leaders.

The company was founded by Dr. Naresh Trehan, a world-renowned cardiovascular and cardiothoracic surgeon, with a vision to deliver best in class healthcare services across multiple super-specialties under one roof. Dr. Trehan has been awarded the Padma Bhushan and Padma Shri, the third- and the fourth-highest civilian awards in India. He has also received the Dr. B.C. Roy Award and a special award for his outstanding contributions as the ‘Indian Father of Cardiac Surgery by the American Association of Cardiologists of Indian Origin.

Our mission is ‘to deliver world class, patient-centric, integrated and affordable healthcare through a dynamic institution that focuses on the development of people and knowledge. This mission drives us to go beyond merely establishing hospitals and create a long-lasting ecosystem which houses institutions that deliver the highest quality of medicine in areas where they are most needed. We aim to elevate the standard of healthcare delivery in every community that we serve.

Medanta Model of Care

Guided by its core values of (i) patient-centric care, (ii) leadership and quality, (iii) integrity and courage, and, (iv) collaboration, learning and innovation, the company operates its businesses based on the unique ‘Medanta Model of Healthcare, which is built on five fundamental pillars:

1. Exceptional Clinical Talent – The company takes pride in engaging clinicians who are leaders in their respective fields, dedicated to delivering integrated care across multiple specialties. The vast majority of Medanta doctors work exclusively with Medanta and enjoy a high degree of clinical autonomy. The doctor-led model of work allows our clinicians to focus on the medicine and driving clinical excellence. By fostering a culture of collaboration, cooperation, and teamwork, the company ensures effective integration of multispecialty care enabling high quality treatment, particularly in complex multi-disciplinary cases.

2. World Class Infrastructure – Medanta provides doctors a platform with state-of-the-art infrastructure, enabling them to perform complex procedures with ease. For patients, Medanta hospitals offer a safe and efficient environment that facilitates fast recovery. The hospitals are equipped with a high proportion of operating theatres (OTs) and intensive care units (ICUs), reflecting the focus on handling complex clinical work. The buildings are designed with a strong emphasis on patient safety, adhering to the highest infection control practices. To ensure this, dedicated Air Handling Units (AHUs) are installed for each OT, ICU, and ward in each of our facility to maintain optimal air quality and minimizing the risk of infections.

3. Latest High-End Technology – Medanta is dedicated to delivering high-end tertiary and quaternary care using cutting-edge technology and equipment. Medanta has provided the latest tools to its doctors so they can offer the most complex diagnostics and treatment using latest technology. Examples of this include a hybrid OT-Cath Lab, Brain Suite (MRI inside an OT), multiple robotic surgical systems, latest precision radiation oncology machines such as Varian EDGE and Cyberknife, as well as the highest-end of diagnostic equipment.

4. Caring System and Processes – Medanta leverages advanced and innovative digital solutions to enhance the accessibility and quality of care provided to patients. These solutions enable seamless access to healthcare services and allow Medantas expertise to reach the maximum possible people. The company has also implemented uniform quality guidelines and standards across specialities and units to ensure that care is delivered in a safe and effective manner keeping the doctor-patient relationship at the centre of everything that we do.

5. Trust Based Compassionate Care – Medanta is committed to delivering advanced healthcare by establishing institutes of excellence that seamlessly integrate medical care, teaching, and research-led services. This holistic approach ensures that patients receive the highest standard of care with a focus on individualised treatment plans tailored to meet their specific needs. Furthermore, Medanta prioritizes transparency in its systems and processes, allowing patients and their families to have a clear understanding of the care they receive, including treatment options, costs, and post-operative care plans. At Medanta, the guiding philosophy of ‘Har Ek Jaan Anmol, meaning ‘Every Life is Invaluable, underpins every aspect of care. This philosophy serves as a driving force behind the approach taken by all medical professionals at Medanta.

Today, Medanta is one of the largest private multi-speciality tertiary care providers operating in the North and East regions of India. Medantas flagship hospital in Gurugram, with 1,391 installed beds as of March 31, 2023, was the first in the network and had opened in November 2009. Since then, Medanta has expanded to Indore (175 beds), Ranchi (200 beds), Lucknow (601 beds, with a capacity to accommodate over 950 beds), Patna (330 beds, with a capacity to accommodate 650 beds) in 2014, 2015, 2019 and 2021, respectively.

The Company is currently constructing a hospital in Noida with an expected installed capacity of 550 beds, which is set to commence operations in FY25. Once the

Noida Hospital is operational, the Company expects the number of total installed beds to exceed 3,500 by the end of FY25. This increased capacity will cater to domestic and international patients, and is in line with the Companys strategy to meet the growing demand for high quality healthcare services. During FY23, the company also announced a new 300-bed hospital project in Indore under O&M model. The hospital will have ~100 critical care beds, ~15 operation theatres, cath labs, and will also offer day care services for chemotherapy and radiation therapy. This is in line with our strategy to further strengthen our presence in Central India, and help us deliver the highest standards of patient care that Medanta is known for. Medanta Gurugram is one of the leading international patient destinations in Delhi-NCR. The Company serves patients from various nations including Iraq, Nepal, Bangladesh, as well as the CIS countries. With 1,391 beds in Gurugram and 550 beds at its upcoming hospital in Noida, the Company is well positioned to tap into the growing market of medical value tourism.

Additionally, Medanta operates six multi-speciality clinics at DLF Cybercity and Subhash Chowk (both in Gurugram), Delhi IGI Airport (all terminals), South Delhi (Defence Colony), Darbhanga and Patna. These clinics are strategically located to support patient care in out-of-hospital settings and offer day care surgeries and procedures, dialysis and advanced diagnostics. The company has also launched its homecare and retail lab and retail pharmacy services in line with the demand to ‘bring the care to the patient rather than take the patient to the care.

Awards, accreditations and recognition

Since the inception in 2009, Medanta has always focused on clinical excellence. This philosophy is embedded in our building design, our systems and processes, and our culture. Over the years, we have come to be known as the ‘last stop in Indian healthcare. It is a reputation that we do not take lightly. Medanta facilities are accredited with national and international certifications, including the Joint Commission International (JCI) for the Gurugram Hospital, and the National Accreditation Board for Hospitals and Healthcare Providers (NABH) for Gurugram, Lucknow, Ranchi and Indore hospitals.

For the last four years in a row (2023, 2022, 2021 and 2020), our hospital in Gurugram has been rated as the Best Private Hospital in India by the Newsweek. In 2023, it was also the only private hospital in India to feature in the Newsweeks list of the top 200 hospitals globally. Our hospital in Gurugram has been honoured with numerous awards, including being featured in Newsweeks list of worlds best hospitals for Cardiology and Neurology in 2022 and its list of best hospitals for Cardiology in 2021. It ranked as the best multi-speciality private hospital in North India and the second best private hospital in India as per "Best All India Multi Speciality Hospital Ranking

2022" by Outlook and NEB Research. In ‘The Times of Indias Critical Care Study 2021, the Gurugram hospital ranked first for Emergency and Trauma Care Services, Neurology, Gynaecology, and second for Cardiology, Gastroenterology, Nephrology, Oncology and Urology. This hospital was also awarded the ‘Best Multi-Speciality Hospital – National at the ‘Economic Times Healthcare Awards 2021 and ranked as the best multispecialty private hospital in North India by ‘The Week in 2021.

We believe that we achieved this leadership position by the unparalleled expertise of our experienced doctors in treating complicated cases along with ensuring the best quality of care. The same philosophy of clinical excellence is embedded in our culture across all our hospitals.

Largest hospital IPO in India

On November 16, 2022, the equity shares of the company were listed on the National Stock Exchange (NSE) under the symbol MEDANTA and on the Bombay Stock Exchange (BSE) under the scrip code 543654. With an initial offering size of H 2,200 crore this was the largest hospital IPO in Indian history. The QIB portion of the IPO was oversubscribed 28.6 times with marquee Indian and international investors participating.

Business overview

Our Hospitals:

Our Gurugram, Indore and Ranchi hospitals collectively have a capacity of 1,766 beds and contributed 73% of the Companys revenue in FY23. During the year, over 80 senior clinicians were added to the team, including Dr Randeep Guleria as the Chairperson of Internal Medicine, and Respiratory & Sleep Medicine as well as an entire team for our newly launched Institute of Women and Children. We have further strengthened existing departments with the addition of robotic surgery specialists, oncologists and cardiologists. We are also in the process of building a dedicated floor of over 30 beds for the Institute of Women and Children, and a new 50-bed Chemotherapy unit in Gurugram.

Our Lucknow hospital continues to scale up with addition of 191 beds in FY23, including over 90 critical care beds. We also added seven new OTs and have hired over 50 senior clinicians. Towards the end of FY23, we commissioned our Siemens Varian EDGE Radiation Oncology machine – the first in North India – as well as set up a dedicated e-ICU Command Centre to assist in remote critical care management. With a capacity of 601 beds as on March 31, 2023, the Lucknow unit contributed to 21% of the Companys total revenue.

The Patna hospital added over 100 beds and 35+ doctors. It was able to achieve EBITDA breakeven in its first full year of operations. With a capacity of 330 beds as on March 31, 2023, the unit contributed to 6% to the

Companys total revenue. The construction of Medantas Noida hospital is well underway. Once completed, the hospital will have a capacity of 550 beds and is scheduled to open by the end of FY25.

Pharmacy Business

Medanta started in-house outpatient pharmacies at its hospitals in Gurugram, Lucknow, Indore and Ranchi in FY21 and at the Patna hospital in FY22. In FY23, sales from the Pharmacy business increased to H 1,564 million from H 850 million in FY22. Selective expansion of these operations outside hospitals could scale up the present operations significantly.

Medanta Labs

In line with the company strategy of ensuring continuity of care to our patients even outside the hospital, the Company launched Medanta Labs in January 2023. This new initiative aims to bring diagnostic services closer to patients homes, making healthcare more accessible and convenient. The Company has established 22 collection centres covering Gurgaon, Patna, Noida, Lucknow and Indore. These collection centres serve as convenient hubs where patients can easily access a wide range of diagnostic tests and services.

Competitive Strengths

Well Recognised Brand for Clinical Excellence

Medanta has established itself as a renowned healthcare provider, particularly in dealing with complex cases, positioning itself as one of the leading tertiary and quaternary care healthcare institutions of India. The Companys hospitals are equipped with state-of-the-art medical equipment and advanced technology, enabling them to offer a wide range of services across multiple superspecialties. This leadership position has been achieved through the expertise of our experienced doctors who embrace even the sickest patients. The commitment to clinical excellence is deeply ingrained in the organizational culture across all our hospitals.

Differentiated Doctor-led Model

Medanta follows a distinctive ‘doctor-led model that recognizes the pivotal role clinicians play in the decision-making processes. Department heads are granted a significant degree of autonomy to focus on medicine and drive clinical practice with a focus on delivering the highest standard of healthcare. Majority of Medantas doctors (over 90%) work full-time and exclusively at the Companys hospitals. This commitment fosters continuity of care and allows for deep expertise within each speciality.

The department-based approach at Medanta creates an environment of collaboration and teamwork, promoting efficient hospital management and ensuring that patients receive the highest quality of care. To ensure effective governance, a committee comprising the heads of major clinical specialities oversees the day-today operations, ensuring coordination and alignment across departments. This collaborative structure further enhances the comprehensive and integrated approach to healthcare delivery at Medanta.

World Class Infrastructure

Each of our greenfield hospitals has been meticulously designed with the primary objective of creating a safe and efficient environment for patient treatment. Patient-centric design choices have been carefully implemented to enhance the overall experience. To ensure seamless connectivity between doctors and patients, the inpatient and outpatient areas are strategically combined, allowing for convenient access to healthcare services.

Medanta prioritizes maintaining a significant square foot-to-bed ratio in its hospitals. This means dedicating ample square footage to bed areas, ensuring patient comfort and privacy. Moreover, we have made conscious efforts to provide patients with a visual connection to the outside environment. Bringing in natural light and incorporating viewing windows in patient spaces wherever possible contributes to creating a healing environment that promote recovery.

Infection control practices hold great importance in our design and operations. For instance, dedicated air-handling units (AHUs) are installed for all operating theatres and ICUs, ensuring optimal air quality and minimizing the risk of infection. Additionally, we have dedicated transplant rooms with positive air pressure and isolation rooms in each ICU, further enhancing infection-control measures.

Recognizing the procedure-oriented nature of our clinical work, the company maintains a high proportion of OTs, procedure rooms, and ICUs relative to the overall bed strength. This allows us to efficiently accommodate the needs of our patients and provide the necessary infrastructure needed for complex procedures. Modular design principles are incorporated across all units, enabling flexibility and scalability to meet occupancy and specialty requirements.

Advanced Medical Technology

Medanta has a track record of bringing the latest and most advanced global medical technology to India to enable its doctors to deliver worldclass healthcare. Over the years we have invested in some of the most cutting-edge technologies available including the Artis-Zeego Endovascular Surgical Cath Lab, Cyberknife VSI Robotic Radiosurgery System, 384-Slice CT, Da Vinci Robotic System, Femto Laser Cataract Suite, 3-Tesla MRI, Biplane Cath Lab, Brain SUITE and Lokomat in addition to many others to ensure highest standard of care for patients. In FY23, at the Gurugram hospital, we added a new Da Vinci Robot, worlds fastest CT Scan machine and a Next Generation Sequencing system to detect cancer. In Lucknow, we added the Varian Edge LINAC machine for Radiation oncology, which became operational in July 2023. Another LINAC machine is being commissioned for the Patna hospital.

Digital Transformation

Information technology and digital solutions have become indispensable components of the healthcare delivery system, fostering seamless connectivity between various stakeholders such as doctors, patients, nurses, and the administrative staff. At Medanta, we prioritize adoption of new technologies and leveraging digital solutions to optimize business operations and stay at the forefront of patient care.

We have an in-house mobile based EMR (Electronic Medical Records) application for doctors. This patient-centric, real-time care collaboration app empowers clinicians, and nurses to access digital records of patients at any time, from any device, and from any place. This accessibility significantly enhances clinical decision-making processes, ensuring that medical professionals have critical patient information at their fingertips.

We have also developed a patient-oriented mobile application called eCLINIC, which streamlines the appointment management process by facilitating scheduling and offering pre-payment options. Additionally, the eCLINIC app grants patients easy access to a digital copy of their medical records, empowering them to take a more proactive part in managing their health.

Furthermore, in FY23 Medanta Lucknow launched a state-of-the-art e-ICU Command Centre, which aims to transform critical care delivery in remote areas. With this setup, Medanta provides 24x7 near real-time remote patient monitoring services and early intervention solutions. This initiative connects our patients and hospital partners in remote locations with expert clinical teams stationed at our e-ICU, thus addressing the gap in accessing critical care in tier-2 and tier-3 cities.

The success and large-scale acceptance of these digital solutions is evident in the increasing number of downloads, orders, and tele-consultations conducted through our platforms. Our commitment to embracing advanced technology allows us to create a more efficient and patient-centric healthcare experience, positioning us as pioneers in the industry. By continuously seeking innovative ways to integrate technology with delivery of healthcare services, we remain dedicated to improving outcomes for all stakeholders involved.

Scaled Healthcare Network in Attractive Micro Markets

Medanta, originally starting as a single facility located in Gurugram, has significantly expanded its presence and currently operates in five states. As of March 31, 2023, the company has a total bed capacity of 2,697 beds across five locations. In the coming years, Medanta has strategically planned to expand its bed capacity in Lucknow and Patna from 601 to 950 beds, and 330 beds to 650 beds, respectively.

Medantas focus on establishing a growing presence in high population density and underserved areas (especially with respect to quality healthcare), presents a valuable opportunity to address an unmet demand. The companys portfolio reflects a well-scaled healthcare network of hospitals, with Medanta Gurugram serving as the largest single-location private hospital in India. Similarly, the Lucknow hospital is the largest private hospital in the state. We maintain a balanced mix of mature and developing hospitals in the portfolio. With well-planned bed capacity expansions at its existing facilities as well as new hospitals build outs, the company is strategically positioned to deliver sustainable growth in the upcoming years.

Focus on Research and Academics

Medanta places a strong emphasis on clinical research and academics. Established in 2009, our clinical research facility is another driving force behind our high standard

148 of care. We established "The Medanta Institutional Tissue Repository" in 2017 to promote biomarker and other tissue-based research. Doctors associated with our hospitals have published over 1800 peer reviewed indexed journal publications till date. We have on-going research studies and are currently working with Qure.ai to develop artificial intelligence algorithms with the aim of increasing productivity and improving the accuracy and speed of medical diagnoses, particularly in radiology scans. We cover 41 specialties under the Diplomate of National Board ("DNB") and Fellowship in National Board programs with over 120 approved seats (number of students that we can accept to train at our facilities)

Visionary Senior Management Team

Our Company is spearheaded by a committed and seasoned management team. Each member of our team possesses a wealth of industry knowledge, technical expertise, and invaluable management skills, all acquired through their extensive experience in the healthcare industry. By combining their deep understanding of the sector with the Companys unwavering commitment to good corporate governance practices, our management team is equipped to steer us towards sustained growth and even greater accomplishments in the future.

Opportunities and Threats

Opportunities

Inadequate bed capacity and lack of high-quality health infrastructure

There is a huge shortage of healthcare infrastructure across the country. This problem is exponentially greater when it comes to high-quality tertiary or quaternary care hospitals, especially outside of a handful of major metropolitan cities. Indias population, including its increasingly large aging population, improved penetration of government and private health insurance, both, growing incomes and increased incidence of non-communicable diseases will only increase the demand and supply mismatch for quality healthcare. This provides a significant growth opportunity for Medanta. Our proven track record of building institutions comparable to the best in the world and delivering the highest quality of healthcare along with exceptional financial results even outside the traditional markets positions us very well as we move forward.

Planned Bed Capacity Expansion at Existing Facilities

The Company has strategically planned a bed build out at its existing facilities in Lucknow and Patna. Since, majority of the capital expenditure on civil structure has already been incurred, the planned ramp up from 601 beds to 950 beds in Lucknow, and from 330 beds to 650 beds in Patna will be at a faster pace and lower cost. Both these cities are in high-density regions and under-penetrated markets where there is a lack of critical care infrastructure. Medanta with its large-scale hospital ecosystem is well positioned to deliver sustainable growth in the coming years.

New Hospitals Under Development

Medanta Noida Hospital, with a capacity of 550 beds, is under construction and is expected to become operational with 300 beds by end of FY25. This presents the Company with a great opportunity to expand its healthcare infrastructure and service offerings in one of the most sought-after cities to live and work in within the Delhi-NCR. There has been a steady rise in the number of people moving to the city and as a result, Noida is witnessing a boom in housing, commercial projects and infrastructure.

Asset Light Model

In FY23, the company also announced a new 300-bed hospital project in Indore under the asset-light O&M model. This is in line with our strategy to further strengthen our presence in Central India, and help us deliver the award-winning standard of patient care that Medanta is known for. The company continues to evaluate such opportunities in the Northern, East and Central parts of the country to expand its market presence.

Expanding Continuity of Care through Labs and Homecare services

Medanta started the labs business in January of FY23 with 22 collection centres in Gurgaon, Patna, Noida, Lucknow and Indore. Phase 1 of the principle plan is to expand the presence of these new services in states that already have our hospital labs and then scale up to over 10+ labs and 125+ collection centres in phase 2. The large laboratories in each of our existing hospitals are well equipped to service the incremental sample load, allowing us to service patients across life cycle and closer to home. Medanta Homecare Services aims to provide continuity of care to patients with medium- to high-clinical orientation. Our offerings include critical care nursing, stroke rehabilitation, nursing at home, physiotherapy, doctor visits, medical equipment on rent and home delivery of medicines. Overall, Medanta plans to leverage its presence and brand equity in cities where it has hospitals to deepen and widen the Companys presence through various healthcare service offerings across a patients lifecycle.

Improvement in Case Mix

Medantas foray into underserved areas to provide tertiary and quaternary care presents an opportunity to address unmet demand for high quality healthcare. The Companys core belief of moving closer to patients in tier-2 and tier-3 cities and offer advanced facilities will drive the demand for high-end procedures from catchment areas.

Medical Tourism

Medanta Gurugram continues to be one of the leading healthcare service providers to international patients travelling to India. India is emerging as a preferred medical tourism destination and presents an opportunity for Medanta to further leverage its brand and tap into international patients through various channels.

Threats

Shortage of Skilled Medical Professionals

The performance and growth strategies of Medanta hospitals rely on our capability to attract and retain skilled doctors, nurses and other healthcare professionals in a highly competitive industry. The demand for doctors is growing and the availability of specialised medical personnel is limited due to the lengthy training period, which can extend up to 15 years or more for certain specialties.

Medical workforce shortage remains a big challenge with 0.65 physicians per 1,000 people (World Health Organisation standard is 1 per 1,000 people) and 1.3 nurses per 1,000 people. Furthermore, another 1.54 million doctors and 2.4 million nurses will be required to meet Indias growing healthcare needs. The continued shortage of skilled doctors and nurses may potentially impact the Company adversely.

Increasing Competition

The healthcare industry is experiencing a strong demand, leading to increased competition, including in areas where Medanta operates. This influx of new hospitals coupled with shortage of skilled talent may pose some challenges. In addition to heightened competition, the healthcare industry is witnessing consolidation, which can lead to market share concentration. As a result, there may be added pressure on pricing strategies and efforts to recruit top-tier medical professionals. Maintaining a competitive edge amidst these market dynamics is essential for sustained growth and profitability of the Company.

Capital Intensive Industry

The healthcare industry demands a substantial amount of capital investment, mainly due to the high cost associated with acquiring land and constructing specialized interiors for healthcare facilities. Furthermore, finding and retaining a competent clinical staff and well-trained management personnel to run hospitals remains a significant challenge. The substantial upfront costs make it challenging for new entrants to venture into the healthcare sector, and even for existing players, scaling up can be equally difficult.

In addition to the initial investment, the operational cost of running a hospital is also considerably high. This factor becomes particularly critical in the context of highly competitive pricing strategies as it can negatively impact profit margins. As a result, sustaining profitability while providing quality healthcare services becomes a delicate balancing act for healthcare companies.

Changing Government Regulations

The healthcare industry operates under stringent regulations to prioritize patient safety and affordability. Consequently, it remains susceptible to the potential impact of adverse government policies. For instance, policies imposing restrictions on tariff increase, fixed pricing for medical procedures, or an aim to reduce healthcare costs can significantly affect the industrys dynamics.

In India, the healthcare sector is still relatively underdeveloped, and a majority of states fail to meet the WHO standards for the bed-to-population ratio. This indicates a significant gap in healthcare infrastructure and accessibility. As a consequence, any unfavourable government policies have the potential to exert a profound impact not only on the industry as a whole but also on individual companies operating within it, including ours. These policies may further hinder efforts to address the prevailing healthcare challenges and restrict the growth potential of healthcare businesses in the country.

Consolidated Financial Performance

Discussion on financial performance with respect to operational performance.

Key operating metrics: revenue and profitability

Particulars	FY23	FY22	% Change
(H in million)
Total Income	27,592	22,058	25.1%
EBITDA	6,771	4,898	38.3%
PBT	4,493	2806	60.1%
PAT	3,261	1962	66.2%

Medanta has witnessed a robust YoY growth in total income, reaching H 27,592 million – growth of 25.1% – attributable to a combination of factors, including increased inpatient volume, higher occupied bed days, and change in specialty mix.

The Companys Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) was H 6,771 million, an increase of 38.3%. EBITDA margins improved by 230 basis points from 22.2% in FY22 to 24.5% in FY23.

The profit before tax has reached H 4,493 million, registering a YoY growth of 60.1%. Similarly, the profit after tax has recorded an YoY growth of 66.2%, amounting to H 3,261 million. Additionally, the Company has witnessed an improvement in its PAT margins, rising by 290 basis points to 11.8%.

Key operating metrics: Volume, Occupancies and ALOS

Particulars	FY23	FY22	% Change
Total Beds	2,697	2,404	12.2%
Census beds	2,049	1,779	15.2%
Occupancy rate	59%	60%	(2.8)%
ALOS (days)	3.3	3.8	(13.6%)
OPD Volume (‘000)	2,275	1,971	15.4%
IPD Volume (‘000)	135	102	32.0%
ARPOB (H)	59,098	54,547	8.3%

The number of census beds increased by 15.2%, rising from 1,779 to 2,049. This expansion in bed capacity has contributed to an increase in average occupied bed days by 14.1%, resulting in an overall occupancy rate of approximately 59% at the group level.

Moreover, the Average Revenue Per Occupied Bed (ARPOB) has also improved, reaching approximately H 59,098 in FY23. The Average Length of Stay (ALOS) during the fiscal year was 3.3 days. In terms of patient volume, the Outpatient Department (OPD) volume reached 2,275K reflecting a growth of 15.4%. Additionally, the Inpatient Department (IPD) volume has risen to 135K, representing a substantial growth of 32.0%.

Revenue mixes across all complex specialities

Particulars	FY23	FY22	% Change
Heart	24%	21%	3%
Digestive	12%	10%	2%
Cancer	12%	11%	1%
Neuro	11%	11%	-
Kidney and	8%	7%	1%
Urology
Internal Medicine	7%	11%	-4%
Orthopaedics	5%	4%	1%
Liver transplant	4%	4%	-
Others	17%	21%	-4%

In FY23, the Heart specialty contributed 24% of the total revenue, indicating an increase of 3%. The Digestive specialty accounted for 12% of the revenue in FY23, an increase of 2%. Similarly, the Cancer specialty constituted 12% of the revenue in FY23, exhibiting a 1% increase from FY22.

The Neuro specialty maintained a consistent revenue share of 11% in both FY23 and FY22. Meanwhile, the Kidney and Urology specialty observed an increase of 1% in FY23, contributing 8% of the revenue in FY23. The Internal Medicine specialty experienced a decline of 4% in FY23, representing 7% of the revenue compared to 11% in FY22, which was driven by higher number of COVID-19 cases. On the other hand, the Ortho specialty demonstrated a 1% increase in FY23, contributing 5% of the revenue. The revenue share of the Liver transplant specialty remained stable at 4% in both FY23 and FY22. The Others category, accounted for 17% of the revenue in FY23, indicating a decrease of 4% from FY22.

Revenue contribution

Particulars	FY23	FY22	% Change
GHL (Gurugram, Indore, Ranchi)	73%	81%	(8)%
Lucknow	21%	18%	3%
Patna	6%	1%	5%

Medanta continues to diversify its revenue and reduce dependence on its flagship facility in Gurugram. Both Lucknow and Panta are classified as developing units and their contribution to top line and bottom line continues to improve with maturity. Bed build out is planned at these units with Lucknow to expand from 601 beds to 950 beds whereas Patna to expand from 330 beds to 650 in the next two to three years.

Bed distribution

Location	Total Beds1	ICU Beds1
Gurugram	1,391	271
Lucknow	601	202
Indore	175	53
Ranchi	200	54
Patna	330	57

In Gurugram, the hospital facility consists of a total of 1,391 beds, including 271 beds specifically designated for intensive care units (ICU). In Lucknow, the hospital has 601 beds available, with 202 beds allocated for ICU. The Ranchi hospital has a capacity of 200 beds, out of which 54 beds are dedicated for ICU use. The Indore hospital has 175 beds with 53 beds designated for ICU use. The Patna hospital has 330 beds, including 57 ICU beds.

A majority of the Companys revenue comes from IPD, which comprised 83% of total revenue in FY23.

Particulars	FY23	FY22	% Change
IPD	83%	83%	-
OPD	17%	17%	-

Until FY21, Medanta outsourced its OPD pharmacies operations to third-party partners. However, during the pandemic, the Company changed the model to in-house OPD pharmacies, which now operate at all of its facilities, including clinics, adding to its revenue stream. In FY23, OPD pharmacy sales contributed H 850 million, up from H 536 million in FY22.

Key Financial Ratios

Ratio	Measurement unit	As at 31 March 2023 Ratio	As at 31 March 2022 Ratio	Change %
Current ratio	Times	2.76	1.94	42.27%
Inventory turnover ratio	Times	10.99	11.66	(5.75)%
Trade receivables turnover ratio	Times	14.39	13.81	4.20%
Trade payables turnover ratio	Times	8.80	8.71	1.03%
Debt-equity ratio	Times	0.35	0.52	(32.69)%
Debt service coverage ratio	Times	4.10	3.98	3.02%
Net profit margins*	Percentage	12.10%	9.05%	33.70%
Return on equity ratio	Percentage	16.13%	13.09%	23.22%
Return on capital employed	Percentage	14.45%	12.88%	12.19%

*Net profit margin is calculated on revenue from operations

Note:

1) All beds are installed beds as at March 31, 2023

Risk Management

Key risks	Description	Mitigation
COVID-related risks	COVID measures, including travel restrictions, had severely affected the Companys operations in FY21 and FY22. New strains and waves of infections in future may impact the destination healthcare business.	Post-Covid, the destination healthcare business has revived significantly. The Companys safe and robust safety protocols, with dedicated zones and facilities for international patients continue to make it a preferred healthcare destination for patients across 130 countries.
	Increasing operating costs and lower occupancy rate could harm the Companys financial margins and operations.	The Company remains steadfast on its value of ‘Har ek jaan anmol, serving underserved patients with affordable and quality treatment. In last few years, the company has diversified its presence from Delhi/
Increasing non-variable costs		NCR to Lucknow and Patna with large scale hospitals and serving the underserved markets. Subsequently it continues to deliver healthy EBITDA and profit margins to sustain its growth.
Risks associated with new facilities	Delays in planning, constructing, developing and completing hospitals may hinder the Company from reaching expected operating levels and targeted returns on investments, even after completion.	Historically, the Company has successfully commercialised facilities on time and in a phased manner. The proposed facilities are on-track to be operational on-time and contribute to the Companys growth.
Dependence on healthcare professionals	Due to its high reliance on doctors, nurses and other healthcare professionals, the Companys business will be significantly impacted if it is unable to attract or retain such professionals.	Medanta continues to attract the best of medical professionals, not only from India, but across the world. Additionally, the Companys academia and training structure provides a foundation to sustain its increasing demand for medical team and doctors across existing and new facilities.
Increasing competition	Competition continues to intensify, which may lead to lower occupancy levels as well as challenges in talent acquisition.	Medanta is a trusted healthcare destination for high- quality healthcare. Its integrated model of multi- speciality services under one-roof, expanding access to primary care, exceptional clinical excellence and improving patient education positions Medanta as the preferred healthcare stop for patients.
Inherent medical and legal risks	The Company faces medical and legal risks, such as negative publicity, failure to provide quality services, maintain patient satisfaction, or a high mortality rate may damage the Companys reputation.	The Companys continued focus on providing quality healthcare, investing in improving its offerings and strengthening safety protocols remain its competitive strengths. The strong governance and transparent practices help mitigate any negative publicity.
Leased Facility of Leased Land	The Companys hospital in Patna, Indore, Ranchi and Noida operates on land parcels that are neither owned nor leased to them perpetually. Breaching terms or non-renewal of the lease agreement may disrupt business operations.	While the facility at Gurugram and Lucknow hospital is on owned land, the Patna facility is on a PPP model, with state-government being the participant. Indore is on 27 years lease from February 1, 2014, Ranchi is on lease for 15 years from June 8, 2015 and Noida is on lease for 90 years from January 18, 2016. The company remains committed to ensure that all these hospitals are being managed efficiently and continues to deliver profitable growth.
		However, any non-renewal of such arrangements or the renewal of any such arrangements on unfavourable terms could lead to disruptions to our business and have a material adverse impact on our results of operations.

Human resource

The provision of exceptional healthcare services requires close collaboration with medical professionals to ensure clinical excellence. As the Companys success is largely dependent on the quality of medical professionals it hires, it focuses on engaging renowned surgeons and physicians in their respective fields to operate and develop the Companys healthcare facilities. Medanta aspires to enhance its integrated human resources management system for better recruitment, training and retention of high-quality medical professionals.

Also, the Company collaborates with schools and medical institutions to source entry-level medical professionals while also engaging professional medical talent recruitment agencies and internal referrals to attract experienced clinicians. As of March 31, 2023, the Company had 9,380 full-time employees and retainer-based staff under its management.

Along with regular training sessions at its hospitals, the Company intends to send select doctors, technicians and nurses to the hospitals and medical institutions it collaborates with for additional training.

Incentivising and retaining its medical professionals is another priority area for Medanta. The Company has a performance-based compensation and review system to reward and promote service excellence. Going forward, the Company aims to leverage the expertise of its experienced specialists to improve its brand recall, which would aid in attracting more patients.

Adequacy of internal control systems

Your Company has adequate internal controls and processes designed specifically for the size and complexity of the business operations. Comprehensive policies, guidelines and procedures are defined for all the business processes for orderly and efficient conduct of the business including safeguarding of assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The internal control framework is supplemented by internal audit plan. The internal audit plan is dynamic, and aligned to the business objectives of the Company.

Outlook

The outlook looks encouraging underpinned by the consistently increasing demand for healthcare services and the robust strengths of our business model. With our strategic positioning in attractive markets, Medanta is well-equipped to take advantage of this growing demand by implementing carefully designed strategies to gradually expand our bed capacity in the coming years. Our network of hospitals has gained a strong reputation as a leading destination for specialized care, attracting patients from various states who require treatment for complex procedures. Medanta aims to make a significant impact on the lives of patients in the regions it serves.

Forward-looking statements

Statements forming part of the Management Discussion and Analysis Report covered in this Report may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include demand and supply conditions, changes in government regulations, exchange rates, tax laws, monsoons, natural hazards, national and global economic developments and other factors.