MANAGEMENT DISCUSSION AND ANALYSIS REPORT
OVERVIEW OF INDIAN ECONOMY
Strong economic growth in the first quarter of FY 2022-23 helped India overcome the UK
to become the fifth-largest economy after it recovered from repeated waves of COVID-19
pandemic shock. Real GDP in the first quarter of 2022-23 is currently about 4% higher than
its corresponding 2019-20, indicating a strong start for Indias recovery from the
pandemic. Given the release of pent-up demand and the widespread vaccination coverage, the
contact-intensive services sector will probably be the main driver of development in
2022-2023. Rising employment and substantially increasing private consumption, supported
by rising consumer sentiment, will support GDP growth in the coming months.
Future capital spending of the government in the economy is expected to be supported by
factors such as tax buoyancy, the streamlined tax system with low rates, a thorough
assessment and rationalisation of the tariff structure, and the digitization of tax
filing. In the medium run, increased capital spending on infrastructure and asset-building
projects is set to increase growth multipliers, and with the revival in monsoon and the
Kharif sowing, agriculture is also picking up momentum. The contactbased services sector
has largely demonstrated promise to boost growth by unleashing the pent-up demand over the
period of April-September 2022. The sectors success is being captured by a number of HFIs
(High-Frequency Indicators) that are performing well, indicating the beginnings of a
comeback.
India has emerged as the fastest-growing major economy in the world and is expected to
be one of the top three economic powers in the world over the next 10-15 years, backed by
its robust democracy and strong partnerships
Over the years, the Indian government has introduced many initiatives to strengthen the
nations economy. The Indian government has been effective in developing policies and
programmes that are not only beneficial for citizens to improve their financial stability
but also for the overall growth of the economy. Over recent decades, Indias rapid
economic growth has led to a substantial increase in its demand for exports. Besides this,
a number of the governments flagship programmes, including Make in India, Start-up India,
Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban
Transformation, are aimed at creating immense opportunities in India.
The Government of India is planning to increase public health spending to 2.5% of the
countrys GDP by 2025. Indias competitive advantage also lies in the increased success
rate of Indian companies in getting Abbreviated New Drug Application (ANDA) approvals.
India also offers vast opportunities in R&D as well as medical tourism. To sum up,
there are vast opportunities for investment in healthcare infrastructure in both urban and
rural India.
OUTLOOK
In the second quarter of FY 2022-23, the growth momentum of the first quarter was
sustained, and high-frequency indicators (HFIs) performed well in July and August of 2022.
Indias comparatively strong position in the external sector reflects the countrys
generally positive outlook for economic growth and rising employment rates. India ranked
fifth in foreign direct investment inflows among the developed and developing nations
listed for the first quarter of 2022.
Indias economic story during the first half of the current financial year highlighted
the unwavering support the government gave to its capital expenditure, which, in FY
2022-23 (until August 2022), stood 46.8% higher than the same period last year. The ratio
of revenue expenditure to capital outlay decreased from 6.4 in the previous year to 4.5 in
the current year, signaling a clear change in favour of higher-quality spending. Stronger
revenue generation as a result of improved tax compliance, increased profitability of the
company, and increasing economic activity also contributed to rising capital spending
levels.
Despite the continued global slowdown, Indias exports climbed at the second highest
rate this quarter. With a reduction in port congestion, supply networks are being
restored. The CPI-C and WPI inflation reduction from April 2022 already reflects the
impact. In August 2022, CPI-C inflation was 7.0%, down from 7.8% in April 2022. Similarly,
WPI inflation has decreased from 15.4% in April 2022 to 12.4% in August 2022. With a
proactive set of administrative actions by the government, flexible monetary policy, and a
softening of global commodity prices and supply-chain bottlenecks, inflationary pressures
in India look to be on the decline overall.
(Source: IBEF, CNBC, Economic Times)
1. INDUSTRY STRUCTURE AND DEVELOPMENT
Healthcare has become one of Indias largest sectors, both in terms of revenue and
employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing,
telemedicine, medical tourism, health insurance and medical equipment. The Indian
healthcare sector is growing at a brisk pace due to its strengthening coverage, services,
and increasing expenditure by public as well private players.
Indias healthcare delivery system is categorised into two major components - public
and private. The government, i.e., public healthcare system, comprises limited secondary
and tertiary care institutions in key cities and focuses on providing basic healthcare
facilities in the form of Primary Healthcare Centers (PHCs) in rural areas. The private
sector provides majority of secondary, tertiary, and quaternary care institutions with
major concentration in metros, tier-I, and tier-II cities.
Indias competitive advantage lies in its large pool of well-trained medical
professionals. India is also cost competitive compared to its peers in Asia and western
countries. The cost of surgery in India is about one-tenth of that in the US or Western
Europe. The low cost of medical services has resulted in a rise in the countrys medical
tourism, attracting patients from across the world. Moreover, India has emerged as a hub
for R&D activities for international players due to its relatively low cost of
clinical research.
Market Size
Indias public expenditure on healthcare touched 2.1 % of GDP in FY23 and 2.2%
in FY22, against 1.6% in FY21, as per the Economic Survey 2022-23. The Indian medical
tourism market was valued at US$ 2.89 billion in 2020 and is expected to reach US$ 13.42
billion by 2026. According to India Tourism Statistics at a Glance 2020 report, close to
697,300 foreign tourists came for medical treatment in India in FY19. India has been
ranked tenth in the Medical Tourism Index (MTI) for 202021 out of 46 destinations by the
Medical Tourism Association.
The e-health market size is estimated to reach US$ 10.6 billion by 2025. As per
information provided to the Lok Sabha by the Minister of Health & Family Welfare, Dr.
Bharati Pravin Pawar, the doctor population ratio in the country is 1:854, assuming 80%
availability of 12.68 lakh registered allopathic doctors and 5.65 lakh AYUSH doctors.
Road Ahead
Indias healthcare sector is extremely diversified and is full of opportunities in
every segment, which includes providers, payers, and medical technology. With the increase
in the competition, businesses are looking to explore the latest dynamics and trends which
will have a positive impact on their business. The hospital industry in India is forecast
to increase to Rs. 8.6 trillion (US$ 132.84 billion) by FY22 from Rs. 4 trillion (US$
61.79 billion) in FY17 at a CAGR of 16-17%.
India is a land full of opportunities for players in the medical devices industry. The
country has also become one of the leading destinations for high-end diagnostic services
with tremendous capital investment for advanced diagnostic facilities, thus catering to a
greater proportion of the population. Besides, Indian medical service consumers have
become more conscious towards their healthcare upkeep. Rising income levels, an ageing
population, growing health awareness and a changing attitude towards preventive healthcare
is expected to boost healthcare services demand in the future. Greater penetration of
health insurance aided the rise in healthcare spending, a trend likely to intensify in the
coming decade. The Government aims to develop India as a global healthcare hub and is
planning to increase public health spending to 2.5% of the countrys GDP by 2025.
(Source: Money Control, Statista, IBEF)
2. OPPORTUNITIES AND THREATS
A growing middle-class, coupled with rising burden of new diseases, are boosting the
demand for health insurance coverage. With increasing demand for affordable and quality
healthcare, penetration of health insurance is poised to expand in the coming years. The
health insurance portfolio of insurers increased by 25.9%, with rise in retail health
policies of 17.3% and group policies of 30.1%. By leveraging strategic partnerships,
WhatsApp plans to debut opportunities for health insurance and micro-pension products in
India. WhatsApp plans to collaborate for the Sachet-Health Insurance Programme with the
State Bank of India (SBI) General and plans to work with HDFC Pension to introduce the
National Pension Scheme.
India currently holds the fourth position in attracting VC funding to the health-tech
sector, with investments of US$ 4.4 billion between 2016 and 2021, with US$ 1.9 invested
in 2021 alone. Over the years, India has made strategic interventions in National Health
Mission and the national disease control programmes to ensure quality and affordable
healthcare for all.
3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:
The Company has delivered a satisfactory financial and operating performance for
2022-23. The company operates in the single segment i.e. Health Care and Hospital. The
total revenue from operations is Rs.2,350.17 lakhs in FY 2022-23 as compared to
Rs.3,281.54 lakhs in FY 2021-22. The Profit before interest and taxes stands Rs.310.83
lakhs for the FY 2022-23 as against Rs.710.90 lakhs in 2021-22.
4. OUTLOOK FOR FY 23-24
• We plan to expand our hospital network into markets;
• We are planning to start OPD cum Diagnostic centre in the small towns around
Ahmedabad.
• We intend to maximize our operational efficiency by achieving greater
integration and by implementing a stronger supply chain management.
5. RISK AND CONCERN
The Companys ability to foresee and manage business risks is crucial in achieving
favourable results. Risk management at Global Longlife Hospital and Research Limited is an
integral part of the business, focusing to mitigate the adverse impact of risks on
business objectives. The Company has laid down a well-defined risk management procedure
covering the risk identification, risk exposure, potential impact and risk mitigation
process. The Board periodically reviews the risks and suggests steps to be taken to
control and mitigate the same through a properly defined framework.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUECY
The Company has an adequate internal control system adopted for operating procedures,
policies and process guidelines. The guidelines are well-documented with clearly defined
authority limits corresponding with the level of responsibility for each functional area.
Further, the Company has budgetary control system to monitor expenditure against approved
budgets on an ongoing basis. The Companys robust internal audit programme which works to
conduct a risk-based audit not only tests the adherence to laid down policies and
procedures but also suggests improvements in the current processes and systems.
7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Financial performance of the company during the FY 2022-23 as compared to FY
20212022 is as under:
|
|
|
(Rs. In Lakhs) |
| Particulars |
2022-2023 |
2021-2022 |
% of Increase/Decrease |
| Gross Revenue from operations |
2350.172 |
3281.54 |
-28.38% |
| Profit Before Tax |
270.776 |
571.01 |
-52.58% |
| Profit after Tax |
182.746 |
357.39 |
-48.86% |
Operational Performance
The Company continued to focus on improving operational efficiency leading to better
returns for the shareholders. Further, the company has significantly enhanced its
operational performance by establishing prudent risk management framework.
8. MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONSHIP FRONT, INCLUDING
NUMBER OF PEPOLE EMPLOYED
Human resource practices and policies at Global Longlife Hospital and Research Limited
ensure that all employees, wherever they work, whatever their role is, are always treated
equally, fairly and respectfully. We maintain consistent and transparent diversity
policies.
Our human resource team believes in personnel management, which involves planning,
organising, directing and controlling of the recruitment and resource management, training
& development, compensation, integration and maintenance of people for the purpose of
contributing to organizational, individual and social goals.
People power is one of the pillars of success of company. As on 31st March,
2023 the Company employs 103 employees. Going ahead, the Company aims to retain and
develop the existing employees and align their goals with the common business vision and
mission.
9. THE DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
During the financial year, the details of significant change in the key financial
ratios i.e. change of more than 25% as compared to the previous year along with the
detailed explanation is summarized below on standalone basis:
| Sr. No. |
Key Financial Ratios |
F.Y. 2022-23 |
F.Y. 2021-22 |
Changes in % |
Reasons for change |
| 1. |
Debtors Turnover Ratio |
2.53 |
3.92 |
-35.53% |
Due to reduction in turnover as compare to previous year. |
| 2. |
Inventory Turnover Ratio |
27.68 |
38.72 |
-28.52% |
Due to reduction in turnover as compare to previous year. |
| 3. |
Interest Coverage Ratio (in times) |
7.76 |
5.08 |
52.72% |
Due to reduction in profit |
| 4. |
Current Ratio |
4.28 |
0.82 |
419.04% |
Due to increase of current assets on accounts of advance payment. |
| 5. |
Debt Equity Ratio (in times) |
0.14 |
0.51 |
-71.80% |
Due to increase in equity share capital |
| 6. |
Operating Margin (in %) |
18.19% |
25.15% |
-27.67% |
Due to reduction in turnover as compare to previous year. |
| 7. |
Net Profit Margin (in %) |
7.77% |
10.89% |
-28.60% |
Due to reduction in profit |
10. The Return on Net Worth during the FY 2022-23 was 17.40 % as compared to
51.00 % in FY 2021-22. The decrease of 65.91% in the return on Net Worth is mainly
due to decrease in profit during the FY 2022-23.
11. CAUTIONARY STATEMENT
Statement made in the Management Discussion and Analysis describing the various parts
may be "forward looking statement" within the meaning of application securities
laws and regulations. The actual result may differ from those expectations depending upon
the economic conditions, changes in Government regulation and amendments in tax laws and
other internal and external factors.
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