Global Longlife Hospital and Research Ltd Management Discussions

The Indian economy is on a strong wicket and stable footing, demonstrating resilience in the face of geopolitical challenges. The Indian economy has consolidated its post-Covid recovery with policymakers - fiscal and monetary - ensuring economic and financial stability. Nonetheless, change is the only constant for a country with high growth aspirations. For the recovery to be sustained, there has to be heavy lifting on the domestic front because the environment has become extraordinarily difficult to reach agreements on key global issues such as trade, investment and climate.

High economic growth in FY24 came on the heels of growth rates of 9.7% and 7.0%, respectively, in the previous two financial years. The headline inflation rate is largely under control, although the inflation rate of some specific food items is elevated. The trade deficit was lower in FY24 than in FY23, and the current account deficit for the year is around 0.7% of GDP. In fact, the current account registered a surplus in the last quarter of the financial year. Foreign exchange reserves are ample. Public investment has sustained capital formation in the last several years even as the private sector shed its balance sheet blues and began investing in FY22. Now, it has to receive the baton from the public sector and sustain the investment momentum in the economy. The signs are encouraging.

For a resilient economy, the health sector is vital. A sound healthcare system is interconnected with long-term factors responsible for inclusive growth, such as ensuring the quality of human capital and labour productivity, higher household savings, avoiding the poverty trap due to catastrophic health expenditure, and building the capability to withstand any health shocks such as COVID-19. In that spirit, the Indian health system has been consistently revamped.

The Government is committed to ensuring sound health and well-being of all ages through a preventive and promotive healthcare orientation in all developmental policies and universal access to good quality healthcare services. To this end, the Government is implementing various schemes and programmes and initiatives such as:

1. Ayushman Bharat Pradhan Mantri Jan Aarogya Y oj ana (AB-PMJAY) (2018)

2. PM Jan Aushadhi Kendras

3. AMRIT (Affordable Medicines and Reliable Implants for Treatment)

4. Ayushman Bhav Campaign (Sep 2023)

5. Ayushman Bharat Digital Mission (ABDM) (2021)

6. eSanjeevani (2019)

(Source: Economic Survey)

OUTLOOK

Healthcare innovation in India, currently a US$ 30 billion opportunity led by pharma services and healthtech, is seeing increased investment in medtech and biotech. With rising consumerization of health, global value chain changes, and regulatory support, this innovation opportunity is projected to reach US$ 60 billion by FY 2028, alongside ecosystem shifts like consolidation and new partnerships.

The Indian Healthcare industry continued its healthy growth in 2022 and reached a value of US$ 372 billion driven by both the private sector and the government. The e-health market size is estimated to reach US$ 10.6 billion by 2025. The Indian hospital sector, valued at US$ 95.86 billion in FY21, is expected to reach US$ 221.50 billion by FY27, growing at a CAGR of 18.24%.

As of 2024, the Indian healthcare sector is one of Indias largest employers as it employs a total of 7.5 million people. Progress in telemedicine, virtual assistants, and data analytics is expected to create 2.73.5 million new tech jobs.The healthcare sector, as of 2024, is one of Indias largest employers, employing a total of 7.5 million people. A recent research report predicts that the integration of Artificial Intelligence (AI) within the Indian healthcare sector will create nearly 3 million new jobs by 2028. The number of allopathic doctors with recognised medical qualifications (under the I.M.C Act) registered with state medical councils/national medical council increased to 1.3 million in November 2022, from 0.83 million in 2010. As of 2023, the number medical colleges in India stood at 706.

(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

In the Interim Union Budget 2024-25, the government allocated Rs. 90,659 crore (US$ 10.93 billion) to the Ministry of Health and Family Welfare (MoHFW). The Indian government is planning to introduce a credit incentive programme worth Rs. 50,000 crores (US$ 6.8 billion) to boost the countrys healthcare infrastructure.

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 Health Ministry aims to reach 2.5% by FY25.

The Indian healthcare market, which was valued at US$ 110 billion in 2016 is now projected to reach US$ 638 billion by 2025. The healthcare sector, as of 2024, is one of Indias largest employers, employing a total of 7.5 million people. 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

Healthcare has become one of Indias largest sectors, both in terms of revenue and employment. The industry is growing at a tremendous pace owing to its strengthening coverage, service and increasing expenditure by public as well private players.

The healthcare sector, as of 2024, is one of Indias largest employers, employing a total of 7.5 million people. The demand for Indian healthcare professionals is expected to double nationally and globally by 2030 due to a shortage of healthcare workers in India, where there are only 1.7 nurses per 1,000 people and a doctor-to-patient ratio of 1:1,500 nationwide.

The Government aims to develop India as a global healthcare hub. Public health surveillance in India will further strengthen the health systems. In the Interim Union Budget 2024-25, the government allocated Rs. 90,659 crores (US$ 10.93 billion) to the Ministry of Health and Family Welfare (MoHFW). In March 2021, the Parliament passed the National Commission for Allied & Healthcare Professions Bill 2021, which aims to create a body that will regulate and maintain educational and service standards for healthcare professionals.

Availability of a large pool of welltrained medical professionals in the country. The number of allopathic doctors with recognised medical qualifications (under the I.M.C Act) registered with state medical councils/national medical councils increased to 1.308 million in June 2022, from 0.83 million in 2010.

(Source: IEBF)

2. OPPORTUNITIES AND THREATS

The Government of India approved the continuation of the ‘National Health Mission with a budget of Rs. 36,785 crores (US$ 4.44 billion) under the Union Budget 2023-24. Over the years, India has made strategic interventions in the National Health Mission and the national disease control programmes to ensure quality and affordable healthcare for all and over US$ 500 billion is expected to be spent on medical infrastructure by 2030.

In FY24, premiums underwritten by health insurance companies grew to Rs. 109,006.79 crore (US$ 13.07 billion). The health segment has a 37.62% share in the total gross written premiums earned in the country. During April 2021-January 2022, health insurance portfolio of insurers increased by 25.9%, with rise in retail health policies of 17.3% and group policies of 30.1%.

Indias medical tourism is set to exceed pre-pandemic levels, reaching 7.3 million tourists in CY 2024. Major hospital chains like Max Healthcare, Fortis Healthcare, and Apollo Hospitals are driving this growth. With top-notch infrastructure and skilled experts, medical tourism is expected to contribute 10-12% to hospital revenue, outpacing industry growth.

Many big players such as Apollo, VLCC and Manipal Group are setting up wellness centres across India with traditional healthcare remedies as the focus of their offerings. In January 2021, the PM Cares fund allocated Rs. 201.58 crore (US$ 27.55 million) for the construction of 162 additional dedicated pressure swing adsorption medical oxygen generation plants inside the countrys public health facilities. The AI in Healthcare Market is projected to grow from US$ 14.6 billion in 2023 to US$ 102.7 billion by 2028

3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:

The company operates in the single segment i.e. Health Care and Hospital. The total revenue from operations is ? 1351.44 lakhs in FY 2023-24 as compared to ? 2,350.17 lakhs in FY 2022-23. The loss before interest and taxes is ? 226.59 in the FY 2023-24 as against profit of ? 270.78 lakhs for the FY 2022-23

4. OUTLOOK FOR FY 24-25

• 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 2023-24 as compared to FY 20222023 is as under:

(Rs. In Lakhs)

Particulars	2023-2024	2022-2023	% of Increase/Decrease
Gross Revenue from operations	1351.45	2350.172	73.90
Profit Before Tax	(226.59)	270.776	-183.68
Profit after Tax	(218.81)	182.746	-219.73

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 31^st March, 2024 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. 2023-24	F.Y. 2022-23	Changes in %	Reasons for change
1.	Debtors Turnover Ratio	2.32	2.53	-8.11%	Due to reduction in turnover as compare to previous year.
2.	Inventory Turnover Ratio	21.58	27.68	-22.04%	Due to reduction in turnover as compare to previous year.
3.	Interest Coverage Ratio (in times)	-2.24	0.40	-654.32%	Due to reduction in profit and increase in Debt
4.	Current Ratio	0.32	4.28	-92.56%	Due to decrease of current assets and increase in current liabilities
5.	Debt Equity Ratio (in times)	0.49	0.14	239.73%	Due to increase in Debt
6.	Operating Margin (in %)	-2.30%	17.16%	113.40%	Due to reduction in turnover as compare to previous year.
7.	Net Profit Margin (in %)	-16.19%	7.78%	-308.22%	Due to reduction in profit

10. The Return on Net Worth during the FY 2023-24 was -20.84 % as compared to 17.40 % in FY 2022-23. The decline in the return on Net Worth is mainly due to loss incurred in the FY 202324.

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.