GPT Healthcare Ltd Management Discussions

Indian economic review

Indias GDP growth moderated to 6.5% in FY 2024-25, from 9.2% in the previous year, owing to slower manufacturing and a dip in net investments. However, macroeconomic fundamentals remained strong with easing inflation (CPI at 4.63%) and robust foreign exchange reserves at $676 billion. Government policies such as substantial personal tax cuts, a record Rs. 11.21 lakh crore capital expenditure push, and expected salary hikes from the upcoming Pay Commission are likely to bolster consumption, indirectly benefiting healthcare demand. Rural consumption showed a revival, and private final consumption expenditure grew 7.3%, further reinforcing demand for essential services like healthcare.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY25 (9.0% in FY24), driven by public administration, defense and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the construction sector expanded at 9.4% in FY25, slowing from 10.4% in the previous year.

From a demand perspective, private final consumption expenditure exhibited robust growth, achieving 7.2% in FY25, surpassing the previous financial year rate of 5.6%.

The Nifty 50 and Sensex recorded their weakest annual performance in two years, rising 5.3% and 7.5% during the year under review, respectively.

Indias healthcare market stood at US$ 372 billion in 2024 and is expected to reach US$ 638 billion by 2025, driven by higher investments, rising demand, and digital transformation. Hospitals are central to this growth, attracting investments at 20x–30x EBITDA, particularly in high-demand specialties like oncology and cardiology. Workforce shortages and projected doubling of healthcare professional demand by 2030 highlight the need for capacity building. Budget allocations of Rs. 99,858 crore to the healthcare sector, including Rs. 9,406 crore to Ayushman Bharat and Rs. 37,226 crore to the National Health Mission, underline the governments focus on accessible and technology-enabled healthcare delivery.

Regional and industry developments: Eastern India is emerging as a major medical tourism hub, with Kolkata and Agartala serving as entry points for international patients, particularly from Bangladesh, Nepal and Bhutan. Medical tourism is expected to reach USD 13.42 billion by 2026, offering growth opportunities for hospitals in the region. The Northeast has seen increased healthcare access through government schemes like Ayushman Bharat and private investments. Overall, the outlook remains positive for hospital businesses, supported by favorable demographics, sustained infrastructure investments, rising medical awareness, and a policy environment conducive to growth.

GPT Healthcare Limited is a leading healthcare provider in Eastern India, operating strategically located, full-service hospitals that offer high-quality specialty care. Backed by advanced infrastructure and a skilled team, the Company emphasizes operational efficiency, growth, and patient-centric service. With integrated diagnostics and a strong brand presence, GPT Healthcare delivers affordable, accessible care in an under-penetrated market. Its early-mover advantage and strong medical professional network position it to meet rising healthcare demand in the region.

Looking ahead, the company is well-positioned to capitalize on its strategic presence in Eastern India, particularly in under-penetrated and high-potential markets such as West Bengal and the Northeast. With strong brand equity, a skilled medical workforce, and a robust tertiary care model, the company aims to drive growth through operational efficiency, asset-light expansion, and technological advancements, including robotic surgery and digital HMIS systems. Despite challenges like rising competition, the need for talent retention and evolving technology, the outlook remains positive, supported by government healthcare initiatives, growing medical tourism and increasing demand for affordable, quality care. While EBITDA margins have seen a short-term dip, the steady growth in PAT and focus on optimizing hospital utilization and expanding specialty services indicate a firm foundation for sustainable long-term performance.

Strategic presence in Eastern India with underpenetrated markets

Enhanced brand equity through well-located hospitals in densly populated areas

Skilled medical workforce and high-volume tertiary care model

Digital transformation via HMIS for seamless patient experience

Susceptibility to financial market volatility

Data security and patient confidentiality risks

Profitability dependent on cost efficiency of medical supplies

Diverse service portfolio and specialist consultant collaborations

Growth potential from increasing medical tourism

Government healthcare initiatives in East and Northeast India

Ability to serve underserved markets with affordable care

Intense competition from established and emerging players

Need for continuous adaptation to rapid medical technology change

Challenges in attracting and retaining skilled professionals

Enhancing healthcare quality and financial performance: Committed to continuous improvement in healthcare services while ensuring strong financial returns.

Strengthening existing hospitals: Expanding specialty mix, deepening expertise, and introducing new services to meet increasing demand.

Asset-light expansion: Exploring revenue-sharing and management-based models to accelerate growth with minimal operational risks.

Optimizing hospital efficiency: Increasing occupancy rates, improving equipment utilisation, and expanding tertiary care, preventive healthcare, and community outreach programs.

Adopting advanced medical technologies: Integrating cutting-edge treatments, including robotic surgery, which has facilitated over 239 procedures in FY 2025 at Salt Lake hospital.

The healthcare sector is gaining increasing importance in Indias economic and social development. However, policy focus in areas such as strengthening public health infrastructure, improving insurance penetration, still low across much of the population, and expanding the Ayushman Bharat scheme remains limited. Moreover, proposals like GST exemption on health insurance premiums and increased health-related allocations in the Union Budget could act as vital enablers. These steps would not only enhance access and affordability but also complement Indias broader growth momentum by promoting a healthier and more productive population.

The Company is projected to deliver a robust financial performance, with revenue from operations (growing at a CAGR of 0.86 %) over FY 2024 to FY 2025. The Companys PAT has increased from Rs. 4,778.50 lakhs in FY24 to Rs. 4,987.40 lakhs in FY25.

EBITDA growth has decreased from 16.35% in FY24 to -1.38 % in FY25. The growth in hospital revenue has also decreased from 10.85% in FY24 to 1.72% in FY25.

IT system failures and cybersecurity risks: The Company is vulnerable to failures in its information technology systems, which could disrupt operations, impact patient care, and compromise sensitive data.

Mitigation: To minimize these risks, the Company invested in robust IT infrastructure, regular system upgrades, and cybersecurity measures. A dedicated IT team ensures proactive monitoring, timely maintenance, and quick recovery protocols in case of system failures.

Dependency on third-party suppliers: Reliance on third-party suppliers for medical supplies and equipment may lead to disruptions if they fail to meet obligations, affecting operations and financial performance.

Mitigation: The Company maintained a strong relationship with multiple suppliers, negotiates long-term contracts, and ensures inventory management strategies to mitigate supply chain disruptions.

Risk of payment delays: Delayed payments from insurance companies could impact cash flow, affecting financial stability and operational efficiency.

Mitigation: The Company enforces strict billing policies, provides multiple payment options, and partners with insurers and financial institutions to ensure timely collections.

Risk of low bed occupancy: Lower bed occupancy rates compared to peers may impact revenue generation and hinder returns on capital investments, affecting profitability.

Mitigation: The Company focuses on expanding specialised services, strengthening referral networks, and enhancing patient outreach programs to improve occupancy levels. Efficient hospital management and service diversification further support sustainable growth.

The Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2025. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. Internal Audit is carried out in accordance with auditing standards to review design and effectiveness of internal control system & procedures to manage risks, operation of monitoring control, compliance with relevant policies & procedure and recommend improvement in processes and procedure and the report is placed in the Audit Committee.

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IND AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time notified under Section 133 of Companies Act, 2013, (the ‘Act) and other relevant provisions of the Act. The Company maintains all its records in ERP system (SAP) and the audit trail have been enabled through the year as well in the ERP system.

The Audit Committee of the Board of Directors regularly reviews execution of Audit Plan, the adequacy & effectiveness of internal audit systems, and monitors implementation of internal audit recommendations including those relating to strengthening of companys risk management policies & systems.

The statutory auditors have issued an unmodified opinion on the internal controls of the Company for the quarter and year ended March 31, 2025.

GPT Healthcare places a strong emphasis on investing in its workforce and fostering a positive organisational culture. As of March 31, 2025, GPT Healthcare has a skilled talent pool of 1,924 employees.

GPT Healthcare operates in compliance with various health, safety, and environmental laws, regulations, and government-mandated procedures. The Company has established specific policies to manage wastewater discharge, workplace conditions, and the handling, storage, transportation, treatment, and disposal of hazardous biomedical materials. These policies align with industry regulations and standards to ensure safe and sustainable operations.

The management discussion and analysis report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward-looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include changes in governmental regulations, tax regimes, economic developments within India and other incidental factors.