Jeena Sikho Lifecare Ltd Management Discussions

Economic Overview

Indian economy

The Indian economy is now better equipped than ever to tackle global macroeconomic challenges, thanks to policies enacted over the past decade. The Union government has accelerated infrastructure development at an unprecedented pace, boosting public sector capital investment from INR 5.6 Lakhs Crores in FY15 to INR 18.6 Lakhs Crores in FY24, according to budget estimates - a 3.3-fold increase. The expansion in highways, freight corridors, airports, metro rail networks, and trans-sea links has been tangible and transformative.

The financial sector is robust, with stronger balance sheets and an eagerness to lend. Non-food credit growth, excluding personal loans, is experiencing double-digit rates. Inclusive development initiatives have improved the financial health of Indian households. Fifty-one crore bank accounts under Jan Dhan Yojana now hold deposits exceeding INR 2.1 Lakhs Crores, with over 55% of these accounts belonging to women. In December 2019, household financial assets were 86.2% of GDP, with liabilities at 33.4% of GDP. By March 2023, these figures had improved to 103.1% and 37.6%, respectively, resulting in net financial assets of households rising from 52.8% of GDP in December 2019 to 65.5% of GDP by March 2023.

This enhanced positioning is a result of strategic policies and initiatives focussed on inclusive development and infrastructure expansion. The tangible improvements in physical and digital infrastructure, coupled with the strengthened financial sector, underscore Indias readiness to navigate future challenges effectively. As the nation continues to invest in its infrastructure and financial health, it is well-poised to sustain its growth trajectory and enhance the well-being of its citizens.

FY25 will mark the fourth consecutive year of post-pandemic growth at or above 7% for the Indian economy

OUTLOOK

It is highly likely that the Indian economy will achieve a growth rate of 7% or higher for FY24, with some forecasts suggesting this trend will continue into FY25. If these predictions hold, FY25 will mark the fourth consecutive year of post-pandemic growth at or above 7%, underscoring the resilience and potential of the Indian economy. This consistent performance bodes well for the future and reflects a robust economic foundation.

Some economists argue that not all growth is equal, and they are correct. Achieving an 8-9% growth rate when the global economy is expanding at 4% is different from sustaining growth at or above 7% when the global economy struggles to grow at 2%. The value of growth in the latter scenario is qualitatively superior, providing higher marginal utility. The global economys struggle to maintain its post-COVID recovery amid successive shocks - such as supply chain disruptions, trade flow impacts, increased transportation costs, economic output fluctuations, and inflation - affects worldwide stability. While India will not be exempt from these challenges, its experience in navigating the COVID-19 crisis and the energy and commodity price shocks of 2022 instil confidence in its ability to weather emerging disturbances.

Indias strategic policies and initiatives, focussing on inclusive development and robust infrastructure expansion, have fortified its economic foundation. This consistent growth trajectory not only demonstrates the countrys resilience but also its potential to sustain and enhance its economic performance despite global adversities. As the global economy faces ongoing challenges, Indias ability to maintain strong growth rates highlights its robust economic strategies and resilience, positioning it well for future opportunities and challenges.

Source: The Indian Economy: A Review by Department of Economic Affairs

Indian economy will achieve a growth rate of

7%

Industry Overview

Indian ayurvedic products market

The Indian Ayurvedic products market size reached ?748.5 billion in 2023. Looking ahead, we anticipate the market will expand to ?3,207.6 billion by 2032, exhibiting a CAGR of 17% during 2024-2032. Key drivers of this growth include the increasing prevalence of medical disorders, rising health consciousness, and the easy availability of Ayurvedic products through both online and offline channels.

Health concerns due to the side effects of Western drugs and growing awareness of the benefits of natural and organic medicines are bolstering market growth in India. Ayurvedic products are increasingly popular as safe and healthy alternatives to synthetic chemicals and pharmaceuticals. Additionally, their easy availability, combined with affordability and accessibility across urban and rural regions, fuels market growth.

The Government of India (GOI) is supporting the Ayurvedic product industry through various favourable initiatives, including exhibitions, trade fairs, and roadshows promoting Ayurveda. The government is also investing in programmes to increase the visibility, acceptability, and usage of Ayurvedic products within the health system. Increased investments in research and development (R&D) activities for developing new formulations, improving manufacturing processes, and incorporating modern technology are creating a favourable market outlook.

Strategies to globalise and promote Ayurveda, along with the increasing number of visitors coming to India for Ayurvedic treatments and products, offer lucrative growth opportunities to manufacturers. Other factors such as changing dietary patterns, the increasing prevalence of lifestyle diseases like diabetes, obesity, and hypertension, and various incentives and subsidies provided to drug manufacturers and entrepreneurs are projected to further stimulate market growth in the country.

Source: Imarc Group

Indian Wellness Industry

The Indian wellness market is expanding rapidly. This growth is driven by increasing demand for wellness, healing, and long-term rejuvenation. The boundaries between tourism, hospitality, and vacation are blurring, providing further impetus to this buoyant industry. In the future, alternative healing systems including medical tourism, medicines, FMCG, nutrition, diagnostics, and healthcare centres are set to thrive. What was once a peripheral sector is now becoming central, supported by the Governments dedicated Ministry of AYUSH (Ayurveda, Yoga, Unani,

Siddha, and Homeopathy), the first of its kind globally, focussing entirely on alternate healthcare.

The Ministry of AYUSH has been tasked with developing the alternate treatment industry, building capabilities, funding research centres, and raising awareness about alternate healing both domestically and internationally. While alternative medicine practices complement rather than replace scientific practices and modern healthcare, they play a crucial role in the governments objective to create a universal healthcare system in India.

Significant strides have been made under AYUSH. In December 2022, a comprehensive AYUSH hospital was inaugurated at Pernem, near the international MOPA airport. This hospital not only offers quality healthcare but also helps position Goa as a medical tourism destination. Additionally, the first global investor and innovation summit on alternate healthcare took place in Gandhinagar, Gujarat, in 2022, and a new WHO-sponsored alternate healing centre opened in Jamnagar, Gujarat, marking major achievements.

The rise in chronic and lifestyle diseases has fuelled the growth of the wellness sector. While communicable diseases have decreased, ailments such as diabetes, hypertension, and obesity have surged, prompting people to seek alternative treatments like Yoga, Ayurveda, and Reiki that address root causes and provide long-lasting cures. Alternative medicine systems are also beneficial in cosmetics, skin care, sexual, and psychological wellness, and are increasingly popular for nutrition and immunitybuilding.

The Ministry of Ayush is implementing the Centrally Sponsored Scheme of the National Ayush Mission (NAM) across States and Union Territories to enhance access to Ayush services. This initiative includes increasing the number of Ayush hospitals and dispensaries, upgrading existing facilities, and operationalizing Ayush Health and Wellness Centres by transforming existing dispensaries and Sub Health Centres. NAM aims to integrate Ayush into mainstream healthcare by co-locating Ayush facilities at Primary Health Centres, Community Health Centres, and District Hospitals. It also focuses on ensuring the availability of Ayush drugs, trained manpower, and public health programs. Additionally, NAM aims to improve Ayush education quality by upgrading existing institutions and establishing new Ayush colleges in states where government-sector teaching institutions are lacking.

There is a growing trend towards natural and herbal products, perceived to have fewer side effects than foreign substances and chemicals. This trend has accelerated post-pandemic, as natural, sustainable, and holistic living takes centre stage. India, with its rich tradition of Yoga and Ayurveda, is well-positioned to lead the global field of alternative healing and wellness. The countrys dominance in this space is globally recognised, attracting thousands of foreign nationals seeking treatment annually. India is also rich in herbal plants and spices, home to 8000 herbs and plants, and is the second-largest exporter of herbs after China. Indian herbal products are in high demand in markets such as the UAE, Japan, USA, and Europe.

The post-pandemic world has seen a rise in weekend getaways, short-haul breaks, and quality time in nature, further boosting the wellness sector. To offer higher value, hotels, resorts, and residential communities are increasingly bundling complimentary services such as Yoga and Reiki classes, naturopathy cottages, Ayurveda centres, and various wellness packages to help tourists and local inhabitants refresh and rejuvenate.

The Indian alternate healing space is set to grow rapidly, driven by rising demand, industry transformation, and abundant capable manpower. With 100% FDI allowed, foreign investments are expected to increase. Both central and state governments are taking initiatives to support the sector, unlocking new business opportunities in wellness hotels, resorts, Ayurveda centres, massage and healing centres, naturopathy and Yoga cottages, spiritual retreats, Ayurveda food businesses, and medicinal plant nurseries and farms. The future of alternate treatment, healing, and wellness in India looks promising, poised for significant growth and global leadership.

Source: The India Watch, Ministry of AYUSH

Opportunities & Threats

Opportunities

1. Government support and favourable initiatives:

The government has launched several initiatives to promote wellness, Ayurveda, and yoga, both in India and internationally, aiming to make India a hub for medical tourism. Key measures include:

• The Heal in India initiative, which promotes medical tourism, has extended the e-medical visa facility to citizens of 156 countries. The Ministry of Health and Family Welfare (MHFW) and the Ministry of AYUSH have collaborated to create a one step portal for Medical Value Travel (MVT) promotion. Additionally, the Ministry of AYUSH and the India Tourism Development Corporation (ITDC) signed an MOU to promote MVT

in Ayurveda and other traditional medicine systems.

The Ministry of AYUSH also developed a Central Sector Scheme for MVT to provide financial assistance to private investors for establishing Super Specialty Hospitals and Day Care Centres

• A special category of AYUSH Visa has been introduced for foreign nationals seeking treatment under AYUSH systems

• The government has transformed 1.5 lakh health centres across the country into Ayushman Bharat Health and Wellness Centres

• The MHFW approved AYUSH Day Care Therapy Centres, allowing Central Government Health Scheme (CGHS) beneficiaries and pensioners to benefit from these centres

• The Uttar Pradesh Government sanctioned INR 1,138 Crores for AYUSH services, including rejuvenating AYUSH Health and Wellness Centres in the state

• Haryanas Health and AYUSH Minister announced reimbursement for Ayurvedic treatment for state government employees and proposed including Ayurveda subjects in the MBBS course

2. Rising medical and wellness tourism: Medical and wellness tourism are key growth drivers for Indias healthcare market. India ranks 10^th on the Medical Tourism Index (MTI) for 2020-21 and 12^th in the top 20 wellness tourism markets globally. India is well-positioned to increase its share in the global wellness tourism market, thanks to affordable treatment, quality healthcare, and highly qualified multilingual professionals.

3. Burgeoning lifestyle diseases: The increasing prevalence of lifestyle diseases such as diabetes, hypertension, and cardiovascular diseases in India is driving demand for alternative medicines and therapies.

4. Popularity of Ayurveda and alternative medicine:

Ayurveda has gained popularity in India and globally, particularly after COVID-19, with more people seeking natural and holistic treatments. This trend has propelled demand for Ayurvedic products, alternative medicines, healthcare services, and holistic treatments.

5.IRDAI mandate to include AYUSH treatments in insurance coverage: The Insurance Regulatory and Development Authority of India (IRDAI) has mandated that health insurance providers cover AYUSH treatments, enhancing accessibility and affordability.

6.Adoption of technology and digital platforms:

Advances in technology and the growing use of digital platforms for marketing and distribution are expanding the Ayurveda market. Companies are leveraging e-commerce and digital channels to reach a wider audience and using innovative technologies to develop personalised Ayurvedic products and treatments.

Threats

1. Lack of awareness about Ayurveda: There is a trust deficit in Ayurveda due to a lack of awareness and evidence-based quality of treatments. The perception that Ayurvedic treatments are slow to heal further hampers acceptance.

2. Lack of proper recognition: Despite its rich history, the Ayurvedic profession lacks proper recognition. Aspiring practitioners face numerous challenges in achieving success and contributing meaningfully to the field.

3. Shortage of trained practitioners: There is a shortage of trained and qualified Ayurvedic practitioners. Increased focus on training and education programs by the government and private organisations is essential.

4. Inadequate research and science ecosystem:

While the government promotes Yoga and Ayurveda globally, inadequate scientific scrutiny remains a major concern. The lack of evidence- based research makes it difficult for Ayurveda to be accepted as a mainstream medical system.

5. Unregulated industry: The largely unregulated Ayurveda industry raises concerns about the standards, quality, and authenticity of treatments. Effective regulation is crucial to building public trust and confidence in the system.

Company Overview

Jeena Sikho Lifecare Limited (JSLL) stands at the forefront of Indias wellness industry, specialising in Ayurveda and holistic healthcare solutions. Founded in 2017 by Acharya Manish Ji, JSLL has swiftly emerged as a trusted name in alternative medicine, driven by a mission to promote wellness through the ancient wisdom of Ayurveda. Headquartered in Zirakpur, Punjab, along with a major business execution centre in Delhi and over 111 health care centres across the country, JSLL combines traditional practices with contemporary healthcare to address a wide range of health conditions.

Jeena Sikho boasts a robust operational framework. We have 111 operational facilities, including 32 hospitals and 79 clinics and day care centres covering 97 cities across 25 states, with a total of 1,277 operational beds and an additional 123+ beds in the pipeline. With 307 certified Ayurveda doctors and 483 supporting healthcare personnel, we offer a diverse portfolio of Ayurvedic services & products.

JSLLs commitment to quality is underscored by the NABH accreditation of several of our hospitals and clinics, reflecting our adherence to the highest standards of medical care and patient safety. The Company has 24 NABH accredited health care facilities, with an additional 9 in the pipeline.

JSLLs product portfolio includes over 300 Shuddhi- branded Ayurvedic products, which are renowned for their efficacy and quality. These products cater to various health concerns, from chronic diseases to preventive care, and are available through our healthcare centres and an expanding e-commerce presence.

Operational Highlights

In FY24, we have significantly expanded our services footprint by adding 817 beds to our existing 460 operational beds, bringing our total to 1,277 beds. Our reach now extends across 97 cities and towns in 25 states, with patient traction from our newly opened hospital showing remarkable promise. We have also seen significant increase in IPD patient volumes in FY24 as a result of our growing market presence, in FY24 we served 13,159 patients in IPD as compared to 5,728 in the previous year, registering a growth of 230% YOY. This was complemented by an increase in Average Revenue Per Bed from INR 6,100 in FY23 to INR 7,900 in FY24, registering an increase of 30% YOY. Our OPD Patient Volumes have also registered a healthy increase from 1.57 Lakhs in FY23 to 2.52 Lakhs in FY24, reporting an increase of 61% YOY.

A major milestone has been the empanelment of our Ayurveda services with 13 insurance providers, enabling cashless treatments from April 2024. This development is expected to boost patient volumes significantly, enhancing the affordability and accessibility of our services. We are actively working to expand our coverage with additional insurance providers to further this initiative.

Key Financial Ratios

Particulars	FY24	FY23	Ratio
Current Ratio	5.25	3.15	67%
Debt-Equity Ratio,	0.00	0.01	-56%
Debt Service Coverage Ratio	241.68	68.86	251%
Return on Equity Ratio	0.36	0.27	34%
Inventory Turnover Ratio	3.43	3.72	-8%
Trade Receivables Turnover Ratio	7.88	9.24	-15%
Trade Payables Turnover Ratio	5.53	2.52	120%
Net Capital Turnover Ratio	2.78	3.86	-28%
Net Profit Ratio	21.33%	16.55%	29%
Return on Capital Employed	48.93%	35.73%	37%

Note: The Company has significantly expended its activity during the year by opening many ayurvedic therapy centres, as a result there is a significant change in financial position during the year and the ratios have changed by more than 25%.

Risk & Concerns

Jeena Sikho Lifecare employs an efficient Risk Management framework to identify, assess, and mitigate key business risks. Here are the primary risks and corresponding mitigation strategies:

i

Competition risk:

Operating in highly competitive markets with low barriers to entry, JSLL faces competition from both organised and unorganised players in the Ayurveda industry. Free information about Ayurvedic products and home remedies on the internet also poses a competitive risk.

Regulatory risk:

The focus on the quality, efficacy, safety, and standardisation of herbal medicines by regulatory agencies worldwide demands understanding and adaptation to evolving regulations, increasing compliance risks and costs.

Reputational risk:

Brand recognition and reputation are crucial as JSLL expands into new geographies in an increasingly competitive market. The inability to maintain or enhance its brand image could negatively impact its business.

Third-party risk:

JSLLs reliance on third-party manufacturers and franchisees for product sales and operations exposes it to risks related to quality and compliance.

Potential litigation risk:

Consumer complaints and potential litigation on grounds of product deficiency or injuries sustained during treatments could generate negative publicity and reduce consumer confidence.

Mitigation:

JSLL leverages its expertise, end-to-end offerings, and extensive presence to stay ahead. With a robust portfolio of over 300 Shuddhi-branded products and over 307 Ayurvedic doctors, JSLL ensures quality service. Additionally, virtual and telephonic consultations enhance accessibility and convenience for patients.

Mitigation:

JSLL adheres to all statutory and regulatory requirements timely, maintaining excellence in quality standards. In the services vertical 24 of JSLLs health care centres are NABH accredited, underscoring the Companys commitment to high-quality patient care.

Mitigation:

JSLL has developed and continues to enhance the Shuddhi brand, focussing on maintaining quality standards and customer satisfaction. Founder Acharya Manish Ji actively promotes the brand through social media, national television, health camps, and other mediums.

Mitigation:

JSLL ensures that third parties adhere to high standards of probity and integrity through robust compliance and monitoring systems. Reliable third parties manufacture JSLLs products under strict quality standards monitored by the Company.

Mitigation:

JSLL maintains a zero-tolerance policy on quality issues, employing only qualified and experienced doctors. The Companys dedicated healthcare contact centres actively coordinate with customers to process orders, address queries and complaints, and ensure satisfaction.

Human Resources

JSLL considers its employees as invaluable assets integral to its growth and sustainability. With a workforce of 2,558 full-time employees as of March 31, 2024, JSLL focuses on empowering employees to enhance their professional skills. The workforce, a mix of experienced and young employees, strengthens JSLLs market position and provides a competitive edge. Many senior management employees have been with the Company for a long time, contributing to stability and growth.

Internal Control System

JSLL has strong internal control systems commensurate with the nature of its business, size, and complexity of its operations. These systems include policies and procedures, IT systems, delegation of authority, segregation of duties, and an internal audit and review framework. The Company ensures compliance with applicable laws and regulations, particularly those related to resource protection and accurate financial reporting. Audit findings are reviewed by the audit committee to ensure continued compliance and efficiency.

Disclaimer

The MDA section along with other parts of the annual report includes forward-looking statements about our future prospects, involving various identified and unidentified risks/uncertainties that could lead to significant differences in actual results. Changes in the macro-environment and unforeseen risks may impact us and our operations. Assumptions made in this report are based on available internal and external information, but these factors can change over time, affecting our estimates. Its important to note that these statements reflect our current intentions, beliefs, or expectations, and they are valid only as of the date they were made. We do not assume any obligation to update them due to new information or future events.