This Management Discussion and Analysis Report is a "forward
looking statement" and forms part of the Annual Report of the Company. It Indicates
the Companys movement in the external environment vis-a-vis its own strengths and
resources detailing the Companys objectives and expectations.
1. INDUSTRY STRUCTURE:
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 categorized 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 centres (PHCs) in rural
areas. The private sector provides a majority of secondary, tertiary, and quaternary care
institutions with a 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.
Government Initiatives
Some of the major initiatives taken by the Government of India to
promote Indian healthcare industry are as follows:
• In the Union Budget 2023-24:
? Under the Union Budget 2023-24, the Ministry of Health and Family
Welfare has beenallocated Rs. 89,155 crore (US$ 10.76 billion), an increase of 3.43%
compared to Rs. 86,200.65crore (US$ 10.4 billion) in 2021-22.
? Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) was allocated Rs.
3,365 crore (US$ 0.41 billion)
? Human Resources for Health and Medical Education was allotted Rs.
6,500 crore (US$ 780 million).
? National Health Mission was allotted Rs. 29,085 crore (US$ 3.51
billion).
? Ayushman Bharat - Pradhan Mantri Jan ArogyaYojana (AB-PMJAY) was
allotted Rs. 7,200 crore (US$ 870 million).
? Rs. 5,156 crore (US$ 675.72 million) was allocated to the newly
announced PM-ABHIM to strengthen Indias health infrastructure and improve the countrys
primary, secondary andtertiary care services.
• In July 2022, the World Bank approved a US$ 1 billion loan
towards Indias Pradhan Mantri-Ayushman Bharat Health Infrastructure Mission.
• In order to promote medical tourism in the country, the
government of India is extending the e-medical visa facility to the citizens of 156
countries.
Significant Industry highlights:
The Indian healthcare sector is expected to record a three-fold rise,
growing at a CAGR of 22% between 2016-22 to reach US$ 372 billion in 2022 from US$ 110
billion in 2016. By FY22, Indian healthcare infrastructure is expected to reach US$ 349.1
billion.
In the Economic Survey of 2022, Indias public expenditure on
healthcare stood at 2.1% of GDP in 2021-22 against 1.8% in 2020-21 and 1.3% in 2019-20.
In FY22, premiums underwritten by health insurance companies grew to
Rs. 73,582.13 crore (US$ 9.21 billion). The health segment has a 33.33% share in the total
gross written premiums earned in the country.
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 10th in the Medical Tourism Index (MTI)
for 2020-21 out of 46 destinations by the Medical Tourism Association.
The e-health market size is estimated to reach US$ 10.6 billion by
2025.
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.
• 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: IBEF Healthcare update April, 2023
2. OPPORTUNITIES AND THREATS
Opportunities:
• Rising income level
• Greater health awareness,
• Increased precedence of lifestyle diseases
• Improved access to health insurance coverage
• Opportunity for horizontal and vertical growth.
• Growing elderly population, changing disease patterns
• Encouraging avenues for attracting prospective investments.
• Great potential for medical tourism.
Threats:
• Increased Competition
• Increase in Cost of operation
• Technological Advancements
• Man Power Attrition
3. RISKS AND CONCERNS
• Increasing competitive intensity in the healthcare sector
• Increasing cost / scarcity of resources in the Industry
• Constant change in technology and revamping of existing systems.
• Government regulations and restrictions.
4. FINANCIAL AND OPERATIONAL PERFORMANCE
The financial statements have been prepared in compliance with the
requirements of the Companies Act, 2013, and Indian Accounting Standards (Ind AS) in
India. The management accepts responsibility for the integrity and objectivity of these
financial statements, as well as for various estimates and judgments used therein. The
estimates and judgments relating to the financial statements have been made on a prudent
and reasonable basis, in order that the financial statements reflect the state of affairs
of the Companyin a true and fair manner.
| Particulars |
2022-23 (Rs In Lakhs) |
2021-22 (Rs In Lakhs) |
| Operating Income |
15,575.64 |
13,607.28 |
| Other Income |
312.86 |
214.69 |
| Total Income |
15,888.50 |
13,821.97 |
| Operating Expenses |
11,444.15 |
9,889.88 |
| EBIDTA |
4444.35 |
3,932.09 |
| Finance Cost |
81.10 |
69.58 |
| Depreciation |
764.22 |
652.70 |
| Profit/(Loss) before Tax |
3599.03 |
3,209.81 |
| Tax expense |
1003.14 |
880.46 |
| Provision for Deferred Tax |
(72.95) |
(43.23) |
| Profit/(Loss) after Tax (PAT) |
2668.84 |
2,372.58 |
Total Operating income increased by 14.5% to Rs. 15,575.64
lakhs during the financial year 2022-23 from Rs. 13,607.28 lakhs in the
previous year.
Your Company has earned Profit after tax of Rs. 2668.84 lakhs for
the financial year 2022-23 significantly higher than Rs. 2,372.58 lakhs achieved
during the previous year.
Improvement in Bed occupancy with better revenue mix coupled with
operational efficiency and cost control measures contributed to better profitability.
5. OUTLOOK
Indian healthcare sector, being one of the fastest growing industries,
there is immense scope for enhancing healthcare services penetration in India, thereby
presenting ample opportunity for development of the healthcare industry. Indias private
healthcare sector has contributed significantly and accounts for about 60 per cent of
inpatient care. Most private facilities initiated their plans in response to the COVID-19
pandemic, which involved significant investments to prepare facilities for controlling and
preventing the infection, building infrastructure for quarantine and treatment, and
equipping the facility with suitable medical supplies and additional workforce.
The biggest health emergencies of our times have not just laid bare the
myriad challenges and gaps in our health system but also highlighted the importance of
investing in well-being at both personal and system level.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The company has a proper and adequate system of internal controls to
ensure that all the assets are safeguarded, protected from unauthorized use and the
transactions are authorized, recorded and reported correctly. The company conducts audit
of various departments with an audit plan through an independent Internal Auditor and
reports to the Audit Committee on significant issues with Action Taken Report. Wherever
necessary the inputs of the Statutory Auditors are also obtained to ensure efficiency of
the operations and accounting.
7. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT,
INCLUDING NO OF PEOPLE EMPLOYED
The Company recognizes importance of leadership, technical and
behavioral development for employees across the Company. The Company has launched
continuous improvement & training programs aimed for increasing knowledge level of
employees and offer rewards to those employees who performed well in such programs. Staff
levels have been maintained adequately as per requirements.
8. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS
COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH
DETAILED EXPLANATIONS THEREFORE
| S. No Ratios |
Basis |
31-Mar-23 |
31-Mar-22 |
Variance (in %) |
Reasons |
| 1. Current ratio |
Current Assets/Current Liabilities |
2.30 |
2.18 |
6% |
- |
| 2. Debt Equity ratio |
Total Liabilities/ Shareholder funds |
0.39 |
0.31 |
27% |
The Company has availed loan from State Bank
of India towards the Mother & Child care Project thereby increasing the borrowings in
the current year as compared to previous year. |
| 3. Debt service coverage ratio |
Net Operating revenue / Total Debt |
13.48 |
16.33 |
-17% |
- |
| 4 Return on equity ratio |
Net profit after taxes/ Average
shareholders equity |
1.64 |
1.45 |
12% |
- |
| 5 Inventory Turnover ratio |
Sales/ Average Inventory |
37.32 |
36.70 |
2% |
- |
| 6 Trade receivable turnover ratio |
Net Credit Sales/ Average Accounts
Receivable |
9.14 |
13.78 |
-34% |
During the year, the credit revenue has
reduced by 14% with a corresponding increase in receivables by 30% inspite of improvement
in collections has led to the reduction in turnover ratio. |
| 7 Net Profit ratio |
Net Profit/ Net Sales |
17 |
17 |
0% |
- |
| 8 Operating Margin |
Operating Income/Revenue |
98% |
98% |
NIL |
- |
| 9 Interest Coverage Ratio |
EBITDA/Interest Expense |
53 times |
54 times |
2% |
- |
9. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE
IMMEDIATELY
The return on net worth for the company improved and stood at 27.05%
during FY23, from 23.52% during FY22. The return on net worth measures the ability of a
Company to generate profits.
10. CAUTIONARY STATEMENT
The information and opinion expressed in this Report may contain
certain forward-looking statements, which the management believe are true to the best of
its knowledge at the time of its preparation. Actual results may differ materially from
those either expressed or implied in this report.
|
sd/- |
sd/- |
| Place: Chennai |
Dr S Manivannan |
K Anandababu |
| Date: May 29, 2023 |
Managing Director |
Chief Financial Officer |
|
DIN: 00910804 |
|
+91-9892691696
