Nexus Surgical and Medicare Ltd Management Discussions

Indian Economy

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 as private players.

Indias healthcare delivery system is categorised into two major components - public and private. The government, i.e., the 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 most 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.

The Indian Healthcare industry continued its healthy growth in FY23 and reached a value of US$ 372 billion driven by both the private sector and the government. As of FY24, 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 2.7-3.5 million new tech jobs.

Indias public expenditure on healthcare is expected to be 1.9% of GDP in FY26, compared to 2.5% in FY25, as per the Economic Survey 2024-25. The government announced Rs. 9,406 crore (US$ 1.08 billion) outlay for Pradhan Mantri Jan Arogya Yojana in the Union Budget FY26, an increase of 28.8% from budget FY25.

The health-tech sector is set for significant expansion, with hiring projected to rise by 15-20% in 2024, reflecting the increasing demand for innovative healthcare solutions and the integration of technology in medical services.

Overall Review:

Indian economy has emerged as one of the fastest growing major economies in the recent past. This robust growth amidst weak global economic growth is attributable to strong domestic demand, structural reforms and policy support. As per the Second Advance Estimates of GDP, Indias GDP growth is expected at 6.5% in FY2025, much lower than 9.2% GDP growth in FY2024. Manufacturing, services and infrastructure investment sectors witnessed good traction. Slower GDP growth in the first half of the year is attributable to lower industrial activity. Election uncertainties in the first quarter followed by a modest activity in construction and manufacturing in the subsequent quarter due to weather related disruptions led to weaker-than-expected gross fixed capital formation. Strong export growth was seen in pharmaceuticals, textiles and engineering goods.

Indias pharmaceutical industry often referred to as the ‘Pharmacy of the World, encompasses a broad range of segments, including generic drugs, overthe-counter (OTC) medicines, bulk drugs, vaccines, contract research, biosimilars, and biologics. The Indian pharmaceutical market (IPM) ranks third in production by volume and 14^th by value in the global pharmaceutical market. India is the worlds leading vaccine exporter, supplying 65-70% of the World Health Organizations (WHO) vaccine requirements, particularly for DPT, BCG and measles. With such major contributions and growing China plus one strategy among large pharmaceutical markets, India is cementing its position as a key global pharmaceutical supplier.

Government Initiatives

The Indian government has launched several initiatives to strengthen the healthcare sector, focusing on accessibility, affordability, and quality of care.

Key initiatives include Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) for health insurance, Ayushman Bharat Digital Mission (ABDM) for digital health infrastructure, and strengthening primary healthcare through Health and Wellness Centres (AB-HWCs).

Heres a more detailed look at some of the major initiatives:

1. Ayushman Bharat (National Health Protection Mission):

? PM-JAY:

This flagship program provides health insurance coverage of 35 lakh per family per year for secondary and tertiary care hospitalization to 107 million identified poor and vulnerable families.

? Health and Wellness Centres (AB-HWCs):

These centers are the foundation of primary healthcare, offering a wide range of services, including maternal and child health, non-communicable diseases, and free essential drugs.

2. Ayushman Bharat Digital Mission (ABDM):

? ABDM aims to create a digital health ecosystem by building the necessary digital infrastructure to support the evolving healthcare landscape.

? Key components include Health IDs, Health Facility Registry (HFR), and Healthcare Professionals Registry (HPR).

3. Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM):

? PM-ABHIM focuses on strengthening primary, secondary, and tertiary healthcare infrastructure, particularly in rural areas.

? It includes strengthening Health and Wellness Centres, adding critical care beds in district hospitals, supporting Block Public Health Units, and establishing integrated district public health laboratories.

These initiatives demonstrate the governments commitment to improving healthcare access, affordability, and quality across India through a combination of infrastructure development, digital solutions, and targeted health programs

Industry Outlook

Indias healthcare sector has witnessed a remarkable 62% year-on-year growth in March 2025, according to recent research. This surge is being driven by rapid technological advancements and an increasing demand for medical services, creating significant job opportunities across various roles. As the sector undergoes a transformation, there is an increasing focus on roles within Artificial Intelligence (AI), digital health, and health informatics. The growing trend highlights a shift towards a more technology-driven healthcare environment, one that requires professionals to not only have clinical expertise but also technical and cross-functional skills. This provides a unique opportunity for those looking to enter the industry, especially in the fast-evolving health tech space.

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 are 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.

In the Union Budget 2024-25, the government allocated 390,959 crore for developing, maintaining and improving the countrys healthcare system.

Segment-wise/Product-wise Performance:

The Company is engaged mainly in trading activities of medical supplies and as such there are no other reportable segments as defined by Indian Accounting Standard 108 on "Operating Segments" issued by the Institute of Chartered Accountants of India.

Risks, Concerns and Threats:

In 2025, the healthcare sector faces a complex array of risks, concerns, and threats including cybersecurity breaches, workforce shortages, and rising operational costs. These issues are further complicated by the integration of new technologies like AI and the need to address healthcare inequities.

Cybersecurity Threats:

? Escalating Cyberattacks:

The healthcare industry is experiencing a surge in cyberattacks, including ransomware and data breaches, which can disrupt care delivery and compromise patient safety.

? EHRs and IoMT Devices:

The increasing use of electronic health records (EHRs) and Internet of Medical Things (IoMT) devices creates more entry points for cybercriminals and expands the attack surface.

? Data Breaches:

Incidents involving sensitive patient data can lead to identity theft, financial loss, and erosion of public trust.

? Third-Party Risks:

Integrating new technologies and working with third-party vendors can expose vulnerabilities and increase the risk of breaches

Workforce Challenges:

? Staffing Shortages:

Clinician burnout and high turnover rates contribute to significant staffing shortages, impacting the quality and availability of care.

? Recruitment and Retention:

Healthcare organizations face challenges in attracting and retaining qualified professionals, further exacerbating workforce shortages.

Operational and Financial Pressures:

? Rising Costs:

Operational costs, including labour, technology, and supplies, are escalating, putting financial strain on healthcare organizations.

? Inefficient Workflows:

Inefficient documentation processes, insurance claims, and data management contribute to increased expenses and administrative burden.

? Revenue Cycle Management:

Ineffective revenue cycle management can negatively impact financial stability and hinder the ability to invest in patient care and technology.

Other Concerns:

? Healthcare Inequities:

Health disparities persist, disproportionately affecting underserved populations and highlighting the need for equitable access to care.

? Counterfeit Drugs and Substandard Medical Devices:

The growing threat of counterfeit drugs and substandard medical devices poses risks to patient safety and treatment outcomes.

? Regulatory Change:

Heightened regulatory scrutiny and compliance requirements can add to the complexity and cost of healthcare operations.

? Uncertain Economic Conditions:

Economic uncertainty can impact healthcare funding and investment, potentially affecting the delivery of care.

In 2025, the healthcare sector is poised for significant growth and transformation, driven by technological advancements and changing patient needs. Key areas of opportunity include AI-powered diagnostics, personalized medicine, digital health solutions, and specialized roles like nurse practitioners and physician assistants. The Indian healthcare sector, in particular, is experiencing rapid growth, with a strong demand for health tech professionals and opportunities in medical tourism.

Specific Opportunities:

? AI and Data Science:

AI is revolutionizing healthcare with applications in diagnostics, personalized treatment plans, and drug discovery.

? Telehealth and Remote Care:

Virtual assistants, remote therapy (both physical and mental), and digital twins are expanding access to care and improving efficiency.

? Personalized Medicine:

Tailoring treatment plans based on individual genetic makeup and medical history is becoming more feasible with advancements in genomics and AI.

? Digital Health Solutions:

Mobile apps for fitness tracking, medication reminders, and chronic disease management are in high demand.

Internal Control System:

The management believes that internal controls are the prerequisite of governance and that action emanating out of agreed business plans should be exercised within a framework of checks and balances. The management is committed to ensuring an effective internal controls environment, commensurate with the size and complexity of the business, which assures compliance with internal policies, applicable laws and regulations, ensures reliability and accuracy of records, promotes operational efficiency, protects resources and assets, helps to prevent and detect fraud, errors and irregularities and overall minimizes the risks. The Company has a well-established internal controls framework comprising a set of policies, procedures and systems, instrumental in enhancing the efficiency and effectiveness of business operations, reducing risks and costs, and improving decision-making and accountability. Internal financial controls framework, sub-set of internal controls framework assures the reliability and accuracy of financial reporting and the preparation of financial statements for external purposes following generally accepted accounting principles.

Financial Performance w.r.t Operational Performance:

During the year, the Company has earned Total Revenue of Rs.5,72,826.06 hundreds in comparison to Rs.3,50,107.70 hundreds during the previous year. The Net Profit after tax is Rs.49,738.32 hundreds in comparison with Rs.21,330.85 hundreds of the previous year. The transformational journey has embarked upon and the Company remains confident of a sound growth trajectory in the upcoming years.

Safety, Health and Environment:

Your Company as a matter of policy gives greater importance to safety, health and environment and also ensures compliance with applicable legislative requirements.

Human Resources:

The Company has embarked on its journey of "Happiness at the workplace" which has helped to look at employee engagement in a more holistic way.

Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector-specific financial ratios.

Particulars	F.Y. 2024-25	F.Y. 2023-24
Debtors Turnover Ratio1	5.47 times	8.73 times
Current Ratio2	1.85 times	1.41 times
Net Profit Margin (%)3	8.69%	6.14%

1Debtors Turnover Ratio has declined due to an increase in the Companys trade receivables. ²Current Ratio has increased due to Increase in current assets. ³Net Profit Margin improved during the year, primarily driven by increased profitability.

Cautionary Statement:

Statements in this ‘Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, plans or industry conditions or events are ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results, performance or achievements could differ materially from those expressed or implied. The Company assumes no responsibility to publicly update, amend, modify or revise any forward-looking statements, based on any subsequent development, new information or future events or otherwise except as required by applicable law.