Sangani Hospitals Ltd Management Discussions

The Management of Sangani Hospitals Limited presents the Management Discussion and Analysis (MD&A) of the Company for the year ended on March 31, 2025, and its outlook for the future. This outlook is based on assessment of current business environment. It may vary due to future economic and other developments both in India and Abroad.

It contains financial highlights but does not contain the complete financial statements of the Company. It should be read in conjunction with the Companys Audited Financial Statements for the year ended on March 31, 2026.

INDIAN HEALTHCARE INDUSTRY:

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.

Market Size

The Indian healthcare sector, valued at Rs. 9,42,590 crore (US$ 110 billion) in 2016 and Rs. 31,87,668 crore (US$ 372 billion) in 2023, is projected to reach Rs. 54,67,022 crore (US$ 638 billion) by 2025, growing at a robust 17.5-22.5% CAGR. Healthcare spending accounted for 3.3% of Indias GDP in 2022 and is expected to rise to 5% by 2030, reflecting the sectors increasing role in the economy.

To strengthen capacity, there are 5,310 nursing institutions (including 806 government institutes) producing nearly 3.82 lakh nurses annually. Medical education capacity is also expanding, with 43 new medical colleges established in 2025-26, taking the total to around 818 medical colleges across India. The Government has also approved 11,682 MBBS seats and 8,967 postgraduate seats, with over 1,28,000 MBBS seats available annually, further strengthening the talent pipeline. Investment activity in the sector remains strong, with the hospital segment accounting for nearly 80% of the overall healthcare market, highlighting its important role in industry growth.

Government Initiatives

The Government continues to prioritise healthcare infrastructure through initiatives such as the Ayushman Bharat Health Infrastructure Mission, aimed at strengthening capacity and access across the country. In Union Budget FY26, the government allocated Rs. 95,957.87 crore (US$

10.86 billion) to the healthcare sector, marking a 9.46% increase over FY25, reflecting sustained commitment, although gaps in public health infrastructure continue to persist.

Health insurance penetration is steadily rising. Total health insurance premiums stood at Rs. 1,18,688 crore (US$ 13.84 billion) in FY25, up from Rs. 1,09,007 crore (US$ 12.72 billion) in FY24. In July 2025, standalone health insurers premiums rose 10.4% YoY to Rs. 3,622 crore (US$ 422.7 million), reflecting growing adoption and demand for coverage.

Digital health and telemedicine are emerging as key growth drivers. The rapid adoption of telemedicine and other digital technologies to address healthcare delivery challenges in rural and remote areas, along with their applications in education, training, and administration, presents significant opportunities for investors. Indias telehealth sector is expected to grow at a CAGR of 20.75% through 2030, while the global remote patient monitoring market is projected to expand at a CAGR of 12.7% to reach US$ 56.94 billion by 2030.

Medical tourism continues to strengthen Indias global healthcare position. The market is estimated at US$ 8.71 billion in 2025 and is projected to grow to US$ 16.21 billion by 2030, at a CAGR of 13.23%. Between January and November 2025, around 450,633 patients visited India for treatment, reflecting strong inbound demand. The sector is witnessing significant growth driven by factors such as the rising global burden of chronic diseases, ageing populations in developed countries, and increasing healthcare costs worldwide, positioning India as a preferred destination for affordable and advanced medical care.

Some of the major initiatives taken by the Government of India to promote the Indian healthcare industry are as follows:

> In Union Budget 2025-26, the Department of Health Research is receiving a special enhancement of Rs. 531 crore (US$ 62 million) over the next five years to support AI in healthcare, new therapies like gene therapy, cancer and anaemia research, pandemic preparedness, and boosting medical research institutes.

> Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY) - Under PM-JAY, Bihar has achieved 100% coverage of all eligible families. As of September 2025, more than four crore Ayushman Cards have been created in the state. In just one year, this has resulted in savings of over Rs. 1,000 crore (US$ 116.7 million) in out-of-pocket healthcare expenses for the people of Bihar.

> Ayushman Bharat Digital Mission (ABDM) - Bihar has also secured the first rank in the implementation of ABDM.

> The India-UK Free Trade Agreement signed on July 24, 2025, introduced duty relief enabling Indian pharmaceutical companies easier access to UK drug stores, with zero tariffs on nearly 99% of exports.

> As of July 2025, over 41 Crore Ayushman Cards have been created under Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana.

> There are 31,466 hospitals empanelled under the scheme across the country with 14,194 of them being private. More than 9.84 Crore hospital admissions worth over Rs. 1,40,000 crore (US$ 16.34 billion) have been authorised under the scheme as of July 2025.

> The Union Budget 2025-26 emphasizes healthcare infrastructure by increasing the allocation for the Ministry of Ayush to Rs. 3,992 crore (US$ 465 million) in FY26 from Rs. 3,712 crore (US$ 433 million) in FY25.

> In 2025, the Ministry of AYUSH has developed the Central Sector scheme for Promotion of International Cooperation for AYUSH (ICScheme) to boost exports, recognition, research, and international collaboration in AYUSH systems.

> WHO with the support of Ministry of Ayush have developed and published standardized terminology documents for Ayurveda, Unani, and Siddha systems, helping to create a globally accepted, unified language for these traditional medical practices.

> Under the ICScheme, India has signed 25 country-to-country MoUs, 52 institute-to- institute MoUs, and 15 AYUSH Chair MoUs.

> Every year, UIP targets 2.6 crore newborns and 2.9 crore pregnant women, aiming to ensure that every child is fully immunized in their first year of life.

> As a result of sustained efforts and outreach of UIP scheme, Indias Full Immunization Coverage (FIC) has reached an impressive 94.1%, reflecting the governments strong commitment to preventive healthcare.

> As of February 6, 2025, over 73.98 crore Ayushman Bharat Health Accounts (ABHA) have been created, 49.06 crore health records linked, 3.63 lakh health facilities registered, 5.64 lakh healthcare professionals onboarded, and 1.59 lakh facilities using ABDM-enabled software under the Ayushman Bharat Digital Mission.

> On September 3, 2025, the Life Insurance Council announced that a specialised insurance product tailored for rural India will be launched this year to improve financial protection and expand insurance penetration in underserved regions.

> The Health Ministry has launched the U-WIN platform on September 6, 2024, to digitize vaccination records across India. This initiative aims to streamline vaccine tracking and improve public health data management nationwide.

> The government has allocated Rs. 99,858 crore (US$ 11.50 billion) to the healthcare sector in the Union Budget 2025-26 for the development, maintenance, and enhancement of the countrys healthcare system. This reflects a 9.78% increase from the previous allocation of Rs. 90,958 crore (US$ 10.47 billion) in FY25.

> On January 25, 2025, Indias Prime Minister, Mr. Narendra Modi, and Indonesias President, Mr. Prabowo Subianto, signed a Memorandum of Understanding (MoU). This MoU aims to establish quality assurance standards for traditional medicine, representing a significant advancement in the pursuit of global standards in this field.

> Union Ministers of State for Health and Family Welfare, Mr. Prataprao Ganpatrao Jadhav and Mrs. Anupriya Singh Patel, recently unveiled three key initiatives at the Ayushman Bharat, Quality Health event. These initiatives aim to enhance healthcare quality and facilitate ease of doing business in India, including a virtual NQAS assessment for Ayushman Arogya Mandirs, an IPHS compliance dashboard for real-time monitoring of public health facilities, and a spot food licence initiative for food vendors.

> Union Minister of Health and Family Welfare and Chemicals & Fertilizers Dr. Mansukh Mandaviya, virtually launched MedTech Mitra, a platform designed to support young Indian innovators in the MedTech sector by aiding in their research, development, and regulatory approvals, aiming to reduce import dependence and transform India into a leading US$ 50 billion MedTech industry by 2030, while fostering indigenous development of affordable, quality medical devices and diagnostics, in line with the vision of Viksit Bharat and Atmanirbhar Bharat.

> Poshan Abhiyan is a Centrally Sponsored Scheme with the implementation of the scheme being done by States/UTs. To ensure that all Anganwadi Centres are equipped with Smartphones and Growth Monitoring devices (GMDs) such as Infantometer, Stadiometers, and Weighing Scale for Mothers and Infant, the Ministry has released revised guidelines for technical specifications and replacement of GMDs by the States.

Road Ahead

Indias healthcare sector is extremely diversified and is full of opportunities in every segment, which includes providers, payers, and medical technology. 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.

(Source: www.ibef.ora/bloas)

BUSINESS OVERVIEW

Our Company was originally incorporated as "Sangani Hospital Limited" in Keshod, Gujarat, a public limited company under the Companies Act, 2013, pursuant to a certificate of incorporation dated November 11, 2021 and certificate of commencement of business dated December 14, 2021 issued by the Registrar of Companies, Ahmedabad. The Corporate Identification Number of our Company is L85300GJ2021PLC127189.

We are a multi-speciality healthcare provider operating in Keshod and Veraval region of Gujarat with a combined bed capacity of 170 beds. Our services primarily include super speciality services, speciality services and other support services. We also operate pathology laboratory and medical store. Currently, we operate out of two hospitals i.e. Sangani Hospital at Keshod, Junagadh, Gujarat and Sangani Super Speciality Hospital, Veraval, Gujarat.

Sangani Hospital is multi-speciality hospital with primary, secondary and tertiary care facilities. It is strategically located near Keshod bus stand and railway station making it accessible to fifty- four adjacent small villages. Sangani Super Speciality Hospital is multi-speciality hospital with significant focus on tertiary care facilities.

Both our hospitals offer a comprehensive range of healthcare services in specialties and super specialties, including cardiac sciences, neurosciences, orthopaedics, renal sciences and mother & childcare. We have provided dialysis facility to more than 600 patients and more than 6,000 sessions annually free of cost under the Mukhyamantri Amrutum Yojana (MAA Yojana) and Pradhan Mantri Jan Arogya Yojana (PMJAY). Our team of qualified medical practitioners are trained to handle all kinds of emergencies and ensures that patients get quality healthcare services. Our healthcare staff comprises of Clinical Pharmacist, Microbiologist (DMLT), Medical Officers, Clinical Assistants, Nursing staff, Attendants and Technicians. We strive to deliver advanced healthcare while providing affordable medical services to our patients.

Our hospitals have been certified with ISO 9001:2015 for Quality Management System for the scope of services that includes MD-ICU, ICCU, ECHO-TMT, Dialysis, Orthopaedic Department, PFT, EECP, Diabetic, Clinic, ENT- EAR, NOSE, Throat Head & Neck Surgery, Laser Surgery, Trauma Unit, Endoscopy, Audiology, Vertigo Clinic, OBST & Gynee-USG-Doppler, Normal Delivery, Joint Replacement Facility, Gynec Surgery, Infertility Clinic, Radiology Unit - Xray, Sonography, CT Scan, General Surgery, all type of general surgery, Dental Surgery, Uro Surgery and hospital services.

Further, our Sangani Super Speciality Hospital at Veraval is certified with National Accreditation Board for Hospitals & Healthcare Providers ("NABH") certification for general medicine, general surgery, orthopaedic surgery (including arthroscopy), urology, 2D Echo, X-Ray, clinical biochemistry, clinical pathology, haematology and pharmacy.

We are also a part of Ayushman Bharat, a flagship scheme of Government of India which was launched and recommended by the National Health Policy 2017, to achieve the vision of universal

health coverage (UHC). The initiative has been designed to meet SDG (Sustainable Development Goal) & its underlining commitment. Ayushman Bharat, is an attempt to move from sectoral & segmented approach of health service delivery to a comprehensive need-based health care service. We are also a part of Mukhyamantri Amrutam (MA) scheme launched by Gujarat state to cater families below the poverty line.

Currently, our primary focus is Gujarat healthcare market where we have a understanding of regional nuances, customer culture and the mindset of medical professionals and where there is a significant need for quality and affordable healthcare services.

SEGMENT WISE PERFORMANCE:

Your company has only one segment that is Healthcare.

RISKS AND CONCERNS:

Our Companys future results of operations could be affected potentially by the following factors:

1. Occupancy Rates, Length of Hospital Stay and Revenue Per Bed.

2. Patient volumes and case mix.

3. Government Regulations and Policies.

4. Increase in departments such as urology surgery, laparoscopic surgery, general surgery, and orthopaedic surgery.

5. Expenses Relating to our Purchase of Medical Consumables and Pharmacy Items.

6. Payment of professional fees to doctors and consultants.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The internal control system is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. They have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transaction with proper authorization and ensuring compliance of corporate policies.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Standalone:

During the financial year 2025-26, the Company recorded Gross Income of ^2,174.50 lakhs, as compared to ^1,836.97 lakhs in the previous financial year, registering a growth of approximately 18.37%.

The Profit Before Tax stood at ^333.14 lakhs during FY 2025-26 as against ^346.27 lakhs in FY 2024-25. The Profit After Tax stood at ^240.08 lakhs, as compared to ^259.48 lakhs in the previous year.

The Company continues to focus on strengthening its operational efficiency, enhancing healthcare services and creating a sustainable platform for future growth. During the year, the Company also acquired a controlling stake of 55% in Sadbhavana Healthcare and Medical Research Private Limited, marking an important milestone in its strategic expansion.

Consolidated:

During the financial year 2025-26, the Company, on a consolidated basis, recorded Gross Income of ^10,755.50 lakhs, as compared to ^2,279.18 lakhs in the previous financial year, registering a significant growth of approximately 371.89%.

The Profit Before Tax (PBT) stood at ^766.73 lakhs during FY 2025-26, as against ^346.17 lakhs in FY 2024-25, representing an increase of approximately 121.77%. The Profit After Tax (PAT) stood at ^552.51 lakhs, compared to ^259.38 lakhs in the previous year, reflecting an increase of approximately 113.04%.

The significant improvement in consolidated financial performance was primarily driven by the substantial increase in the Companys overall income and expansion of its business operations. The acquisition of a 55% controlling stake in Sadbhavana Healthcare and Medical Research Private Limited during the year also contributed to the Companys consolidated performance and represents an important step in its strategic expansion in the healthcare sector.

The Company remains focused on leveraging the capabilities and resources of its subsidiary, strengthening its healthcare services and pursuing opportunities for operational synergies and business expansion. The management continues to remain committed to sustainable growth, operational efficiency, quality healthcare delivery and creation of long-term value for its stakeholders.

HUMAN RESOURCES / INDUSTRIAL RELATIONS:

Your Company has team of qualified and dedicated personnel who have contributed to the consolidation of the operations of your Company. Your Companys industrial relations continued to be harmonious during the year under review. Your Company has succeeded in attracting and retaining key professional and intends to continue to seek fresh talents to further enhance and grow our business.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys objectives, estimates, expectations or projections may constitute "forward looking statements", within the meaning of applicable laws and regulations. The current years outlook is Managements perception at the time of drawing this report. Actual results may differ materially from those either expressed or implied in the statement. Important factors that could influence the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws economic developments within the country and other factors such as litigation, industrial relations and other statutes and other incidental factors.