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, 2025.

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

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.

As on January 20, 2025, 36 States/ UTs have set up 53 Tele MANAS Cells and have started tele mental health services. More than 17.6 lakh calls have been handled on the helpline number. The government announced Rs. 9,406 crore (US$ 1.08 billion) outlay for PMJAY in the Union Budget FY26, an increase of 28.8% from budget FY25. Indias pharmaceutical industry is anticipated to undergo significant growth, with exports projected to reach Rs. 30,76,500 crore (US$ 350 billion) by FY47, representing an increase of 10 to 15 times from current levels of Rs. 2,37,330 crore (US$ 27 billion).

As on January 20, 2025, more than 73 crore Ayushman Bharat Health Accounts (ABHA) have been created successfully and there are more than 5 lakh health professionals registered. Between April 2000-March 2025, the FDI inflow for the drugs and pharmaceuticals sector stood at Rs. 2,33,399 crore (US$ 27.13 billion). Inflows in sectors such as hospitals and diagnostic centres and medical and surgical appliances stood at Rs. 1,01,687 crore (US$ 11.82 billion) and Rs. 33,638 crore (US$ 3.9 billion), respectively, between April 2000-March 2025.

Indias healthcare workforce has already exceeded 6 million as of CY24. However, this represents only the beginning, as the sector is anticipated to experience substantial growth, with over 6.3 million additional jobs expected by CY30.

The telemedicine market is expected to reach US$ 5.4 billion by FY25, driven by increased demand for remote healthcare solutions and advancements in technology.

Government Initiatives

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

?€? 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.org/blogsl 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 U85300GJ2021PLC127189.

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:

Sales and Other Income for the year ended March 31, 2025 amounted to Rs. 1,836.97 Lakhs as against Rs. 1,305.09 Lakhs in the previous Financial Year. Net Profit for the year under review was Rs. 259.48 Lakhs as against Rs. 269.61Lakhs in the previous Financial Year.

Consolidated:

Pursuant to the provisions of section 129 and 134, 136 of the Companies Act, 2013 read with Rules made thereunder and pursuant to Regulation 33 od SEBI (LODR) Regulations, 2015, your Company had prepared consolidated financial statements of the Company and its subsidiary entity Ankur Distributors.

Sales and Other Income for the year ended March 31, 2025 amounted to Rs. 2,279.18 Lakhs as against Rs. 1,652.01 Lakhs in the previous Financial Year. Net Profit for the year under review was Rs. 259.38 Lakhs as against Rs. 269.69 Lakhs in the previous Financial Year.

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.