Soni Medicare Ltd Management Discussions

(In compliance with Regulation 34(3) read with Schedule V (B) of the Listing Regulations, Management Discussion and Analysis forms part of this Annual Report.)

A. Overview

The Indian healthcare sector has been a key contributor to the countrys economic development, driving substantial growth in both revenue and employment. The industry plays a pivotal role in the nations economic framework, contributing significantly to growth and employment across diverse sectors, including hospitals, medical devices, clinical trials, telemedicine, medical tourism, health insurance, and medical equipment.

India has a population of over 1.4 Billion, which leads to unique challenges in providing accessible and affordable healthcare to its citizens. However, these challenges also present significant opportunities for innovation and growth within the industry. Rising income levels, an aging population, increasing health awareness, and a shift towards preventive healthcare are expected to drive higher demand for healthcare services in the future.

The healthcare sector has undergone significant transformations in recent years, fueled by technological advancements, policy reforms, and increased investments. This growth has been further driven by expanded coverage, improved service quality, and substantial contributions from both public and private sectors. Government initiatives to boost healthcare spending and enhance infrastructure have also played a crucial role in accelerating the industrys momentum, positioning it for continued progress in the years ahead.

Despite these transformations and advancements, the sector faces various challenges, including disparities in healthcare access between urban and rural areas, inadequate infrastructure, and a shortage of skilled healthcare professionals. However, with ongoing efforts in innovation, collaboration, policy reforms, and infrastructure, the sector is well- positioned for sustained growth and improvement in the years ahead.

Looking ahead, the continued advancement of medical technology, combined with an increasing emphasis on preventive care and wellness programs, is expected to drive the growth and diversification of Indias healthcare industry. The sectors resilience in overcoming challenges positions it well for sustained growth and innovation, offering promising opportunities for investors, stakeholders, and healthcare professionals.

B. Current Landscape and Key Highlights

The Indian Healthcare industry continued its healthy growth and the overall size of the industry is estimated to reach US$ 372 Billion with a CAGR of 22% (2016 - 2022). The Indian healthcare market, which was valued at US$ 110 Billion in 2016 is now projected to reach US$ 638 Billion by 2025 (Source: Niti Aayog, IBEF). Indias healthcare industry comprises hospitals, medical devices and equipment, pharmaceuticals, health insurance, clinical trials, telemedicine and medical tourism.

C. Key Growth Drivers of the Indian Healthcare Industry

> Increasing Health Awareness to Boost Hospitalisation Rate: Majority of healthcare enterprises in India are more concentrated in urban areas. With increasing urbanisation (migration of population from rural to urban areas), awareness among the general populace regarding presence and availability of healthcare services for both preventive and curative care is expected to increase.

> Growing Health Insurance Penetration: Low health insurance penetration is one of the major impediments to the growth of the healthcare delivery industry in India, as affordability of quality healthcare facilities by the lower income groups continues to be a challenge. As per the Insurance Regulatory and Development Authority, nearly 573 million people have health insurance coverage in India (as of Fiscal 2024), as against 288 million (in Fiscal 2015), but despite this robust growth, the penetration in Fiscal 2023 stood at ~41%. The penetration is expected to increase to 45-50% by Fiscal 2026.

D. Key Challenges

The healthcare industry in the country continues to face certain challenges which including amongst others are those related to increasing regulatory oversight, heightened competition and the availability of clinical talent.

> Rising healthcare costs have prompted increased regulatory scrutiny that has and may continue to take shape in the form of aspects such as margin capping and tariff control in both the hospital and the diagnostics space. These could impact service offerings, revenue mix and other operational parameters.

> Lack of availability of clinical talent continues to be a critical aspect that needs to be addressed in order to maintain high standards of care and ensuring the sustainability of healthcare systems in the longer term.

E. Future Outlook

The hospital sector in India has become more resilient and strategic in the wake of the COVID-19 pandemic. As the industry continues to evolve, there has been a notable surge in interest from investors, private equity firms, corporate entities, and healthcare players, all seeking opportunities to invest in the sector. This growing interest has also led to consolidation opportunities, emphasising the importance of achieving scale and size to optimise operational efficiency and leverage. However, despite these promising developments, the market remains highly competitive, and regulatory uncertainties continue to pose challenges.

F. Financial Position

During the financial year under review, the Company achieved a total income of Rs.31,18.44 lakhs as compared to Rs.28,52.43 lakhs in the previous year, registering a growth of around 9.3%. Revenue from operations stood at Rs.29,83.82 lakhs as against Rs.27,25.50 lakhs in the previous year, reflecting improved business performance. On the expenditure side, total expenses increased marginally to Rs.31,40.61 lakhs from Rs.30,15.19 lakhs in the preceding year, mainly due to higher employee benefit costs and finance costs. Consequently, the Company reported a net loss before exceptional items and tax of Rs.22.16 lakhs as compared to a loss of Rs.162.76 lakhs in the previous year. This significant reduction in losses highlights the Companys focus on cost optimization and improved operational efficiency. The management remains confident that with continued growth in revenues and prudent expense management, the Company is well positioned to achieve profitability in the coming years.

G.RATIOS

Debt Equity ratio = Total debt divided by Total equity where total debt refers to sum of current & non-current borrowings

Reason for change more than 25% Due to New Loan taken

Debt Service Coverage Ratio = Earnings available for debt services divided by Total interest and principal repayments

Reason for change more than 25%: Decreased due to decrease in loss and decrease in repayment of principal amount loan

Inventory Turnover Ratio = Cost of materials consumed divided by closing inventory

Reason for change more than 25%: Due to Expansion in Cardiology Department