Tejnaksh Healthcare Ltd Management Discussions

Annexure - III

INDUSTRY OVERVIEW

Healthcare has become one of Indias largest sectors, both in terms of revenue and employment. It covers hospitals, medical devices, clinical research, outsourcing, telemedicine, health insurance, and medical tourism, making it one of the most dynamic industries in the country.

The Indian healthcare delivery system is dual in nature:

• The public sector provides primary healthcare and limited secondary/tertiary care through PHCs and district hospitals.

• The private sector, with strong presence in metros and Tier-I/II cities, dominates in secondary, tertiary, and quaternary care, and continues to expand aggressively into semi-urban regions.

Indias advantage lies in its well-trained medical professionals and cost efficiency. Treatments in India cost nearly one-tenth of what they do in the US or Western Europe, making India a leading global hub for medical tourism.

The Indian hospital market stood at USD 132-136 billion in 2024, and is projected to grow at a CAGR of 7-8%, reaching USD 193-200 billion by 2032. Some estimates suggest an even higher CAGR of 10%+ for 2025-31, driven by insurance penetration, private equity investment, and digital adoption.

The healthcare sector overall was valued at USD 372 billion in 2023 and employs 7.5 million people (2025). With rising investments in digital health, telemedicine, and AI, the sector is expected to generate an additional 2.7-3.5 million tech-driven jobs in coming years.

Indias public healthcare expenditure increased to 2.1% of GDP in FY23, up from 1.6% in FY21, reflecting government commitment to healthcare access. Meanwhile, health insurance premiums touched ^2,63,082 crore (USD 31.8 billion) in FY24 (till Feb 2025), with health insurance contributing 33.3% of gross written premiums.

The medical tourism market was valued at USD 7.7 billion in 2025, and is projected to reach USD 14.3 billion by 2029, supported by ~6.9% of total international tourists visiting India for treatment.

The e-health market is expected to reach USD 10.6 billion by 2025, supported by rapid adoption of teleconsultation platforms and electronic health records.

SWOT ANALYSIS Strengths

• Large and growing healthcare network

• Strong base of highly skilled doctors and medical colleges

• Low-cost, high-quality treatment options

• Rising private investments and global medical tourism appeal

• Adoption of technology and digital health platforms

Weaknesses

• Rural-urban imbalance in healthcare access

• Capital-intensive nature of hospital infrastructure

• Limited public spending at ~2% of GDP (lower than global average)

• Infrastructure gaps across Tier-II/III cities

Opportunities

• Expansion of insurance-driven healthcare access (PM-JAY, private insurers)

• Rising lifestyle diseases creating demand for speciality hospitals

• Strong demand in Tier-II/III cities and underserved regions

• Booming medical tourism and diagnostic services

• Increased focus on digital health, wearables, and AI-driven care

Threats

• Shortage of skilled manpower, especially in smaller cities

• Regulatory pressures and price controls

• High capital costs for scaling hospital infrastructure

• Cybersecurity risks as hospitals digitize operations

GOVERNMENT INITIATIVES

• Launch of MedTech Mitra to boost indigenous medical device innovation and reduce import dependence.

• Expansion of AIIMS network, with five new institutes inaugurated in 2025 across Gujarat, Punjab, Uttar Pradesh, West Bengal, and Andhra Pradesh.

• Budget allocation of ^90,659 crore (USD 10.9 billion) for healthcare in FY25, with focus on PMSSY, NHM, and Ayushman Bharat - PM-JAY.

• International MoUs with Ecuador and Netherlands to strengthen medical product regulation and exports.

RECENT DEVELOPMENTS

• Telemedicine: Expected to grow at a global CAGR of 20.5%, enhancing efficiency and patient reach.

• Artificial Intelligence & ML in Healthcare: Global market projected to hit USD 119.8 billion by 2027, revolutionizing diagnostics and treatment.

• Value-Based Care Models: Shifting focus to outcomes-based payments for better affordability and care quality.

• Wearables & Remote Monitoring: Surge in cardiac and blood pressure monitoring devices; India expected to see fastest adoption in Asia-Pacific.

• Healthcare Cybersecurity: Market projected to reach USD 24.1 billion by 2026, crucial as digital adoption accelerates.

OUTLOOK FOR THE COMPANY

With the hospital industry in India projected to cross USD 190 billion by 2032, Tejnaksh Healthcare is positioned to leverage:

• Expansion into Tier-M/MI markets, where hospital demand is outpacing supply.

• Digital healthcare models (telemedicine, IoMT, cloud, AI-driven diagnostics).

• Insurance partnerships and empanelments, improving access and steady revenue streams.

• Specialty hospital and single-specialty models, which are attracting strong private equity interest across India. Despite global uncertainties, Tejnaksh has sustained growth, backed by strong service delivery and niche expertise. The company is confident of outperforming industry averages through its unique business model and focus on patient-centric care.

ROAD AHEAD

• Indias healthcare sector, already a USD 130+ billion hospital market, offers long-term double-digit growth potential.

• Growing awareness, medical tourism, and government policy support will continue driving demand.

• By strengthening its financial sustainability, digital adoption, and patient engagement, Tejnaksh aims to expand its presence, enhance care quality, and build a strong competitive position.

Healthcare Budget Overview

• The total allocation to the healthcare sector in FY 2024-25 stood at approximately ^90,958 crore, up slightly (around 2%) from f89,155 crore in FY 2023-24.

• The Ministry of Health & Family Welfare (Dept. of Health & Family Welfare) received roughly ^87,657 crore, marking a 13% increase over the revised estimates of the prior year. Meanwhile, the Dept. of Health Research saw an increase from f2,893 crore to ^3,002 crore (~4% rise).

Centrally Sponsored Schemes & Infrastructure

• National Health Mission (NHM) received ^36,000 crore, a 14% increase from the 2023-24 revised estimate of f31,551 crore.

• Allocation for the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) jumped significantly?from f2,300 crore to ^3,757 crore (about +63%).

• Other increases included:

o Maternal & Child Health: ~f28,783 crore (~23% increase)

o Pradhan Mantri Swasthya Suraksha Yojana (PMSSY): f2,200 crore (16% increase) o National Tele-Mental Health Programme: f90 crore (38% increase)

o Disease Surveillance / Outbreak Preparedness: Budget nearly doubled, including NCDC and related emergency measures

Human Resources & Research

• Human resources for health and medical education faced a 16% reduction, dropping to f1,275 crore from f1,520 crore.

• However, capacity building within the Dept. of Health Research saw a 69% increase, with f147 crore allocated.

• Biotechnology R&D got a boost?rising from f500 crore to ^1,100 crore.

• Decreases included a ~35% drop in budget for bio-security preparedness, pandemic research, and One Health initiatives.

Ayushman Bharat (AB-PMJAY)

• Allocation increased from f6,800 crore to ^7,300 crore (~7% increase), expanding coverage to include all ASHA and Anganwadi workers and helpers.

Implications for the Hospital Industry Infrastructure & Coverage Expansion

• Significant funding increases under NHM and PM-ABHIM signal ongoing investments in upgrading primary and secondary healthcare infrastructure?beneficial for hospital capacity expansion.

• The Ayushman Bharat scheme expansion and increased budget smooth the path for hospitals to tap into public health financing via improved insurance coverage.

Human Resource Constraints

• A 16% cut in medical education funding may limit the growth of the healthcare workforce?a concern for both hospital staffing and long-term industry expansion.

• On the positive side, increased focus on biotech and research capacity building may foster innovation and boost high-skilled talent pipelines.

Research, Surveillance & Specialty Care

• Large boosts to bio-tech R&D, mental health, and outbreak preparedness strengthen institutional capabilities? hospital systems can leverage these in disease management and specialized care.

• Allocation cuts in pandemic-related preparedness, however, suggest a reversion to pre-COVID priorities.

Summary Table
Focus Area	Budget Change	Implication for Hospitals
NHM & Infrastructure (PM- ABHIM)	+14% and +63% respectively	Enhanced infrastructure & capacity
Ayushman Bharat	+7% with expanded coverage	Increased patient inflow via insurance programs
Human Resources	-16% funding	Potential staffing challenges ahead
Biotechnology & Research	+69% in capacity building; +120% in biotech	Innovation, advanced treatment, R&D strengths
Surveillance & Mental Health	+38% to +93%	Improved support systems, tertiary care focus
Bio-security Preparedness	-35%	Reduced focus on pandemic resilience

Conclusion

The Union Budget 2024-25 reflects a clear emphasis on strengthening healthcare infrastructure, expanding public coverage, and investing in specific innovation and surveillance initiatives. For the hospital industry, this means:

• Opportunities for growth in infrastructure-driven expansion and service delivery.

• Increased patient access and revenue through expanded insurance coverage.

• Innovation possibilities via enhanced R&D and biotech investments.

• Staffing and medical education remain pressure points requiring attention.

On behalf of the Board of Directors,

For Tejnaksh Healthcare Limited

Sd/-

Dr. Ashish Rawandale

Chairman