Indraprastha Medical Corporation Ltd Management Discussions

1.0 OVERVIEW OF INDIAS MACROECONOMIC ENVIRONMENT AND HEALTHCARE LANDSCAPE

1.1 Indias GDP Performance and Outlook

India continues to remain one of the fastest-growing major economies globally, supported by resilient domestic demand, government-led infrastructure spending and improving investment activity. Following a contraction in FY21, the economy has demonstrated strong recovery and sustained growth momentum.

Real GDP growth stood at 9.2% in FY24, moderated to 6.5% in FY25 and recovered to 7.7% in FY26, reflecting resilient domestic demand in the backdrop of a challenging global environment.

Growth during FY26 was supported by healthy private consumption, sustained public capital expenditure, improving services activity and stable macroeconomic fundamentals. The country also benefited from a resilient banking system, increasing formalisation of the economy and continued investments across infrastructure and manufacturing sectors.

Global economic growth remained moderate during FY26 amid geopolitical tensions, trade-related disruptions and uneven recovery across major economies. Looking ahead, the global environment continues to present uncertainties, particularly around trade flows, commodity prices and geopolitical developments.

For India, growth is expected to remain robust with strong domestic demand, rising urbanisation, favourable demographics and increasing investments across key sectors of the economy. However, global trade disruptions, commodity price volatility, geopolitical developments and fluctuations in capital flows may continue to influence the near-term economic outlook. Despite these uncertainties, India remains well positioned to sustain its growth momentum supported by its large domestic market, improving infrastructure and ongoing economic reforms.

Source: National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI); IMF World Economic Outlook, 2026.

1.2 India emerges as the worlds most populous country

India has emerged as the worlds most populous country, accounting for approximately one-sixth of the global population. Compared to many developed economies facing ageing populations and slower workforce growth, Indias favourable demographic profile and large working-age population continue to support long-term economic activity.

1.3. Indias urbanisation expected to increase steadily

While Indias urbanisation levels remain lower than many developed economies, the country continues to witness steady migration towards urban centres. This ongoing urbanisation trend is expected to support demand for infrastructure and organised services across sectors. It is projected that 40% of Indias population will live in urban areas by the Year 2030.

1.4. Rising incomes and consumption

Indias per capita income increased to Rs. 98,374 in fiscal 2023, a CAGRof 4.1 %, growing with increased GDP activity and rising job opportunities. Although Indias per capita income remains below that of developed economies, rising income levels and expanding middle-class consumption continue to improve affordability and support greater spending.

1.5. Healthcare under-penetration and rising affordability support long-term growth

Healthcare expenditure in India remains lower than many developed and emerging economies, indicating significant headroom for growth as affordability, awareness and insurance penetration improve. In contrast, developed nations such as United States, Germany, France, Japan and the United Kingdom allocate higher share of their GDP to healthcare compared to developing countries like India, Vietnam and Indonesia. Compared to many developed markets with stronger public healthcare systems, private healthcare providers play a significant role in Indias - healthcare delivery ecosystem. The general expenditure on health as a % of Current Healthcare Expenditure was skewed towards Private Health

expenditure at 67%. Capacity constraints in the public healthcare system, coupled with increasing demand for quality healthcare services, are expected to support long-term opportunities for organised healthcare providers.

1.6. Healthcare infrastructure and talent

India continues to face structural gaps in healthcare infrastructure and talent availability, including lower hospital bed and healthcare professional availability per capita compared to several global benchmarks. India had approximately 7.4 physicians and 18 nurses per 10,000 population at the close of 2021. These gaps remain more pronounced across non-metro and underserved regions, highlighting the need for continued investment in healthcare infrastructure, talent development and capacity creation.

Source: Crisil

2. INDUSTRY STRUCTURE & DEVELOPMENTS

2.1. Indias Healthcare Service Delivery Ecosystem

The Indian healthcare ecosystem comprises multiple interconnected segments. These segments collectively support healthcare delivery across the continuum of care.

Healthcare delivery in India is broadly classified into primary, secondary and tertiary care, based on the complexity of treatment, level of specialisation and infrastructure requirements.

2.2 Assessment of Indias Healthcare Delivery Market

According to Crisil Intelligence, the Indian healthcare delivery market is expected to witness steady growth over the coming years, supported by increasing healthcare demand and continued expansion across organised healthcare providers.

Growth is expected to be supported by increasing demand for healthcare services, expansion in hospital capacity and higher realisation levels.

The in-patient department (I PD) continues to account for a significant share of the market in value terms, while outpatient services (OPD) contribute the balance.

Healthcare delivery in India continues to be supported by both public and private sector participation, with the private sector maintaining a significant share of organised healthcare services.

2.3. Growth Levers influencing Healthcare Industry

Indias healthcare industry continues to be shaped by demographic, economic, technological and structural factors that influence healthcare demand, accessibility and service delivery. The industry is broadly characterised by the following:

2.3.1. Increasing income and consumption levels, with greater affordability, is expected to support higher adoption of preventive care, diagnostics and quality healthcare services over the long term. Increasing insurance penetration is also contributing to wider healthcare utilisation across segments.

2.3.2. Ageing demographics and changing healthcare needs: Life expectancy is gradually increasing the share of the elderly population, leading to higher demand for specialised healthcare infrastructure and age-related treatments. Prevalence of lifestyle-related ailments like hypertension, diabetes, etc is expected to sustain demand for healthcare services over the long term.

2.3.3. Widening gaps in access and consumption remains uneven across regions in India. Variations in infrastructure availability, particularly between urban and rural areas, continue to influence healthcare consumption patterns. Government initiatives aimed at improving affordability and access have strengthened the healthcare ecosystem. Government schemes such as Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY) continue to improve healthcare access and support treatment affordability. However, infrastructure and distribution gaps persist across certain regions in India, creating opportunities for organised healthcare providers to expand their presence.

2.3.4. Indias disease profile has undergone a structural shift, with Non-Communicable Diseases (NCDs) accounting for a growing share of the overall disease burden. Lifestyle-related risk factors such as unhealthy diets, sedentary lifestyles, hypertension, diabetes and obesity continue to contribute to rising incidence

of cardiovascular diseases, cancer and metabolic disorders.

2.3.5. Technology, a Key Driver in Modern Healthcare Delivery, continues to transform healthcare delivery in India, supporting improvements in clinical outcomes, operational efficiency and patient experience. Healthcare providers are increasingly investing in advanced medical technologies and digital

platforms to enhance diagnosis, treatment and care delivery. The adoption of telemedicine, digital health platforms, data analytics and artificial intelligence is improving patient engagement, clinical decision-making and resource utilisation. Increasing digital adoption is also supporting the growth of organised healthcare formats, including diagnostics, retail health and online pharmacy platforms.

2.3.6. Growing Momentum in Medical Value Travel (MVT), India has emerged as a preferred destination for medical value travel, supported by cost competitiveness, clinical expertise and advanced medical infrastructure. The country benefits from a significant cost advantage compared to developed markets while delivering comparable clinical outcomes. Medical value travel continues to be supported by demand for specialities such as cardiac care, orthopaedics and oncology. Government initiatives under the "Heal in India" programme further support Indias positioning as a medical and wellness destination.

2.3.7. Rising Investments in the Indian Healthcare space: The Indian healthcare sector continues to attract strong investor interest, supported by structural demand growth, cost competitiveness and an evolving policy environment. Continued investments are supporting capacity expansion, technology adoption and service diversification across the healthcare ecosystem.

The Indian hospital sector in FY27 is expected to witness significant bed additions across Tier I and Tier II cities, led by both listed hospital chains and regional healthcare providers.

According to Crisil Research, listed hospital chains are expected to add approximately 24,500-25,500 beds over FY26- FY29. In addition, smaller hospital chains are projected to add 8,000-9,000 beds during the same period, reflecting broad-based expansion across the sector. This reflects a structural shift towards organised and scalable healthcare delivery platforms.

During FY26, the sector witnessed continued private equity and venture capital activity across hospitals, healthcare services and allied segments. A leading healthcare-focused fund raised over US$1 billion, with a significant portion earmarked for investments in India. In addition, a prominent global healthcare investor led a funding round in a womens healthcare and hygiene platform during the year. Other global investors also continued to reaffirm their commitment to Indias healthcare opportunity through investments across healthcare platforms and services.

2.3.8. Health insurance penetration in India has improved steadily, although it continues to remain relatively low, indicating significant headroom for future expansion by increasing participation from private insurers. As insurance coverage expands, healthcare utilisation and hospitalisation rates are expected to increase, supporting sustained demand for preventive care, diagnostics and advanced treatments.

3. COMPANY OVERVIEW

Founded in 1988 as a joint venture Company between the Govt, of NCT of Delhi and Apollo Hospitals Group, IMCL is a first of its kind in Healthcare under the public-private partnership model.

Through this joint venture, Indraprastha Apollo Hospitals continues to focus on delivering integrated and technology- enabled healthcare services, supported by its clinical expertise, expanding healthcare network and digital capabilities.

1. Clinical Excellence and Speciality Focus:

Indraprastha Apollo Hospitals continues to focus on delivering high-quality clinical outcomes across specialities, supported by experienced medical professionals, advanced treatment capabilities and robust clinical protocols. The Company continues to strengthen its presence across high-acuity specialities such as cardiac care, oncology, neurosciences, gastroenterology and orthopaedics, supported by continued investments in advanced clinical capabilities and complex care programmes.

Indraprastha Apollo Hospitals encourages all of its medical professionals and other employees to participate in ongoing medical education and skill development initiatives. To enhance patient outcomes, the Company ensures that its professionals and staff remain up to date on the latest medical techniques and procedures.

IMCL is accredited by the Joint Commission International, USA, in recognition of adherence to international healthcare quality standards for patient care and hospital management. JCI is the worlds premier accreditation body for patient safety and quality healthcare.

2. Driving Operating Efficiency

The core of Indraprastha Apollo Hospitals growth strategy is to maximise operating efficiency and profitability across the network. Greater integration, improved supply chain management, and human resource development are the three essentials for increasing efficiencies. The goal is to reduce the cost of expensive drugs and medical consumables such as stents, implants, and other surgical materials by standardising across the network, optimising procurement costs, consolidating suppliers, and optimising use of medical consumables by establishing guidelines for medical procedures. These measures are critical for driving margin expansion, particularly in the context of rising input costs and regulatory price caps.

Indraprastha Apollo Hospitals constantly endeavours to reduce the Average Length of Stay (ALOS). Today, new advancements in medical technology, such as the introduction of minimally invasive and robot-assisted surgeries, have significantly reduced surgical trauma and patient recovery time. These innovations not only enhance clinical differentiation but also contribute to higher ARPP (Average Revenue Per Patient) by enabling more complex, higher-value procedures.

3. Technology and Innovation:

Indraprastha Apollo Hospitals continues to strengthen its commitment to clinical excellence through the adoption of cutting-edge technologies and advanced medical protocols. These advancements aim to elevate the standard of patient care and improve clinical outcomes across its network.

Indraprastha Apollo Hospitals has been at the forefront of medical innovation, having introduced several pioneering technologies in India—including the countrys first MRI, CT, and PET CT systems; Asias most advanced Cyber Knife; and Gyroscopic Radiosergery System (ZAP).

Indraprastha Apollo Hospitals continues to leverage technology to improve operational efficiency and expand healthcare access. Initiatives such as Apollo 24/7, digital health platforms, data analytics and advanced medical technologies continue to support integrated and personalised healthcare delivery.

4. Medical Tourism:

Assured Pricing Plans were introduced to address the disparity between the cost and pricing of surgical procedures, focusing on the intrinsic value of the delivered service. These plans cover a wide range of surgical procedures and are designed to enhance transparency and predictability in healthcare costs.

This approach not only improves accessibility but also supports Indraprastha Apollo Hospitals in targeting and serving the growing Medical Value Travel (MVT) market. MVT has become a significant focus area, as Indias competitive healthcare costs and advanced medical services attract international patients.

By aligning Assured Pricing Plans with MVT initiatives, Indraprastha Apollo Hospitals aims to strengthen its value proposition for international patients by offering both price assurance and access to high-quality clinical outcomes.

5. Infection Control and Environment

The Infection Prevention and Control Program, forms an integral part of our organisation since many years now. Reducing the preventable part of health care associated infections (HCAI) is central to our program. Through implementation of ‘Care Bundles, our healthcare indices currently stand at 0.55, 0.94 and 0.54 per 1000 device days respectively for central-line associated bloodstream infections (CLABSI), ventilator associated pneumonia (VAP) and catheter associated urinary tract infections (CAUTI) respectively and are comparable internationally to best centers.

Antimicrobial Stewardship Program forms a major focus for the Program and aims at judicious use of antimicrobials. Besides strict vigilance of highly restricted antimicrobials which are not allowed to be issued without clearance from Infection Control, antimicrobials without high impact scientific evidence are not allowed to form a part of our hospital formulary. Periodic review of antimicrobial guidelines is carried out. Diagnostic stewardship is integrated within the antimicrobial stewardship program. Syndromic molecular array panels targeted for different disciplines aid in identifying infections early and initiating appropriate antimicrobials in a timely and targeted manner.

Continuous efforts are aimed towards increase of Hand-hygiene through innovative tools so as to spread the message across not only hospital-wide but other medical institutions and to involve the community also in this most important hygiene aspect. Staff safety remains paramount to the Infection Control Program. Various activities aimed towards infection prevention and rational use of antimicrobials were conducted on World Hand Hygiene Day on May 05, 2025 so as to spread awareness not only amongst our own healthcare members but also the attendants and visitors. Reinforcement of basic infection control precautions, hand-hygiene, mask and respiratory etiquette, biomedical waste management, sharps injuries prevention, safe personal protective equipment (PPE) use and care bundles is carried out through innovative tools in training and refresher campaigns. Annual mock drills are simulated for the staff for increased vigilance and preparedness for infectious disease epidemics. The evolution of our Infection Control Program continues to strive for infection prevention in healthcare facilities and involve the community.

6. Service Excellence and Patient Centricity:

Indraprastha Apollo Hospitals continues to strengthen patient-centred care through a combination of compassion, service excellence, post-discharge support, and digital innovation.

Creating Tender Loving Care (TLC) moments and sharing kindness stories provides a platform for enhancing the patient experience and service excellence. Indraprastha Apollos Enhanced Connected Care (ECC) platform leverages Al-enabled monitoring and wearable technologies to improve patient safety and clinical outcomes. This monitoring mechanism has helped several patients by reducing Code Blue events, ICU readmissions and nursing burden, while enhancing care delivery efficiency.

4. OPPORTUNITIES AND THREATS

The Indian healthcare sector continues to present significant growth opportunities, supported by demographic trends, increasing healthcare awareness and technology adoption. At the same time, the sector remains exposed to regulatory, competitive and operational challenges which require continuous monitoring and mitigation.

4.1. Opportunities

5. RISKS AND CONCERNS

Indraprastha Apollo Hospitals is exposed to a wider range of risks and uncertainties than it faced in the past, owing to the multi-fold increase in scale of its operations since inception. These internal and external factors may impact the achievement of the organisations strategic, operational, or financial goals.

The business environment in which Indraprastha Apollo Hospitals operates is characterised by heightened competition and market volatility. In the normal course of business, the Company is exposed to a variety of risks. Risk is an inherent aspect of entrepreneurial activity, often accompanied by the potential for profit and growth.

Indraprastha Apollo Hospitals believes that identifying business sustainability risks and opportunities on a continuous basis and integrating them into the existing risk management framework is critical to long-term success. The Company has implemented processes that promote risk awareness and foster a strong, organisation-wide risk-management culture.

Under the oversight of the Board of Directors, Senior Management in the Company actively manages risk. While risks cannot be entirely eliminated, appropriate mitigation strategies are in place for areas identified as having significant exposure. In addition, the risk management systems aim to keep risks within acceptable and manageable limits.

5.1 Internal Controls

Indraprastha Apollo Hospitals is committed to upholding a high standard of internal controls across its operations. A synchronised internal control framework, supported by a well-designed and robust system, enables optimal utilisation and safeguarding of assets, timely and accurate preparation of financial statements and management reports, and compliance with statutory laws, regulations, and Company policies.

While no system can offer absolute assurance against material loss or financial misstatement, the internal control systems, which are reviewed periodically, provide reasonable assurance that all assets are adequately protected. These systems are designed not to eliminate risk entirely, but to manage the risk of failing to meet business objectives effectively. The controls also ensure that all transactions are properly evaluated, authorised, recorded, and reported. The framework adheres strictly to relevant procedures, laws, rules, and regulations. In addition, extensive budgetary control mechanisms allow timely comparison of actual performance against forecasts, ensuring operational discipline.

At Indraprastha Apollo Hospitals, management is responsible for assessing risks across all areas of business operations and for implementing efficient and effective control measures, while maintaining compliance with both internal protocols and external regulations. When reviewing internal controls, due consideration is given to the nature and likelihood of risks, as well as the cost-benefit of mitigating those risks.

6. DISCUSSION ON FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS

During the year under review, the Company recorded income from operations Rs. 1482.51 Crore against Rs. 1356.36 Crore in the corresponding period last fiscal.

The following table shows the key drivers of our revenues for the periods presented:

Year Ended March 31,2026

Particulars	March 31,2026	March 31,2025	increase (Decrease)	% increase (Decrease)
Discharges	63,236	64,423	-1,187	-2%
Revenues per patient (Rs.)	225,338	202,869	22,469	11%
Average length of stay (days)	3.23	3.07
Out-patients	607,485	596,285	11,200	2%
Revenue per bed day (Rs.)	69,714	66,064	3,650	6%

7. KEY FINANCIAL RATIOS

Particulars	Numerator	Denominator	2025-26	2024-25	Variance
Current Ratio (in times)	Total Current Assets	Total Current Liabilities	2.46	2.41	2%
Debt-Equity Ratio (in times)	Total Debt	Shareholders Equity	NA	NA	NA
Debt Service Coverage Ratio (in times)	Earnings available for debt service	Debt Service	NA	NA	NA
Return on Equity Ratio (in %)	Net profit after taxes	Average Total Equity	28%	30%	-7%
Inventory turnover ratio	Cost of goods sold or sales	Average inventory	34.52	31.74	9%
Trade Receivables Turnover Ratio (in times)	Net credit sales	Average Trade Receiva-bles	9.12	11.23	-19%
Trade Payables Turnover Ratio (in times)	Net credit purchases	Average Trade Payables	7.40	6.37	16%
Net Capital Turnover Ratio (in times)	Revenue from opera-tions	Average working capital	165.25	151.19	9%
Net Profit Ratio (in %)	Profit for the year	Revenue from operations	12%	12%	6%
Return on Capital Employed (in %)	Profit before tax and finance cost	Capital Employed = Net worth + deferred tax liabil-ities	37%	40%	-7%
Return on Investment (in %)	Income generated from invested funds	Average invested funds in treasury investments	NA	NA	NA

8. OUTLOOK

Indraprastha Apollo Hospitals continues to deliver on its commitment to high-quality, sustainable healthcare while accelerating growth across its key service lines. As we move through Financial Year 2026, the Hospital remains focused on strengthening its market leadership through clinical excellence, innovation, and operational efficiency.

Recognised as one of Indias leading integrated healthcare providers, the Hospital has built a strong reputation founded on trust, safety, and patient-first values. Its clinical protocols, advanced technologies, and experienced medical teams have positioned it as a preferred destination for both domestic and international patients.

The Hospitals people strength remains its greatest asset. Its highly qualified doctors have consistently delivered exceptional outcomes in complex procedures, earning wide recognition and awards across the healthcare industry. Supported by skilled clinical and non-clinical staff, and guided by an enabling leadership ecosystem, the Hospital continues to maintain high standards of care and service delivery.

To drive sustainable growth, the Company is focusing on expanding Centres of Excellence to capture higher patient volumes, increasing the share of advanced procedures and innovative therapies, enhancing the insurance payer mix for improved revenue visibility and implementing cost-optimisation and efficiency measures to strengthen margins.

These initiatives, combined with prudent financial management, are expected to support improved EBITDA margins and enhanced Return on Capital Employed (ROCE).

With its robust brand equity, operational discipline, and strategic growth initiatives, the Hospital remains well-positioned to deliver long-term value creation for stakeholders, while continuing to provide superior healthcare outcomes to its patients.

9. ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE (ESG)

The Company continues to integrate Environmental, Social and Governance (ESG) considerations into its business operations and decision-making processes, recognising that long-term value creation is closely linked to sustainable and responsible growth. Indraprastha Apollo Hospitals has strengthened its ESG framework over the years, embedding sustainability principles across its operations, stakeholder engagement and governance practices.

Environmental stewardship remains a key pillar of Indraprastha Apollo Hospitals sustainability strategy, with continued focus on energy efficiency, renewable energy adoption, emissions reduction, responsible resource utilisation, and compliance-driven environmental management. Investments in renewable power procurement, digital optimisation and sustainable infrastructure are helping improve operational resilience while reducing environmental impact.

Indraprastha Apollo Hospitals also advanced its efforts in water conservation, waste management, and environmentally responsible

healthcare delivery. Water recycling initiatives, Zero Liquid Discharge facilities and 100% wastewater treatment continued to support responsible water stewardship, while robust biomedical waste anagement practices ensured regulatory compliance and safe disposal. The Company further leverages telemedicine and digital health platforms to improve healthcare access while reducing the environmental footprint associated with patient travel, reinforcing its commitment to sustainable and responsible growth.

10. HUMAN RESOURCES / INDUSTRIAL RELATIONS

Indraprastha Apollo Hospitals believes that its people remain the foundation of its clinical excellence, patient-centric culture and long-term growth. The Company continues to focus on attracting, developing and retaining high-quality talent while strengthening employee engagement, leadership capabilities and organisational effectiveness across its healthcare network.

The total number of employees in The Company as on March 31, 2026, was 3000 as against 3035 employees in the previous year. The Company has also engaged contractors for various support services in the Hospital and they have deployed 1172 workers as against 1091 workers in the previous year. Besides the above, there are Consultant Doctors who work on a ‘Fee for Service basis.

Recognition and Reward:

Recognising and rewarding healthcare professionals is central to fostering a motivated, engaged, and high-performing workforce. At Indraprastha Apollo Hospital, we believe that when healthcare professionals feel valued, they are empowered to deliver compassionate, high-quality care, ultimately leading to improved patient outcomes. Consistent

efforts are made across the organisation to acknowledge excellence in performance and reinforce our culture of care and commitment.

Key recognition programs include:

1. Academic Excellence Awards (Clinical and Nursing)

2. ApolloAmbassadorAwards

3. Honesty Awards

4. Best ICU and Floor Awards

5. Annual Sports Awards

6. Service Excellence Awards

Organisational Accolades for 2025-26:

• Biomedical contract management - Digital Health Excellence Awards

• Best multispecialty hospital BY The Week

Training and Development:

Talent Development and Talent Management continue to be institutionalised for delivering outstanding patient experience. Training has been extensively used as a potent tool to engage and energize talent. Commitment and competence of employees are key drivers of overall organisational performance and thus every endeavour is made to strengthen organisational culture and nurture the best talent.

Workplace Safety and Well-being:

Our POSH (Prevention of Sexual Harassment) awareness program continues to show strong engagement, reflecting our dedication to a safe and respectful workplace.

As part of our commitment to supporting the health and well-being of our staff, hospital emphasises on the importance of Annual Health Checks. Regular health assessments have been a crucial gateway for identifying any potential health issues early on and ensuring that the employees and their families stay healthy throughout the year.

Multiple awareness and reinforcement session implemented on various topics viz - Ergonomics, Handling Compassion fatigue and staff burn outs, handling and supporting second victims of adverse or sentinel events, Staff mental health, Yoga sessions, Stress management Sessions to name a few. These initiatives reflect our holistic approach to employee well-being.

11. CAUTIONARY STATEMENT

Some of the statements made in this Management Discussion and Analysis which describe the Companys objectives, projections, estimates, expectations and predictions may include certain "forward looking statements" within the scope of applicable laws and regulations. These statements and forecasts inherently involve risks and uncertainties, as they pertain to future events or circumstances that are beyond the Companys direct control.

There are a variety of factors that may cause actual events or trends to differ materially from those reflected or implied by such forward-looking statements and predictions. Key developments that could influence the Companys performance include rising material costs, rapid technological changes, and major shifts in the political or economic landscape, tax regimes, and labor dynamics.