Vaidya Sane Ayurved Laboratories Ltd Management Discussions

Financial Year 2025-26

Forward-Looking Statements

This Management Discussion and Analysis ("MD&A") contains statements that describe the Companys objectives, strategies, expectations, projections, outlook and assumptions, which may constitute "forward-looking statements" within the meaning of applicable provisions of the Companies Act, 2013, the Securities and Exchange Board of India ("SEBI") regulations and other applicable laws and regulations.

Forward-looking statements are based on certain assumptions, expectations of future events and information currently available to the management. These statements are subject to various risks, uncertainties and other factors that could cause actual results, performance or achievements of the Company to differ materially from those expressed or implied by such statements.

Important factors that may influence the Companys operations include, among others, changes in macroeconomic conditions, healthcare policies, government regulations, taxation laws, clinical and technological developments, competitive intensity, availability of qualified healthcare professionals, consumer behaviour, insurance penetration, inflationary pressures, geopolitical developments and other domestic as well as global economic factors.

The Company undertakes no obligation to publicly update, revise or modify any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time, and other applicable accounting principles generally accepted in India. These financial statements have been prepared on a historical cost basis, except where otherwise stated, and on the accrual basis of accounting.

The discussions contained in this MD&A should be read together with the Audited Standalone and Consolidated Financial Statements, the Notes forming part thereof, the Directors Report and other sections of this Annual Report.

Throughout this report, the terms "VSAL", "the Company", "Vaidya Sane Ayurved Laboratories Limited", "Madhavbaug", "we", "our" and "us" refer to Vaidya Sane Ayurved Laboratories Limited and, where the context requires, its subsidiaries and businesses.

GLOBAL HEALTHCARE INDUSTRY OVERVIEW

The global healthcare industry continues to experience structural transformation, driven by ageing populations, rising prevalence of chronic diseases, technological innovation, digital health adoption and increasing healthcare expenditure across developed and emerging economies.

Healthcare systems worldwide are increasingly shifting from illness-based treatment models towards preventive, predictive and personalised healthcare. Artificial Intelligence (AI), digital therapeutics, remote patient monitoring, wearable technologies and data-driven clinical decision-making are fundamentally changing the delivery of healthcare services.

Simultaneously, lifestyle-related disorders—including cardiovascular diseases, diabetes, obesity and hypertension—continue to represent one of the largest global public health challenges. According to international health estimates, non-communicable diseases account for nearly three-fourths of global mortality, increasing the need for integrated healthcare solutions that focus on disease prevention, long-term management and improved quality of life.

The global wellness economy and preventive healthcare sectors have also witnessed significant expansion, reflecting changing consumer preferences towards holistic healthcare, evidence-based traditional medicine and integrated treatment approaches. This evolving healthcare landscape presents significant opportunities for organisations capable of combining clinical excellence, scientific validation and technology-enabled healthcare delivery.

Against this backdrop, Ayurveda and integrative medicine are steadily gaining international recognition, creating new opportunities for Indian healthcare organisations possessing established clinical expertise, research capabilities and scalable healthcare delivery models.

INDIAN HEALTHCARE INDUSTRY

India continues to be one of the worlds fastest-growing healthcare markets, supported by favourable demographics, increasing life expectancy, rising healthcare awareness, expanding health insurance coverage and sustained public as well as private sector investments.

The Indian healthcare sector is expected to maintain strong long-term growth, supported by increasing demand for quality healthcare services, hospital infrastructure, diagnostics, preventive healthcare, digital health solutions and specialised treatment facilities.

Several structural factors continue to support this growth:

• Rising incidence of lifestyle-related diseases requiring long-term management.

• Increasing healthcare expenditure by both Government and private sector.

• Rapid growth in health insurance penetration.

• Expansion of healthcare infrastructure across Tier II and Tier III cities.

• Growing adoption of digital healthcare platforms and telemedicine.

• Increasing acceptance of preventive and wellness-oriented healthcare.

• Rising investments in hospitals, diagnostics and pharmaceutical manufacturing.

Government initiatives such as Ayushman Bharat, Ayushman Bharat Digital Mission, National Digital Health Mission, Production Linked Incentive (PLI) schemes, and continued policy support for the AYUSH ecosystem are further strengthening Indias healthcare infrastructure and improving accessibility to quality healthcare services.

The Company believes that these long-term structural drivers will continue to support sustainable growth opportunities for organised healthcare providers offering differentiated and outcome-oriented treatment models.

For Madhavbaug, this evolving healthcare ecosystem provides a significant opportunity to expand its integrated Ayurvedic healthcare model across preventive care, disease reversal programmes, hospital-based care, digital healthcare and specialised clinical services.

AYURVEDA INDUSTRY OUTLOOK

Indias Ayurveda industry has evolved into one of the fastest-growing segments of the healthcare and wellness ecosystem, driven by increasing consumer awareness, preference for natural therapies, government support for traditional medicine, and rising acceptance of evidence-based preventive healthcare.

The demand for Ayurvedic products and therapies has expanded beyond conventional wellness applications to encompass chronic disease management, preventive healthcare, nutrition, rehabilitation and lifestyle modification. Consumers today increasingly seek holistic healthcare solutions that focus not only on treatment but also on disease prevention, improved quality of life and long-term wellness.

The Ministry of AYUSH has played a pivotal role in strengthening the ecosystem through policy support, standardisation initiatives, quality assurance mechanisms, research promotion and international collaborations. Simultaneously, digital commerce, organised retail, teleconsultation platforms and health technology innovations have significantly improved accessibility to Ayurvedic healthcare across urban as well as rural India.

Growing scientific validation of Ayurvedic therapies, increasing clinical research, standardised manufacturing practices and greater regulatory oversight continue to enhance public confidence in Ayurveda both within India and globally.

The Company believes that these favourable industry trends provide significant long-term opportunities for organised healthcare providers that combine traditional Ayurvedic wisdom with scientific research, clinical evidence and modern healthcare delivery systems.

INDIAS GROWING BURDEN OF NON-COMMUNICABLE DISEASES

India continues to face one of the worlds largest burdens of Non-Communicable Diseases ("NCDs"), including cardiovascular diseases, diabetes, hypertension, obesity, stroke and chronic respiratory disorders.

Changing lifestyles, sedentary habits, unhealthy dietary patterns, increasing stress levels, rapid urbanisation and an ageing population have significantly increased the prevalence of lifestyle disorders across all age groups. These diseases account for a substantial proportion of mortality and healthcare expenditure in the country while placing increasing pressure on healthcare infrastructure.

Unlike communicable diseases, most NCDs require continuous monitoring, long-term treatment, behavioural modification and preventive intervention. Consequently, healthcare delivery is gradually shifting from episodic treatment towards comprehensive disease management programmes focused on prevention, rehabilitation and sustained patient engagement.

The growing emphasis on preventive healthcare, early diagnosis, personalised treatment and long-term disease reversal presents a significant opportunity for integrated healthcare organisations capable of delivering measurable clinical outcomes through multidisciplinary treatment protocols.

GOVERNMENT INITIATIVES AND POLICY SUPPORT

The Government of India continues to strengthen the healthcare ecosystem through progressive policy initiatives aimed at improving accessibility, affordability and quality of healthcare services.

Key initiatives such as Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY), the Ayushman Bharat Digital Mission (ABDM), expansion of digital health infrastructure, increased public healthcare expenditure, Production Linked Incentive (PLI) schemes for pharmaceuticals and medical devices, and continued policy support for the Ministry of AYUSH are expected to create a favourable operating environment for organised healthcare providers.

The Governments sustained emphasis on preventive healthcare, wellness, digital health records, telemedicine, medical value travel and research-driven traditional medicine continues to strengthen the long-term growth prospects of the Indian healthcare sector.

The Company believes that these policy initiatives will further improve healthcare accessibility while encouraging greater integration of evidence-based Ayurveda into mainstream healthcare delivery.

MADHAVBAUGS STRATEGIC POSITIONING

Vaidya Sane Ayurved Laboratories Limited has established itself as one of Indias leading integrated Ayurvedic healthcare organisations specialising in the prevention, management and reversal of lifestyle-related disorders.

Operating under the trusted "Madhavbaug" brand, the Company has built a differentiated healthcare ecosystem that integrates Ayurvedic therapies with modern diagnostics, evidence-based treatment protocols, technology-enabled patient management and clinical research.

As at the end of FY26, the Companys healthcare ecosystem comprised more than 320 clinics, 4 hospitals with over 134 operational beds, 46+ OPDs and Mini Clinics, and a network of more than 450 Ayurvedic physicians, serving patients across multiple states in India. Since inception, the Company has treated more than 10 lakh patients, demonstrating the scalability and effectiveness of its integrated healthcare model.

The Companys primary focus continues to be the treatment of chronic lifestyle disorders including coronary artery disease, diabetes, hypertension, obesity and related metabolic conditions through structured, non-invasive and evidence-based Ayurvedic therapies.

The Companys competitive advantage is built upon several key pillars:

• Integrated clinic and hospital network providing comprehensive continuum of care.

• Research-driven clinical protocols supported by scientific publications and evidence-based treatment methodologies.

• In-house manufacturing capabilities through subsidiary companies, ensuring quality, standardisation and supply chain efficiency.

• Proprietary digital healthcare platforms including MIB Pulse and Power MAP, enabling technology-assisted patient monitoring and clinical decision-making.

• Asset-light franchise expansion model supported by standardised operating procedures and centralised clinical governance.

• Growing insurance and corporate healthcare partnerships improving accessibility and affordability for patients.

• Strong leadership team with deep clinical expertise and an unwavering commitment to innovation in preventive healthcare.

The Company continues to strengthen its competitive position through strategic investments in hospital expansion, manufacturing integration, digital transformation, research, specialised healthcare verticals and international market development.

BUSINESS MODEL

The Companys integrated business model combines clinical services, hospital-based care, manufacturing, digital healthcare and research into a unified healthcare ecosystem.

Its primary revenue streams include:

• Clinic consultations and disease reversal programmes.

• Hospital-based treatments and rehabilitation services.

• Sale of proprietary Ayurvedic medicines, nutraceuticals and wellness products.

• Franchise operations and allied healthcare services.

• Corporate healthcare programmes and institutional partnerships.

• Insurance-supported healthcare services.

This diversified model enables the Company to generate recurring revenue while strengthening patient engagement throughout the healthcare journey.

The Companys strategy continues to focus on expanding patient access, improving clinical outcomes, increasing operational efficiency and creating sustainable long-term value for all stakeholders.

OPERATIONAL REVIEW

FY2025-26 marked another year of disciplined execution and strategic progress for Vaidya Sane Ayurved Laboratories Limited. Despite a dynamic business environment, the Company remained focused on strengthening its integrated healthcare ecosystem through expansion of its clinical network, enhancement of hospital infrastructure, investments in technology, manufacturing integration and continuous improvement in patient outcomes.

The Companys integrated model—comprising clinics, hospitals, digital healthcare platforms, research capabilities and manufacturing operations—continued to provide operational resilience while supporting sustainable long-term growth.

During the year, the Company further strengthened its position in the preventive and lifestyle disease management segment by expanding patient access, improving operational efficiencies and enhancing treatment delivery through standardised clinical protocols.

The Companys continued emphasis on evidence-based Ayurveda, supported by modern diagnostics and technology-enabled healthcare delivery, remains the cornerstone of its business strategy.

FINANCIAL PERFORMANCE REVIEW

The financial year 2025-26 witnessed encouraging growth across key financial parameters, reflecting the Companys disciplined execution strategy and the increasing acceptance of its integrated healthcare model.

Revenue from Operations for the year stood at Rs.106.91 crore, representing a growth of 18.89% over the previous financial year. The improvement was driven by higher patient engagement, improved operational performance across clinics and hospitals, increased healthcare service delivery and continued demand for the Companys specialised disease reversal programmes.

The Company continued to maintain a balanced approach towards growth and profitability while making strategic investments in brand building, technology platforms, hospital expansion, manufacturing capabilities and business development initiatives.

EBITDA (excluding other income) increased to Rs.15.42 crore, demonstrating continued operational efficiency and effective cost management. The Company also reported Profit After Tax of Rs.8.99 crore, registering healthy year-on-year growth and reflecting the improving profitability of its integrated healthcare operations. Basic Earnings Per Share improved to Rs.8.51, further strengthening shareholder value creation.

The Company remains committed to maintaining financial discipline through prudent capital allocation, effective working capital management and sustainable investment in future growth opportunities.

ENTERPRISE PERFORMANCE

Beyond the statutory financial statements, the Company closely monitors enterprise-level performance to assess the effectiveness of its integrated healthcare ecosystem.

During FY2025-26, the enterprise achieved collections of approximately 196.91 crore, reflecting the combined strength of the Companys clinics and hospital operations. Clinics continued to remain the principal contributor to enterprise collections, accounting for nearly 85%, while hospitals contributed the balance through specialised inpatient care and rehabilitation services.

The Companys asset-light franchise-led expansion strategy, supported by centralised clinical governance and standardised operating procedures, continues to provide scalability while maintaining operational consistency across the healthcare network.

BUSINESS SEGMENT PERFORMANCE

The Company operates through an integrated healthcare model comprising three complementary business verticals:

Clinics

The clinic network remains the primary growth engine of the Company. Through company-operated clinics, franchise centres and OPDs, Madhavbaug delivers specialised preventive and disease reversal programmes for cardiovascular diseases, diabetes, hypertension, obesity and other lifestyle disorders.

The clinic business continues to benefit from a scalable franchise model, standardised treatment protocols, technology-enabled patient management and a strong referral ecosystem.

Hospitals

The Companys hospitals provide comprehensive inpatient care, cardiac rehabilitation, Panchakarma therapies, preventive healthcare programmes and multidisciplinary treatment under one integrated platform.

During FY26, the Company continued to strengthen hospital infrastructure while improving occupancy, insurance partnerships and specialised treatment offerings. The hospital segment remains an important strategic growth driver and complements the Companys outpatient clinic ecosystem.

Products

The Companys product portfolio comprises proprietary Ayurvedic medicines, nutraceuticals, therapeutic formulations and wellness products developed to support its clinical protocols.

The integration of manufacturing operations through subsidiary companies is expected to further strengthen product quality, operational efficiencies and supply chain capabilities while supporting future product innovation.

KEY OPERATIONAL HIGHLIGHTS

The Company achieved several strategic milestones during FY2025-26 that reinforce its long-term growth strategy.

Expansion of Healthcare Network

The Company continued to strengthen its nationwide presence through a network of more than 320 clinics, supported by 4 hospitals, 46+ OPDs and Mini Clinics, and over 134 operational hospital beds. This expanding healthcare infrastructure enables the Company to deliver integrated care across multiple regions while improving patient accessibility.

Hospital Capacity Enhancement

The Companys hospitals continue to play an increasingly important role in delivering specialised inpatient care and rehabilitation services. The Company remains focused on increasing bed capacity over the coming years while strengthening infrastructure and enhancing clinical capabilities across its hospital network.

Clinical Research

The Company continues to distinguish itself through its commitment to scientific validation of Ayurvedic therapies. During the year, it further strengthened its research ecosystem, which now includes 83 scientific manuscripts and over 500 published research papers, reinforcing the credibility of its evidence- based treatment protocols.

Insurance & Corporate Partnerships

The Company continued expanding collaborations with insurance companies, Third Party Administrators (TPAs) and corporate organisations, improving patient accessibility and supporting wider adoption of integrated Ayurvedic healthcare solutions. These partnerships are expected to remain an important growth driver in the coming years.

Brand Building

The appointment of Mr. Sonu Sood as Brand Ambassador has further enhanced the Companys brand visibility and strengthened public awareness regarding preventive healthcare and evidence-based Ayurveda. The initiative supports the Companys objective of expanding its reach across urban as well as semi-urban markets.

DIGITAL TRANSFORMATION

Digital innovation continues to remain an integral part of the Companys long-term strategy.

The proprietary MIB Pulse application facilitates continuous patient engagement through digital consultations, treatment monitoring, medicine reminders and personalised healthcare support.

The Companys Power MAP platform enables advanced clinical assessment and assists medical professionals in monitoring patient progress through data- driven decision support.

These technology initiatives are enhancing patient experience, improving clinical consistency and strengthening long-term treatment outcomes across the Madhavbaug network.

STRATEGIC DEVELOPMENTS DURING FY2025-26

The financial year witnessed several strategic initiatives aimed at strengthening the Companys integrated healthcare ecosystem and positioning it for longterm sustainable growth.

Manufacturing Integration

The Company continued to strengthen its manufacturing capabilities through its subsidiaries, Dynamic Remedies Private Limited and UV Ayurgen Pharma Private Limited. These entities support backward integration by enhancing manufacturing capacity, ensuring consistent product quality, improving supply chain efficiencies and facilitating new product development. This integrated manufacturing model is expected to improve operational efficiency while supporting future expansion of the Companys product portfolio.

Expansion into New Speciality Healthcare

During the year, the Company expanded its healthcare offerings with the launch of Urja Neuro Care, a specialised healthcare vertical focused on neurological disorders. This initiative reflects the Companys commitment to extending its evidence-based Ayurvedic treatment philosophy into specialised therapeutic segments while addressing emerging healthcare needs.

Strategic Business Expansion

As part of its long-term growth strategy, the Company has initiated the proposed acquisition of Parasnath Healthcare (OPC) Private Limited, subject to completion of applicable approvals and transaction conditions. The proposed acquisition is expected to strengthen the Companys presence in specialised pain management and musculoskeletal healthcare and create operational synergies within its integrated healthcare platform.

International Expansion

The Company has also initiated its international growth strategy through a strategic joint venture in Malaysia, representing an important milestone in expanding the Madhavbaug healthcare model beyond India. The Company intends to leverage this platform to introduce its integrated Ayurvedic healthcare solutions to international markets while exploring additional opportunities for global expansion.

OPPORTUNITIES

The Company believes that several structural trends are expected to support sustainable long-term growth:

• Rising prevalence of lifestyle disorders requiring long-term disease management.

• Increasing acceptance of evidence-based Ayurveda and integrative healthcare.

• Growing health insurance penetration and wider insurance empanelment.

• Expansion of preventive healthcare and wellness programmes.

• Increasing corporate healthcare partnerships.

• Growing adoption of digital healthcare and telemedicine.

• Expansion opportunities across Tier II and Tier III cities.

• Increasing demand for specialised hospital-based Ayurvedic care.

• Product portfolio expansion supported by in-house manufacturing.

• International expansion opportunities for Indian Ayurveda.

• Rising consumer preference for preventive, non-invasive and holistic healthcare solutions.

The Company intends to leverage these opportunities through continued investments in infrastructure, technology, research, manufacturing capabilities and brand development.

RISKS AND CONCERNS

Like every healthcare organisation, the Company operates in a dynamic environment and is exposed to various business risks. Management continuously evaluates these risks and adopts appropriate mitigation measures.

The key risks include:

• Changes in healthcare regulations and government policies.

• Availability and retention of qualified Ayurvedic medical professionals.

• Intensifying competition from organised healthcare providers.

• Changes in consumer healthcare preferences.

• Inflationary pressures affecting operating costs.

• Technology and cybersecurity risks associated with digital healthcare.

• Supply chain disruptions affecting availability of raw materials.

• Clinical and operational risks inherent in healthcare delivery.

• Macroeconomic uncertainties impacting consumer spending.

The Company continues to strengthen its governance framework, internal controls and risk management practices to minimise these risks while maintaining operational resilience.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate system of internal financial controls commensurate with the size, scale and complexity of its operations.

The internal control framework is designed to safeguard assets, ensure the accuracy and reliability of financial reporting, maintain compliance with applicable laws and regulations and improve operational effectiveness.

The Company has implemented comprehensive policies covering financial reporting, delegation of authority, procurement, inventory management, information technology, clinical governance, statutory compliance and enterprise risk management.

Independent internal auditors periodically review the adequacy and effectiveness of internal controls. Significant observations, together with management responses and corrective actions, are reviewed by the Audit Committee of the Board of Directors on a regular basis.

The Board believes that the Companys internal control systems are robust and provide reasonable assurance regarding operational efficiency, financial reporting and statutory compliance.

HUMAN RESOURCES

The Companys employees remain its most valuable asset and continue to play a critical role in achieving its strategic objectives.

The Company is committed to fostering an inclusive, performance-oriented and learning-driven work culture. Continuous investment is made in professional development, clinical training, leadership development and employee engagement initiatives to enhance organisational capability.

Special emphasis continues to be placed on strengthening medical talent through structured learning programmes, standardised clinical protocols and continuous knowledge sharing across the Madhavbaug network.

The Company also promotes employee well-being through various engagement initiatives, recognition programmes, performance-linked incentives and career development opportunities, thereby creating a motivated and committed workforce capable of delivering high-quality patient care.

Industrial relations throughout the year remained cordial.

OUTLOOK

Indias healthcare sector is expected to remain one of the fastest-growing sectors of the economy, supported by favourable demographics, increasing healthcare awareness, expanding insurance coverage, rising disposable incomes and continued Government focus on preventive healthcare.

Against this backdrop, Vaidya Sane Ayurved Laboratories Limited is well positioned to capitalise on emerging opportunities through its differentiated healthcare model that integrates Ayurveda, modern diagnostics, clinical research, digital technology and hospital-based care.

The Companys strategic priorities over the medium term include:

• Expansion of the clinic and hospital network.

• Enhancement of hospital bed capacity.

• Strengthening manufacturing capabilities.

• Scaling digital healthcare platforms.

• Expansion of insurance and corporate partnerships.

• Strengthening research and scientific validation.

• Development of specialised healthcare verticals.

• International expansion through strategic collaborations.

• Continued focus on operational excellence and shareholder value creation.

With a strong brand, integrated healthcare ecosystem, experienced leadership team and growing acceptance of evidence-based Ayurveda, the Company remains confident of delivering sustainable growth while creating long-term value for patients, shareholders and all other stakeholders.

CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various risks and uncertainties including changes in economic conditions, government policies, regulatory developments, competitive dynamics, technological changes and other factors beyond the Companys control.

The Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable law.

Conclusion

FY2025-26 has been a year of strengthening the Companys foundation for sustainable growth. Through continued investments in clinical excellence, research, manufacturing, technology, hospital infrastructure and strategic expansion, the Company has reinforced its position as one of Indias leading integrated Ayurvedic healthcare organisations.

The Board and the Management remain committed to creating enduring value through ethical governance, patient-centric innovation, operational excellence and responsible business practices. As the Company advances towards its long-term vision, it will continue to focus on delivering accessible, evidence-based and high-quality healthcare while contributing meaningfully to Indias evolving healthcare landscape.