Vijaya Diagnostic Centre Ltd Management Discussions

Management Discussion
and Analysis

Global Economy

In 2024, the global economy demonstrated continued
resilience, recording a year-over-year (YoY) growth
of 3.3%. This marks a stable performance in the
face of ongoing monetary tightening, trade policy
uncertainty, and region-specific challenges. The
global output based on market exchange rates was
slightly lower, at 2.8%, reflecting the divergence
between fast-growing emerging markets and slower
expansion in advanced economies.

Advanced economies grew by 1.8%, with notable
regional variations. The United States expanded at
a robust 2.8%, benefiting from strong consumption
and a solid labour market. In contrast, the Euro Area
posted a modest 0.9% growth, weighed down by
weak manufacturing, especially in Germany (-0.2%).
These economies continue to navigate a path of
gradual recovery, although elevated uncertainty and
restrictive monetary policies weigh on investment.
Emerging markets and developing economies
(EMDEs) recorded a solid 4.3% growth in 2023-24 led
by India (6.5%) and China (5%), continuing to be the
primary engine of global expansion.

On the inflation front, the global prices rose by 5.7%.
This reflects continued disinflation trends in advanced
economies due to tighter monetary policy and
stabilising commodity prices, while inflation remains
elevated in some EMDEs.

Despite ongoing challenges including rising
protectionism, inflationary pressures, and
geopolitical tensions — global economic growth
is projected to average ~3.0% in 2025 and 2026.
While regional performance varies, steady recovery
in advanced economies and targeted structural
reforms in emerging markets and developing
economies (EMDEs) offer a measure of optimism for
medium-term growth.

Indian Economy

The growth of the Indian economy was slightly lower
in FY25 due to slower growth in private investments
and public capital expenditure driven by delayed
governmental targets.

The Economic Survey 2024-25 said that despite
global headwinds, India remains the fastest-growing
major economy, with FY26 growth seen between
6.3% and 6.8%, supported by rural demand, services,
and manufacturing.

One of the key drivers of Indias economic growth
has been the fastest growing services sector. The
services sector, which accounts for over 50% of
Indias GDP, has grown at 7.2% fueled by increased
activity in IT, financial services, real-estate and
professional services.

Retail Inflation followed a steady downward path
in FY25 driven by sharp decline in food prices and
crude prices. This consistent moderation highlights
the combined impact of the Reserve Bank of Indias
calibrated monetary policy and the Government
of Indias focused interventions to ease supply-
side constraints and stabilise prices of essential
commodities. In order to further fuel growth, The
RBI announced a significant policy shift from
"accommodative" to "neutral" in June 2025 by
reducing repo rate by 50 basis points to 5.5% and
100 basis points cut in CRR.

According to the World Bank, Indias GDP growth for
FY26 is projected at ~6.3%, driven by robust private
consumption supported by tax cuts and improved
execution of public investment plans, despite
subdued global growth and a weaker export outlook.

The IMFs World Economic Outlook report projects
Indias GDP growth to remain relatively more stable at
6.2% in 2025, maintaining a solid lead over global and
regional peers, supported by private consumption,
particularly in rural areas despite higher levels of trade
tensions and global uncertainty. It also stated that the
country is well-positioned to navigate the challenges
ahead due to strong fundamentals and strategic
government initiatives.

Industry Overview

Indian Healthcare Sector

Indias healthcare sector stands at a pivotal point
of transformation, driven by demographic shifts,
progressive policy reforms, rapid digital innovation,
and increased private investment. The outlook
remains robust across hospitals, pharmaceuticals,
healthtech, and the wellness ecosystem. According
to the India Brand Equity Foundation (IBEF) report of
Feb 2025, the total industry size which was estimated
at US$ 372 billion in 2023, is expected to reach USD$
638 billion in 2025 reflecting the sectors substantial
scale, growth and potential. The healthcare market
in India has experienced robust growth, with a
Compound Annual Growth Rate (CAGR) of 21.6%
between 2016 and 2025.

Driven by demographic shifts and infrastructure
gains, Indias healthcare sector is on a strong upward
path. With life expectancy projected to reach 84 years
by 2045 and a median age rising to 38.3 by 2050,
demand for senior-focused healthcare is set to surge.
Simultaneously, capacity has expanded - medical
colleges have grown 1.8x over past 8 years reaching
758 in FY24, and hospital bed capacity is expected to
increase by 12x by 2045.

Amid growing health concerns — from diabetes
and obesity to air and water pollution — India is
witnessing a strong shift toward wellness and
preventive healthcare. Consumers are increasingly
prioritizing fitness and OTC products, with wellness
spending projected to increase 2-3x compared
to peers in the U.S. and Canada, thanks to rising
urbanization, incomes, and health awareness.

Medical tourism currently accounts for 10-12% of
Indias overall healthcare revenue and is poised for
accelerated growth. Valued at $7.69 billion in 2024,
the sector is projected to nearly double, reaching
$14.31 billion by 2029. The Indian government
allocated ^99,859 crore for healthcare in FY 2025-26,
marking an 11% increase from the previous year. The
budget laid strong foundation for robust healthcare
ecosystem with a strong push toward expanding
access, affordability, and technological integration in
public healthcare.

Hospital Market and Infrastructure
Development

Hospitals, which comprise approximately 80% of the
total healthcare market, are poised for significant
expansion. The segment is projected to grow at
a CAGR of 8.0% from 2024 to 2032, reaching an
estimated US$ 194 billion by 2032, according to
Way2Wealth Brokers. This growth is driven by
factors including increased healthcare spending,
urbanisation, rising lifestyle diseases, heightened
post-pandemic awareness, and a substantial demand
supply gap in bed capacity.

India currently has a bed-to-population ratio of 1.3
per 1,000, well below the global benchmark of 3 per

1,000, indicating a shortfall of 1.7 beds per 1,000
population. To meet this gap, an additional 2.4 Million
beds are required nationwide.

The private sector is playing a critical role in bridging
this deficit. By FY29, it is expected to add 34,000
new hospital beds through investments totalling
approximately C 40,000 crore. Notably, corporate
hospital chains are expanding beyond metropolitan

cities into tier-2 and tier-3 markets, leveraging
improved healthcare awareness, increasing
affordability, and profitable models of care in these
emerging regions.

Digital Transformation and
Technological Advancements

The Indian healthcare sector is undergoing a
transformative digital shift, driven by advancements
in artificial intelligence (AI), telemedicine, and mobile
health technologies.

According to a report by the Economic Times CIO
(February 2024), the AI in Indian healthcare market is
projected to reach US$ 1.6 billion by 2025, growing
at a CAGR of 40.6%. AI technologies are increasingly
being adopted for early detection of critical diseases
such as breast cancer, glaucoma, diabetic retinopathy,
and in interpreting medical imaging like CT scans and
X-rays, as well as powering clinical decision-support
systems. Platforms such as eSanjeevani have seen
exponential growth, providing remote consultations
and bridging healthcare access gaps, particularly
in rural and underserved regions. Meanwhile, the
rise of mobile health applications and wearable
devises empowering patients to proactively manage
their health, track vital signs, and receive real-time,
personalized insights.

Healthcare Workforce and
Employment Opportunities

As the healthcare continues to embrace digital
solutions, the demand for technology-driven
healthcare roles has increased significantly. The
demand for professionals in emerging fields such
as AI/ML, data analysts, UX / UI designers has gone
up significantly. According to TeamLease Digital, the
broad adoption of AI in Indian healthcare is predicted
to generate millions of new jobs while replacing
nearly 23% of current roles by 2028. The healthcare
workforce is expected to grow from 7.5 Million to 9
Million by 2027, with 1-2% being technology experts.
Advancements in telemedicine, virtual assistants,
and data analytics are anticipated to create 2.7-3.5
Million new technology jobs, increasing demand for
professionals like data scientists and AI specialists.
Also, companies are putting efforts to upskilling
programs and leveraging technology to streamline
recruitment and expand workforce capacity.

Government Initiatives
and Policy Support

The Government of India has continued to drive
significant reforms and investments in the healthcare
sector in FY25, reinforcing its commitment to
universal healthcare access and infrastructure
development. A key highlight is the simplification of
medical visa norms for international patients, aimed at
improving the ease and speed of access to life-saving
treatments. This initiative is expected to bolster Indias

position as a leading global healthcare destination,
with the medical tourism sector projected to grow at
a robust 14-15% annually. Importantly, the benefits of
this growth are now extending beyond metropolitan
hubs, as tier-2 and tier-3 cities witness the emergence
of new hospitals and specialist services. Governments
proactive support for private sector participation,
underpinned by regulatory reforms and a ^1.5
lakh crore infrastructure push, is set to unlock new
avenues for innovation and investment in healthcare.
The Ayushman Bharat Digital Mission (ABDM) has
made significant strides, with 78 crore Ayushman
Bharat Health Accounts (ABHAs) created and over
55 crore health records linked. This initiative is laying
the foundation for a comprehensive digital health
ecosystem, enabling seamless and secure access
to medical histories across providers and platforms.
The Pradhan Mantri Jan Arogya Yojana (AB PM-JAY)
continues to be a cornerstone of inclusive healthcare
access, with over 55 crore beneficiaries covered and
40 crore Ayushman Cards issued as of FY25. These
developments highlight the governments multi-
pronged approach to expanding insurance coverage
and ensuring equitable healthcare access for
economically weaker sections.

Opportunities and Future Outlook

Indias healthcare sector is poised for significant
growth, driven by government initiatives for universal
health coverage, rising incomes, and increasing health
awareness. Technological advancements, particularly
in AI, digital health, and health informatics, are
enhancing efficiency and expanding access to quality
care. The industry is seeing greater consolidation and
deeper market penetration strategies. With an aging
population and growing emphasis on preventive
care, healthcare spending in India is expected
to rise steadily.

Overview of the Indian Diagnostics
Market

The Indian diagnostics market has experienced
significant growth over the past few years, driven
by increasing healthcare awareness, prevalence
of chronic diseases, rising income levels, and
advancements in diagnostic technologies.

The sector is highly competitive and fragmented,
with organised players holding only around 15% of
the market share. Majority of the market is dominated
by unorganised players, which presents both
challenges and opportunities for growth and market
consolidation (Philip Capital Report).

Market Size and Growth Projections

The Indian diagnostics market is projected to
grow at a Compound Annual Growth Rate (CAGR)
of 14%, reaching USD 25 billion by FY28 (Praxis
Report). This growth is supported by several factors,
including the increasing healthcare spending, ageing
population, rising awareness of preventive testing,
better healthcare infra and increasing penetration of
health insurance.

Key Trends Shaping the Industry

• Digital Transformation and Technological
Advancements: The diagnostics industry
in India is undergoing a digital revolution,
with significant investments in artificial
intelligence (AI) and machine learning (ML)
technologies. The AI in Healthcare Market
is projected to grow from USD 19.3 billion
in 2023 to USD 613.8 billion by 2034.
Telemedicine and Point-Of-Care testing
services are also gaining traction, driven

by the demand for convenience and rapid
results. Advancements in wearable devices
have also led to continuous, real-time health
tracking with the help of biosensors

• Non-Invasive Diagnostics: Several
Non-Invasive diagnostic devises are being
developed to provide comfort to the
patients. For example, non-invasive AI
based diagnostic tool has been developed
to conduct blood test without the need
for needles, vials

• Rise of Genomics and Genetic Testing:

Diagnostic companies are increasing
their capabilities to meet the demand for
advanced genome testing supported by
technological advancements, government
initiatives and increasing awareness for
early detection

• Evolving Patient Behaviour: Diagnostic
companies are increasingly focusing on
providing improved customer experience
with the help of digital tools as the
preference is slowly shifting to branded
service providers. Companies are investing

in robust IT systems to streamline operations
and improve efficiency

• Personalised Test Packages: Amid
escalating healthcare costs and the surge
in lifestyle-related conditions, the focus

is rapidly shifting from treatment to
prevention. Companies are increasingly
including family members in wellness
programs, fostering a more holistic approach
to employee well-being. Diagnostic
companies are increasingly offering
customized packages for targeted testing
and timely interventions. Wellness and
bundled packages have gained significant
traction in recent years, driving test volume
growth by increasing the number of
tests per patient

Opportunities in the Diagnostics Market

Rising Demand for Diagnostic Services
in Tier 2, 3 and smaller towns

The demand for diagnostic services in Tier 2,

3 and smaller towns is rising rapidly thanks to
government programs like Ayushman Bharat
and greater health consciousness pushing
the organised players to focus on penetrating
deeper into these markets either through
organically or through acquisition of regional
diagnostic providers

AI-Powered Medical Imaging

AI is revolutionizing healthcare by providing
doctors with more accurate diagnostic
insights, boosting productivity, and
improving the overall quality of patient care.
Many diagnostic companies are leveraging
AI to streamline workflows and support more
informed clinical decisions

Remote Diagnostics

Teleradiology, by deploying innovative
approach, leverages advanced
communication technologies and digital
tools in providing access to high-quality
care in remote locations. By integrating
remote diagnostics into healthcare systems,
diagnostic companies can enhance patient
access to specialised care, reduce wait times,
and improve overall health outcomes

Government Initiatives and Policy
Support

With an allocation of approximately Y1
lakh crore towards healthcare under Union
Budget 2025 for FY26, the government is
focused on expanding access, infrastructure,
and research capabilities. Efforts are
underway to strengthen the Ayushman
Bharat initiative, ensuring that specialized
care reaches rural and remote populations.
Additionally, measures such as easing visa
norms are being introduced to promote
medical tourism. The expansion of
telemedicine infrastructure — particularly
through improved broadband connectivity
in Primary Health Centres (PHCs) — will
significantly enhance Al-driven diagnostics

Future Outlook

Driven by government support, technological
innovation, growing awareness of preventive care,
broader health insurance coverage, and rising private
sector involvement, Indias diagnostic sector is well-
equipped to meet the diverse healthcare needs of its
vast population. The landscape is undergoing rapid
transformation, powered by digital advancements.
Al-driven and remote diagnostic technologies are
unlocking new possibilities, significantly enhancing
healthcare outcomes.

Company Overview

Vijaya Diagnostic Centre is Indias largest B2C-
focused integrated diagnostic chain, providing a
comprehensive range of radiology and pathology
tests with a focus on delivering high-quality services
at affordable prices. It in-houses best-in-class
equipment, along with 300+ specialized and super-
specialized radiologists and pathologists to ensure
high-quality reporting with quick turnaround times
across tests, enabling clinicians in providing efficient
and accurate treatment. Vijaya Diagnostics services
are presently available in 160+ centres across Andhra
Pradesh, Telangana, Karnataka, Maharashtra, West
Bengal, and the NCR.

Our mission is to make diagnostic services
accessible and affordable while maintaining the
highest standards of quality. We continually invest
in state-of-the-art technology and infrastructure
to ensure that our patients receive the best
possible care. Our commitment to excellence is
reflected in our accreditations and certifications,
including NABL and NABH.

Financial Performance in FY25

FY25 has been a milestone year for Vijaya Diagnostic
Centre. We reported a robutst revenue growth of
24.4%, amounting to ^6,814 Million, driven by both
organic and inorganic factors, including the successful
& seamless integration of PH Diagnostics. Our EBITDA
for the year stood at ^2,732 Million, reflecting a
year-on-year growth of 23.7%. The EBITDA margin
was healthy at 40.1%, demonstrating our ability to
maintain profitability while expanding our operations.
Our Profit After Tax (PAT) grew by 20.2%, reaching
^1,438 Million. On the operational front, our total tests
performed increased by 24.4% year-on-year, reaching
11.9 Million tests in FY24. Our total footfall also saw a
substantial increase of 18.0%, with 4.2 Million patient
visits during the year. These metrics highlight our
growing impact and the trust we continue to build
across communities.

We have consistently maintained industry-leading
margins, supported by our integrated business
model and a strong focus on the B2C segment. Our
radiology business, which now constitutes 37% of our
total revenue, has been a significant contributor to our
growth. The revenue per test stood at ^461, and the
revenue per footfall was ^1,627, reflecting our ability
to deliver high-value services to our customers.

Key Financial Ratios

Particulars	FY 2024-25	FY 2023-24	Reason
Debtors Turnover (In times)	3.02	2.58
Inventory Turnover (In times)	16.76	18.10
Interest Coverage Ratio (In times)	Nil	Nil
Current Ratio (In times)	1.89	2.90	During the current period, decrease in current ratio can be attributed to increase in capital creditors for deferred payments to be made for medical equipment installed in new centres
Debt Equity Ratio (In times)	Nil	Nil
Operating Profit Margin (in %)	40	40
Net Profit Margin (in %)	21	22
Return on Net Worth (in %)	18.51	18.08

Strategic Position to Capitalise
on Opportunities

With a robust network of diagnostic centres
and reference labs, investment in best-in-class
equipment & doctor network and a strong
emphasis on quality and innovation, Vijaya
Diagnostic Centre is strategically poised to capitalise
on the vast opportunities in Indias evolving
diagnostics landscape.

Geographical Expansion and Inorganic Growth: We

have been focusing on expanding our geographical
footprint through both organic and inorganic growth
strategies. Having already entered Western India
market in the previous fiscal with the acquisition of
PH Diagnostic Centre Private Limited, Punes largest
B2C-focused integrated diagnostic chain, we have
operationalised our 1^st state-of-the-art-centre in
Ambegaon, Pune under the brand name Vijaya-PH.

We have also received stock exchange approval and
shareholder & creditors approval for the merger of
Medinova Diagnostic Services Limited. This merger
aims to consolidate our market position and create
synergies that will benefit both entities.

Digital Transformation and Technological
Advancements: The diagnostics industry in India is
undergoing a digital revolution, and Vijaya Diagnostic
Centre is at the forefront of this transformation. We
have invested significantly in artificial intelligence (AI)
and machine learning (ML) technologies to enhance
diagnostic accuracy and operational efficiency. Our
advanced Laboratory Information Management
System (LIMS) and Radiology Information Systems
(RIS) ensure that we maintain high standards of
accuracy and efficiency in our diagnostic services.

Outlook

Looking ahead, the outlook for Vijaya Diagnostic
Centre remains positive. As we plan to diversify our
operations outside of core geography, we plan to add
11 new hub centres in FY26, largely in Pune, West
Bengal and Bengaluru.

We plan to enter Bengaluru market in FY26
organically, with the launch of 2 hub centres. Given
the strong potential of the market, we are actively
looking at a few more strategic locations for our hub
expansion to strengthen our presence in the region.

With the recent launch of 2 large, state-of-the-art
hub centres and 2 spokes in Pune, combined with
our investment in cutting-edge technology, we are
confident this will significantly enhance visibility of
the Vijaya-PH brand in the Pune market. We are now
well-positioned to establish a distinct identity and
gain strong traction in the region going forward.

Our expansion strategy is backed by a strong financial
position, with plans to fund these initiatives through
internal accruals and existing cash reserves.

We are confident that our strategic initiatives,
combined with our commitment to operational
excellence, will enable us to deliver lasting value
to our stakeholders. Our focus on quality, accuracy
and patient-centric care will continue to drive
our growth and success. With focused expansion
strategy, investment in digital initiatives and human
resources, we are confident in our ability to replicate
the success of building a dense network beyond our
core geographies, positioning us to capitalize on the
growing demand in the diagnostic sector.

Risks & Mitigation

At Vijaya Diagnostic Centre Limited, we recognise
that effective risk management is critical to sustaining
our growth and achieving our strategic objectives.

Our comprehensive risk management framework is
designed to identify, assess, and mitigate potential
risks that could impact our operations, financial
performance, and reputation. This section outlines
our approach to risk management and the specific
strategies we employ to address various risks.

Company Philosophy on
Risk Management

Our risk management philosophy is rooted in
proactive identification, assessment, and mitigation
of risks to ensure business continuity and sustainable
growth. We are committed to maintaining a robust
risk management framework that integrates risk
management practices into our strategic planning
and operational processes. Our Board of Directors
and senior management team play a pivotal role in
overseeing risk management activities, ensuring that
risks are effectively managed and mitigated.

Risk

Human Resources

Personnel at Vijaya Diagnostic Centre are immersed
in a dynamic environment equipped with advanced
and high-end laboratory and diagnostic facilities,
enabling them to work with cutting-edge technology.
To attract and retain talent across all the levels, the
Company offers Employee Stock Options (ESOPs)
as rewards, fostering a high-performance culture
and aligning employee interests with long-term
organisational goals.

The Company also prioritises employee well-being
and satisfaction through a dedicated grievance cell,
which addresses employee concerns and ensures fair
and transparent communication. Regular training and
development programmes, led by top-level experts
and consultants, are conducted to enhance the skills
and knowledge of our workforce. As AI continues to
transform the technological landscape, the Company

is placing greater emphasis on periodic training and
development sessions to empower technicians with
the skills needed to manage and leverage AI solutions.
These initiatives ensure that our employees remain at
the forefront of the latest advancements in diagnostic
technology and practices.

As of March 31, 2025, the total number of staff
at Vijaya Diagnostic Centre stands at over 2,853,
reflecting our commitment to building a skilled and
motivated workforce capable of delivering exceptional
diagnostic services.

Internal Control Systems and Their
Adequacy

Vijaya Diagnostic Centre has implemented a robust
and comprehensive internal control framework that
aligns with the Companys strategic objectives and
operational requirements. This system is designed

to safeguard assets, ensure compliance with
regulatory standards, and maintain the integrity of
financial reporting.

The Companys internal control mechanisms
encompass a wide range of policies, procedures, and
monitoring processes that are regularly reviewed
and updated to address evolving business needs and
regulatory requirements. Key features of our internal
control system include:

• Risk Assessment and Management:

A structured approach to identifying, evaluating,
and mitigating risks across all business functions.

• Financial Controls: Rigorous checks and balances
to ensure accuracy in financial reporting and
adherence to accounting standards.

• Operational Efficiency: Continuous monitoring
and improvement of operational processes to
enhance productivity and reduce wastage.

• Compliance Management: Comprehensive
systems to track and ensure compliance with all
applicable laws and regulations.

• Information Technology Controls: Robust IT
systems with appropriate access controls and data
security measures.

• Internal Audit Function: An independent internal
audit team that conducts regular audits across

all departments and reports directly to the
Audit Committee.

The Audit Committee, comprising independent
directors, plays a crucial role in overseeing the
effectiveness of these internal control systems.

They regularly review audit reports, monitor the
implementation of audit recommendations,
and provide guidance on strengthening control
mechanisms. In FY24, we further enhanced our
internal control framework by implementing
advanced data analytics tools to improve real-time
monitoring capabilities and by conducting specialised
training programmes for employees to reinforce
the importance of internal controls in their day-
to-day activities.

The management believes that the current internal
control systems are commensurate with the nature,
size, and complexity of our operations. However,
we recognise that internal control is an ongoing
process, and we remain committed to continuously
improving and adapting our systems to meet future
challenges and opportunities.

Cautionary Statement

This Management Discussion and Analysis
contains statements that describe the Companys
objectives, projections, estimates, expectations, or
predictions. These forward-looking statements are
within the meaning of applicable securities laws
and regulations. The Company has undertaken
various assessments and analyses to make these
statements. However, actual results may differ
materially from those expressed or implied due to
various factors beyond the Companys control.

These factors include, but are not limited to,
changes in government regulations, tax regimes,
economic developments within India and other
countries, and other incidental factors. Market
data and product information contained in this
report are based on information gathered from
various published and unpublished reports and
their accuracy, reliability, and completeness
cannot be assured.

The Company undertakes no obligation to publicly
update or revise any forward-looking statements,
whether as a result of new information, future
events, or otherwise. Readers are cautioned not
to place undue reliance on these forward-looking
statements, which speak only as of their dates. They
are advised to conduct their own investigation and
analysis of the information contained or referred to
in this section before taking any action with regard
to their own specific objectives.

Furthermore, the discussion of our financial
condition and results of operations should be read
together with our audited, consolidated financial
statements and the notes to these statements
included in the annual report.