Kaya Ltd Management Discussions

A. ECONOMIC AND INDUSTRY OVERVIEW

1. Global Economy

Amidst various challenges and evolving macro-economic scenarios, the global economy has showcased remarkable resilience throughout the calendar year (CY), characterised by consistent growth and a notable decline in inflation. Despite hurdles such as post-pandemic supply chain disruptions and the Russia-Ukraine conflict-induced energy and food crisis, the global economy has navigated through these adversities. Additionally, a surge in inflation, followed by synchronised monetary policy tightening, has shaped the economic landscape.

Global growth, which reached 3.2% in 2023, is forecasted to remain steady through 2024 and 2025. However, this falls short of the 3.8% historical average, due to restrained monetary policies, diminished fiscal aid, and sluggish productivity growth. On the other hand, global headline inflation is expected to moderate, decreasing from an annual average of 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025. This decline is attributed to a more front-loaded decrease in advanced economies, with inflation expected to return to near pre-pandemic levels sooner than in emerging market and developing economies. Advanced economies are poised for a slight uptick, primarily driven by the Euro Area?s recovery, with growth rates projected to climb from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. In contrast, emerging markets and developing economies are expected to sustain stable growth at 4.2% during 2024 and 2025, although regional disparities exist, with growth moderation in Asia counterbalanced by growth in the Middle East, Central Asia, and sub-Saharan Africa.

GLOBAL GROWTH FORECAST (%)

	Estimate	Projections
Particulars
	CY2022	CY2023	CY2024
World Output	3.2	3.2	3.2
Advanced Economies	1.6	1.7	1.8
US	2.5	2.7	1.9
UK	0.1	0.5	1.5
Emerging Market and Developing	4.3	4.2	4.2
Economies
Middle East and Central Asia	2.0	2.8	4.2
Source: World Economic Outlook – April 2024

1.1 Outlook

Looking forward, the global economic outlook appears cautiously optimistic. With moderate inflation and stable growth, the risk of a severe downturn is reduced. Despite the resilience exhibited in the face of tightening financial conditions and geopolitical tensions, anticipated policy adjustments to curb inflation are likely to dampen economic activity. Given the lower risks, there is a need for prudent policy management to avoid worsening economic conditions. It is imperative for nations to accelerate the green transition and enhance resilience to climate shocks. Achieving this will require strengthening multilateral frameworks and adhering to rules-based platforms for international cooperation. Ensuring sustainable growth and stability will depend on coordinated efforts to address environmental challenges and promote global economic resilience.

2. Indian Economy

In India, the prevailing economic sentiment was marked by a cautious yet optimistic outlook for the year under review. This positive trajectory is bolstered by robust policy interventions and a steady resurgence of the public and private sectors. The Indian economy maintains its upward trajectory despite global economic uncertainties, projected to grow at 7.6% in FY24, marking the third consecutive year of over 7% growth, outpacing the global average. Key drivers of Indias GDP growth include increased public sector investment in infrastructure, a resilient financial sector, rising consumer demand, vibrant manufacturing and industrial activity, strong agricultural performance, favourable government policies, global trade opportunities, and technological innovations fostering productivity. Initiatives such as the Skill India Mission, Start-Up India, and Stand-Up India have further spurred human capital development, including greater female participation, contributing to the nations economic resilience and growth.

The governments economic policy agenda has been cantered on revitalising Indias growth potential. This involves reinvigorating the financial sector, streamlining business conditions to spur economic activity, and significantly enhancing both physical and digital infrastructure to bolster connectivity and thereby boost the competitiveness of the manufacturing sector. Guided by this vision, the government has implemented a range of economic reforms aimed at fostering a business-friendly environment, enhancing ease of living, and fortifying governance systems and processes.

India is currently the fifth-largest economy globally and is expected to maintain the highest growth rate among the top five economies in the foreseeable future. Several developments have bolstered foreign investor confidence in the country. Progressive government reforms and growing investor faith in Indias growth story have propelled the Nifty 50 index to a new high, with a 16% growth in 2023. As of November 2023, Indias stock market ranked seventh globally, with a market capitalisation of USD 3.989 trillion.

The Interim Union Budget for 2024-25 announced that the capital expenditure outlay for the next year is being increased by 11.1% to Rs 11,11,111 crore, which would be 3.4% of the GDP. This development instils high optimism in core sectors.

2.1 Outlook

India is ambitiously aiming to reach a USD 7 tn economy by 2030, and it is progressing well towards achieving this milestone within the next three years, positioning itself as the worlds third-largest economy. Furthermore, the Government has also set an ambitious goal of transforming India into a developed country by 2047. Fuelled by stable and robust domestic demand, expanding private consumption and investments, and ongoing structural reforms, India is poised to sustain its upward growth trajectory in the coming years.

3. Industry Overview 3.1 Market size of aesthetic dermatology industry in India

The health and wellness category is experiencing steady growth at a CAGR of 5.6% between FY22 and FY26. Notably, the aesthetic dermatology sub-category is expanding at a significantly faster rate of 17% between FY22 and FY26, highlighting the increasing demand for dermatological treatments and cosmetic procedures. The consumer mindset is increasingly shifting towards wellness and aesthetics, with growth being primarily driven by both metros and non-metros due to rapid urbanisation. This trend underscores the importance of advanced dermatological solutions and cosmetic enhancements as essential components of modern health and wellness routines.

Aesthetic dermatology industry trends in India

Young Indian consumers are at the forefront of spending on wellness and beauty, with 33% of Millennials spending more than Rs 4,000 per month on wellness. The wellness and beauty market is expected to thrive, driven by Indias younger working population, which has a median age of 28. This demographics increasing focus on personal health and aesthetics is fuelling significant growth in the sector, making it a promising area for continued investment and innovation.

The future of beauty solutions is promising, with consumers increasingly seeking expert, tech-driven, and quick treatments. New technologies are emerging that offer low-pain procedures and quicker recovery times, meeting the demand for efficient beauty solutions. Changing customer needs, driven by the rise of social media and the easy availability of information on the internet, have led to greater consumer acceptance and affinity post-COVID-19. Additionally, the utilisation of AI technology, such as content-based imaging, is enhancing diagnosis and treatment outcomes, further revolutionising the beauty and wellness industry.

Growth drivers for aesthetic dermatology industry in India

Increased prevalence of lifestyle diseases: The rising occurrence of lifestyle diseases, such as obesity, prolonged stress, and allergies, has significantly contributed to various health issues, including hair loss, acne, and premature aging. In India, the overall prevalence of obesity is 40.3%, with urban areas experiencing a higher rate compared to rural regions (44.1% versus 36.0%). Allergies also pose a major health challenge, affecting over 20% of the total population in the country.

Advancements in treatment technologies: Non-invasive aesthetic treatments have become increasingly popular in recent years, emerging as a preferred method for addressing anti-aging and skin-related issues. The shift towards non-invasive procedures is driven by several benefits, such as reduced patient pain, quicker recovery times, and a lower risk of complications. This trend has drawn more customers to the aesthetic dermatology sector, seeking effective and safer solutions.

Rapid urbanisation: By 2025, approximately 37.4% of Indias population is expected to live in urban areas, with this figure projected to rise to 46.4% by 2040. The countrys rapid economic development is fostering the creation of more urban centres, with a significant portion of the working population residing in these areas. Urban families, particularly in metro and tier 1 cities, tend to have higher household incomes and greater spending power, driving the demand for aesthetic dermatology services.

Rise of organised aesthetic dermatology service providers: The Indian aesthetic dermatology market has traditionally been dominated by unorganised service providers, holding about 90% of the market share. However, the increasing presence of organised service providers is expected to enhance quality, operational efficiency, and the adoption of modern treatment techniques facilitated by skilled medical professionals.

Growing investment: The rapid expansion of the aesthetic dermatology segment is attracting investment from both domestic and global service providers aiming to tap into Indias large customer base. To strengthen their market position in both services and products, domestic aesthetic dermatology providers are focusing on expanding their clinic networks across various regions in India and exploring opportunities in international markets.

Changing customer needs: India has a substantial younger population highly aware of the beauty and wellness sector. This awareness has increased driven by easy access to information, the growing influence of social media, and a strong desire to look good. The aesthetic dermatology market in India is also seeing a growing share of male customers, as men are increasingly educating themselves about treatment options, costs, and expected outcomes.

Growth in cosmetic tourism: India is becoming a major global destination for aesthetic surgeries. The primary driver behind this trend is the significant cost difference of cosmetic treatments in India compared to other parts of the world. This affordability factor has attracted a growing number of individuals seeking aesthetic procedures, making India a favorable option for cosmetic tourism.

3.2 Role of Kaya India in the overall aesthetic dermatology services industry

Indias aesthetic dermatology market is experiencing rapid growth due to rising disposable incomes, increased self-awareness about appearance, advancements in technology, and supportive policies and regulations. To seize a substantial share of this burgeoning market, Kaya should implement the following strategies:

Expanding network across untapped regions: Currently, aesthetic dermatology services are concentrated in metro and tier 1 cities. However, tier 2 and tier 3 cities are emerging as lucrative markets with high demand due to economic development, growing populations, and rising household incomes. Kaya can bridge the demand-supply gap by expanding its network and opening clinics in these untapped regions.

Setting high-quality standards: The Indian aesthetic dermatology market is dominated by unorganised participants with non-standardised quality approaches. Kaya, as an organised player, can differentiate itself by maintaining standardised procedures and implementing stringent quality control measures. By establishing comprehensive standards covering various aspects of running an aesthetic dermatology clinic, Kaya can set a benchmark for both organised and unorganised service providers in the Indian market.

Digitising the aesthetic dermatology ecosystem: Kaya has effectively utilised digital capabilities to strengthen its market position. The Company has established a direct-to-customer platform, collaborated with leading e-marketplaces, enhanced its social media presence, and revamped its customer relationship management, finance, and operations. By further leveraging digital technologies, Kaya can enhance its market reach and operational efficiency.

Addressing the skilled workforce shortage: Kaya has developed comprehensive standard operating procedures and training programs over the years. The Company employs technical and soft skills trainers to cater to the learning and development needs of its employees. Dermatologists and Therapists undergo mandatory training on advanced aesthetic dermatology machines and procedures. By continuing to invest in training and skill development, Kaya can address the industrys shortage of skilled professionals.

Enhancing services and product offerings: To stay ahead of the competition, aesthetic dermatology service providers must invest in research and development to enhance their service and product portfolios. The Company is also upgrading its equipment with advanced machines from reputable manufacturers.

Proactive marketing and branding efforts: Aesthetic dermatology treatments still face some stigmas in Indian society. To expand their patient base, market participants need to spread awareness about health issues, treatments, and service offerings to dispel misconceptions. Kaya employs various mediums for intuitive communication to establish a deeper connection with customers. The Company is also building a network of influencers to popularise its services, products, and new brand identity.

Opening channels for better customer acquisition and retention: In todays competitive business environment, aesthetic dermatology service providers must go the extra mile to attract and retain customers. Kaya has launched the Kaya Smiles loyalty programme, offering various benefits to enhance customer engagement and retention. This programme has contributed significantly to Kayas business and has a large customer base.

3.3. Dermatological Products

The skincare products market is experiencing rapid growth driven by several key trends. These include the rising demand for health-promoting and self-care products, increased awareness of the benefits of skincare regimens, and the influential role of social media in educating and empowering consumers.

Consumer expectations have evolved significantly, shaped by factors such as gender, skin type, life stage, and time. Gen Z and millennials, in particular, are showing a strong inclination towards self-love, empowerment, and having diverse choices. This shift is evident in how skincare brands craft their narratives and engage with their target audience.

The growth of digital platforms and the influx of new clients are positive signs for the industry. As emerging markets gain purchasing power and become more globalised, multinational corporations are striving to offer higher-quality skincare products compared to those available domestically.

Millennials and Gen Z consumers are driving new business growth. Their preferences lean towards quick-to-market products discovered through social media channels. The rise of social shopping and the increasing availability of consumer-packaged goods online present direct-to-consumer (D2C) companies with significant opportunities to expand further into the e-commerce market. These trends highlight the importance of targeting and engaging with Millennials and Gen Z consumers through social media and online platforms for business success in todays market.

Growth Drivers

• Increased spending on personal care

• More companies entering the industry

• Advancements in technical procedures

• Personal care products becoming a means of self-expression

• Online marketplaces, social media networks, and brand websites

Priorities on the radar

• Striving for perfection in all aspects, from product creation to distribution and marketing

• Developing an omnichannel, product-centric culture focused on winning

• Enhancing product salience through a comprehensive selling and engagement ecosystem

• Increasing attention on product development and innovation

• Creating a distinctive brand with the right tiering, backed by dermatologists, and featuring a blend of art-meets-science products.

3.4 Dermatological Services

The global dermatologicals market size was valued at US$ 19,974.3 Million in 2020 and is projected to reach US$ 59,309.3 Million by 2030, registering a CAGR of 11.5% from 2021 to 2030. This substantial growth is driven by advancements in dermatology treatments, and rising awareness of skin health.

Body Contouring

At Kaya, our team of experts specialises in the art of body sculpting, recognising the individuality of every clients physique. We take pride in our ability to provide personalised assessments, tailored specifically to each clients unique needs and desired results. With a deep understanding of the human body, our professionals possess the expertise to recommend and deliver solutions that ensure optimal efficacy. Our Cool Sculpting facilities have been scaled up Pan India across cities to be able to cater to the evolving needs and demands of the customers in both metro & non metro cities. Our array of services range across concerns including fat freezing, inch loss, skin tightening and skin toning. This remains a focus category for the Kaya and we will continue to push the pedal to grow this category for the Company.

Laser Hair Reduction

Kayas Laser Hair Reduction service has become the gold standard destination across India for both men and women. As a pioneer in LHR (Laser Hair Reduction) services, Kaya employs state-of-the-art technology using US-FDA-approved laser machines to achieve long-lasting hair reduction results. By placing dermatologists and satisfied customers at the forefront of our communication and brand promise, we enhance our authenticity and appeal to customers.

Our clinics, equipped with the latest best-in-class technology coupled with dermatological expertise, ensure our customers experience the highest satisfaction in terms of outcomes and long-lasting results. For Kaya, we see Laser Hair Reduction as a key acquisition channel and have doubled down on our marketing efforts to effectively target and capture the right customers, further increasing our presence in this category across India.

Brightening and Pigmentation

At Kaya, we believe that achieving radiant, even-toned skin requires a holistic and personalised approach. Since every individuals skin is unique and has specific needs, a specialised and customised plan is essential for addressing pigmentation and brightening concerns effectively.

Our treatments are performed by experienced doctors, leveraging the expertise of our dermatologists. This ensures that each client receives professional and effective care, guided by the latest advancements in dermatological science and personalised to meet their specific requirements.

Kaya offers a comprehensive portfolio of treatments designed to target pigmentation issues and enhance skin brightness. Our advanced Q-Switch laser treatments are highly effective in reducing pigmentation, sunspots, and uneven skin tone. These lasers penetrate deep into the skin, breaking down pigment particles and promoting a more uniform complexion.

In addition to Q-Switch lasers, Kaya provides chemical peels that exfoliate the skins surface, removing dead cells and stimulating new cell growth. These peels are tailored to individual skin types and concerns, ensuring optimal results in achieving a brighter and clearer complexion.

Our portfolio also includes laser therapies that work to rejuvenate the skin, reduce pigmentation, and improve overall skin tone. These non-invasive treatments are designed to deliver noticeable results with minimal downtime, making them a popular choice among our clients.

To complement our in-clinic treatments, Kaya offers a range of skincare products formulated to enhance and maintain the results of our procedures. These products, including brightening serums and pigmentation-reducing creams, are crafted with potent ingredients that work synergistically to improve skin radiance and clarity.

As the demand for skin brightening and pigmentation treatments continues to grow, Kaya is well-positioned to meet the needs of both metro and non-metro customers. Our commitment to providing personalised, effective, and holistic solutions ensures that our clients can achieve their desired skin goals with confidence.

Whether you are looking to reduce pigmentation, achieve a brighter complexion, or maintain an even skin tone, Kayas expert dermatologists and comprehensive range of treatments are here to help you on your journey to radiant, healthy skin.

Anti-Ageing

At Kaya, we believe that a holistic approach is both necessary and crucial for treating and keeping aging at bay. Since each persons skin is unique and has specific needs, a specialised and customised plan is essential, tailored to individual skin types and concerns.

Our treatments are performed by experienced doctors, leveraging the expertise of our dermatologists. This ensures that each client receives professional and effective care, guided by the latest advancements in dermatological science and personalised to meet their specific requirements.

Kayas extensive portfolio is well-positioned to capitalise on the growing demand for anti-aging treatments among both metro and non-metro customers. We offer a wide range of services, including advanced facial rejuvenation treatments, laser therapies, Botox and fillers, chemical peels, and skin tightening procedures. These treatments are designed to address various signs of aging, from fine lines and wrinkles to loss of elasticity and uneven skin tone.

Our clinics are equipped with state-of-the-art technology and follow stringent safety protocols, ensuring that our clients receive the highest standard of care. By combining cutting-edge treatments with the expertise of our dermatologists, Kaya provides comprehensive solutions that not only target visible signs of aging but also enhance overall skin health.

As the demand for anti-aging treatments continues to rise, Kaya is committed to meeting this need with a robust and diverse portfolio of services. Whether in metro cities or non-metro areas, our clients can trust Kaya to deliver effective, personalised, and holistic anti-aging solutions, helping them maintain youthful, radiant skin

Hair Care

While everyone boasts a distinctive genetic blueprint with unique hair damage issues, the differentiator lies in addressing and managing these concerns effectively. This is precisely where Kaya takes the helm, simplifying and customising your hair care treatment journey with the most suitable and holistic treatments and procedures.

Kaya has established a strong presence in the hair care industry, offering a comprehensive portfolio of services designed to cater to a wide range of hair concerns. Kayas commitment lies in providing personalised solutions that not only tackle the visible symptoms of hair fall but also address the underlying causes, including scalp health, nutrition, and lifestyle factors.

Kayas extensive portfolio includes advanced treatments such as Platelet-Rich Plasma (PRP) therapy and Growth Factor Concentrate (GFC) PRP, which are known for their efficacy in promoting hair growth and rejuvenating the scalp. Additionally, Kaya offers Derma Roller treatments, which enhance the absorption of hair growth serums and stimulate the scalp to encourage hair regeneration.

To ensure a precise and tailored approach, Kaya utilises advanced scalp analysis tools that help in identifying the specific needs of everyone. This thorough diagnostic process allows for the formulation of targeted treatment plans that yield optimal results.

Moreover, Kaya boasts an impressive range of products that complement their in-clinic treatments. This includes hair growth serums that nourish the scalp and strengthen hair follicles, as well as nutraceuticals that support overall hair health from within. By integrating these products into your daily routine, Kaya ensures a holistic approach to hair care that extends beyond the clinic.

Category snapshot - India

• Technological innovation: The key driver in the Indian market will be advancements in technology and machine-led services.

• Strategic focus: Our strategy will emphasise expert doctor consultations utilising AI and upgrading dermatology technology in our clinics.

• Increased awareness: There is heightened awareness of dermatology-based procedures and products due to the widespread use of the internet and digital content.

• Market dynamics: The market is experiencing an influx of private equity-funded dermatology and skincare brands, particularly direct-to-consumer (D2C) brands.

• Dermatologists as influencers:

Dermatologists are being portrayed as skinfluencers, relatable to Instagram audiences aged 18 to 35.

• D2C & Omni-channel growth: D2C & omnichannel will be pivotal in driving a seamless customer journey for the Kaya ecosystem.

4. E-commerce

Indias e-commerce sector is projected to surge to US$325 Billion by 2030, driven by high internet penetration, affordable services, and a growing number of rural smartphone users, according to a report by Invest India. With 881 Million internet users, India is poised to become the worlds third-largest online retail market by 2030.

Kaya recognised the potential of this digital shift early on and swiftly embraced the opportunities presented by the tech-backed ecosystem. Our direct-to-consumer (D2C) website, shop.kaya.in, is pivotal in driving our business forward and showcasing our refreshed brand identity. With its user-friendly interface, customers can effortlessly explore and purchase tailored products and book service appointments with ease. Our omnichannel approach ensures a cohesive experience across all touchpoints, reaffirming our commitment to exceptional service. Orders placed on our D2C website are efficiently processed and delivered via our clinics, offering a unified and convenient shopping experience.

We have established a strong presence across major e-commerce platforms, making our wide range of Skincare, Hair Care, and Bath & Body products easily accessible. By featuring prominently on platforms like Amazon, Flipkart, Nykaa, and others, KAYA leverages their vast user bases and advanced algorithms for unparalleled visibility. This strategic placement ensures our products are always within easy reach, reinforcing our commitment to high-quality skincare solutions with maximum accessibility.

This visibility and accessibility are key components of our digital marketing strategy, driving brand growth and customer satisfaction.

5. Kaya Limited Overview

Kaya offers dermatologically approved and scientifically advanced solutions to enhance the health and radiance of your skin, hair, and body. We take pride in providing tailored and comprehensive care, delivered by skilled clinic professionals and supported by a network of expert dermatologists. Our innovative offerings feature cutting-edge medical technology, spanning a wide range of skin and hair care services, along with an extensive retail range. We continuously strive to expand our reach and establish ourselves as a premier player in the niche skincare domain across India and the Central Asian region.

STRENGTHS:

• 20+ years of experience in the skincare industry

• Wide network of 100+ dermatologists and 74 clinics

• Embracing innovative technology and customisation

• Strong digital presence in multiple markets

OPPORTUNITIES

• Growing demand for effective skincare services among the millennial consumer segments

• Potential for growth through digital and e-commerce channels

• Emerging trend towards self-care and wellness

• Potential for expansion into new verticals such as hair care, body care and nutraceuticals

CHALLENGES

• High fixed costs associated with operating clinics.

• Low consumer awareness of Kayas products despite quality assurance

• Dependence on key personnel in the clinic model

• Limited pool of high-quality doctors available for hiring

THREATS

• Competition from new digital-first product brands with heavy social media and digital investment

• Independent dermatologists who offer lower prices and have lower overhead costs

• New service models such as laser treatment at home and digital consultations that may disrupt the traditional clinic model.

6. Human Resource

Kayas workforce boasts a robust and dynamic team of over 1,000 professionals stationed across India. We are committed to fostering an environment that prioritises safety, motivation, and growth, where our people collaborate to drive organisational objectives, embody the Kaya ethos, and exhibit exceptional customer service and engagement.

Our workplace policies are meticulously designed to ensure a safe, inspiring, and nurturing environment that focuses on the holistic development of our employees. This commitment includes regular training and development initiatives aimed at enhancing skills and fostering career growth. Additionally, we provide continuous professional development opportunities, ensuring our team remains at the forefront of industry advancements.

At Kaya, we place a strong emphasis on embedding our culture and brand values into every facet of our operations. Our employees are consistently sensitised to these values, driving our collective pursuit of excellence and innovation. By cultivating a workplace that champions inclusivity, creativity, and professional growth, we empower our team to deliver outstanding results and elevate the customer experience.

7. Risk Management

Our organisation has implemented a comprehensive risk management framework that serves as the cornerstone of our business operations. This framework enables the identification, evaluation, and mitigation of risks that could impact our Company, thereby enhancing transparency and future readiness. By proactively managing risks, we can minimise adverse effects on our long-term business objectives, streamline operations, and optimise overall efficiency. This approach ensures that we remain resilient and adaptable, capable of navigating uncertainties and seizing opportunities for sustained growth and success.

8. Financial Overview

Particulars		Standalone			Consolidated
(in Rs Lakh)	FY24	FY23	Gr %	FY24	FY23	Gr %
Collection*	23,464	20,861	12%	44,581	42,959	4%
Net Revenue (NR)	21,032	17,831	18%	40,425	37,673	7%
EBITDA**	3,439	1,291		2,132	1,074
% to NR	16%	7%		5%	3%
PAT before OCI and NCI***	(13,872)	(8,549)		(12,965)	(11,626)
% to NR	-66%	-48%		-32%	-31%
PAT after OCI and NCI****	(13,904)	(8,550)		(13,073)	(11,395)
% to NR	-66%	-48%		-32%	-30%

*Collection includes only Clinic Collections

**EBITDA - Earnings before Interest, Tax, Depreciation and Amortisation calculated as per SEBI results ***Profit before Other Comprehensive Income and Non Controlling Interest ****Profit after Other Comprehensive Income and Non Controlling Interest

NET REVENUES

Consolidated Financials

Net Revenue at Rs 40,425 Lakh grew by 7% over FY23.

India Business

Our India business grew by 18% over FY23.

Middle East Business:

Kaya Middle East (KME) business declined by 2% over FY23.

COST OF GOODS SOLD (COGS)

COGS includes cost of materials consumed, purchases of stock-in-trade, changes in inventories of finished goods, work-in-process and stock-in-trade, consumption of consumables and stores and spare parts as well as contract manufacturing expenses.

Consolidated Financials

COGS grew by 8% over FY23.

The absolute cost has been Rs 8,125 Lakh (20% of Net Revenue) in FY24 as against Rs 7,509 Lakh (20% of Net Revenue) in FY23.

India Business

Kaya India?s COGS is 21% of Net Revenue in FY24 as compared to 21% of Net Revenue in FY23. COGS on absolute cost grew by 18% in Kaya India due to increase in Revenue.

Middle East Business

Kaya Middle East?s COGS is 19% of Net Revenue in FY24 as compared to 19% of Net Revenue in FY23. COGS on absolute cost declined by 2% in Kaya Middle East due to decline in Revenue.

EMPLOYEE COST

Employee cost includes the cost of contractual staff, personnel at the clinic staff servicing the customers and also staff at the corporate office.

Consolidated Financials

This cost of Rs 17,092 Lakh (42% of Net Revenue) at Group level has declined by 2% as compared to Rs 17,354 Lakh (46% of Net Revenue) in FY23.

India Business

Kaya India?s Employee costs at Rs 5,434 Lakh declined by 12% over FY23 due to one-time provision of Rs 880 Lakh taken for Provident Fund in FY23.

Middle East Business

Kaya Middle East?s employee costs at Rs 11,658 Lakh grew by 4% as compared to FY23.

RENTALS

Rental cost primarily includes rental place occupied to operate the clinics.

The rental cost has now become a part of Ind AS 116 Leases accounting and only short-term leases and Low value leases are now part of other expenses in Statement of Profit and Loss

ADVERTISEMENT SALES AND PROMOTION

Consolidated Financials

Cost of advertisement at Group level declined by 3% to Rs 1,801 Lakh (4% of Net Revenue) in FY24 as compared to Rs 1,859 Lakh (5% of Net Revenue) in FY23.

India Business

Kaya India advertisement costs at

Rs 1,105 Lakh (5% of Net Revenue) declined by 3% in FY24.

Middle East Business

Kaya Middle East Advertisement costs at Rs 696 Lakh (4% of Net Revenue) declined by 3% in FY24.

OTHER OPERATIVE EXPENSES

Other expenses majorly include overheads such as professional charges paid to doctors, electricity, repairs and maintenance, insurance, travel, rates and taxes, etc.

Consolidated Financials

Operative expenses at consolidated level increased by 9% to Rs 10,825 Lakh (27% of Net Revenue) in FY24 as compared to Rs 9,894 Lakh (26% of Net Revenue) in FY23

India Business:

Kaya Indias other operative expense costs increased by 22% to Rs 6,494 Lakh (31% of Net Revenue) in FY24.

Middle East Business:

KME?s other operative expense costs at Rs 4,331 Lakh (22% of Net Revenue) declined by 5% in FY24.

EARNINGS BEFORE INTEREST, TAX AND DEPRECIATION (EBITDA)

During FY24, Kaya Group registered operating EBITDA of Rs 2,132 Lakh as compared to Rs 1,074 Lakh in FY23.

Kaya India recorded EBITDA of Rs 3,439 Lakh (16% of Net Revenue) compared to Rs 1,291 Lakh (7% of Net Revenue) of FY23.

DEPRECIATION, AMORTISATION AND IMPAIRMENT

Consolidated Financials

Depreciation and amortisation expenses grew by 5% to Rs 6,303 Lakh (16% of Net Revenue) during FY24 as compared to Rs 6,013 Lakh (16% of Net Revenue) during FY23.

Impairment of Goodwill is Rs 6,667 Lakh in FY24 as compared to Rs 3,275 Lakh in FY23

India Business:

Depreciation and amortisation expenses grew by 20% to Rs 3,525 Lakh (17% of Net Revenue) during FY24 as compared to Rs 2,940 Lakh (16% of Net Revenue) during FY23.

Impairment of Investments is Rs 11,691 Lakh during FY24 as compared to

Rs 4,014 Lakh during FY23.

OTHER INCOME

Other income in FY24 is at Rs 1,321 Lakh as compared to Rs 451 Lakh in FY23.

TOTAL COMPREHENSIVE LOSS

Kaya Group?s Total Comprehensive Loss is Rs (13,073) Lakh in FY24 as compared to Rs (11,395) Lakh in FY23.

FIXED ASSETS

Consolidated Financials

Fixed Assets (net of depreciation) increased by Rs 774 Lakh during FY24 from Rs 5,351 Lakh in FY23 to Rs 6,124 Lakh in FY24.

India Business:

Fixed Assets (net of depreciation) increased by Rs 1,932 Lakh during FY24 from Rs 3,009 Lakh in FY23 to Rs 4,942 Lakh in FY24.

10. Internal Financial Controls

The Company places great emphasis on ensuring robust internal financial control systems to safeguard its financial assets and maintain transparency in its operations. The Corporate Governance Policies, roles, responsibilities and authorities, standard operating procedures and ERP are regularly reviewed by the Management to ensure they remain up-to-date and effective.

Periodic testing and certification of internal controls over financial reporting are carried out by statutory auditors, covering all offices, factories, and key business areas. The Company engages external firms to perform internal audit reviews based on a risk-based internal audit plan approved by the Audit and Risk Management Committee. These firms report on significant audit observations and recommend follow-up actions, which are closely monitored by the Committee.

The Audit and Risk Management Committee regularly reviews the adequacy and effectiveness of the Company?s internal control environment and closely monitors the implementation of audit recommendations, particularly those relating to strengthening the Company?s risk management policies and systems. These measures ensure that the Companys risk management framework is robust and effective in mitigating risks to its operations and financial performance.

Cautionary Statement

This Report contains forward-looking statements about the Companys objectives, projections, estimates, expectations, and predictions, which are subject to applicable securities laws and regulations. While these statements are based on reasonable assumptions, there is a possibility that actual results may materially differ from the expressed or implied expectations