Being one of the largest industries both in terms of revenue and employment, this industry is growing at high pace due to factors like increase expenditure and investment by public and private players and also the increased scope and coverage both geographically and in terms of services. With the industry contributing about 4% to the Indian GDP, the future prospects look promising with key growth drivers being the rise in the purchasing power of middle class, higher awareness of chronic diseases and the increase in the number of lifestyle related diseases.
With the industry highly divided between public and private players, the higher degree of coverage lies with the government with public hospitals is most cities and villages. Private players however, have focused only on Metros, Tier 1 and Tier 2 cities for setting up facilities. With a pool of medical professionals and low operational costs, India is poised to make this industry grow at an 11% CAGR to reach to $140 billion by 2017. With a significant rise in net disposable income and easier access to healthcare facilities, the country does exhibit high growth potential in the coming decade.
The structure of the industry is as follows:
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With a staggering 75%, hospitals account for most share of the healthcare expenditure, this is done majorly to increase the servicing capacity that is low in most parts of the country. Pharmaceuticals segment is also a major chunk with a lot of expenditure being made for that as well.
Within the domestic economy, some major players in the hospitals segment have stepped up investment rapidly to tap the demand potential. Apollo Hospitals, with a market capitalization of around INR 20,000 Crores is the front-runner with revenue of INR 4500 Crores.
Some of the key elements for ensuring higher returns and improve the ROCE are:
However, the overall performance of the Indian Hospital business has been muted due to the incidence of on-off costs and temporary reductions of facilities and operations due to infrastructural bottlenecks.
Some of the recent moves in the industry have been:
Indira Gandhi Multi Specialty Hospital in Haryana is now upgrading its bed capacity to 200 beds from 100 beds, a similar move is being carried out by its many other peers.
The American College of Cardiology (ACC) has collaborated with Apollo Hospital to provide opportunities to cardio vascular physicians’ trainings to increase the quality of the service provided by the company.
Acquisition of the UK’s Alpha Hospitals to Cygnet Healthcare for about INR 970 Croreto increase the focus it has on the Indian healthcare industry.
Entry by companies like Call Health in to the virtual healthcare services market is a move that will disrupt the current segmentation of the industry.
Due to the level of increased professionalism in medical practices and in the use of higher quality hospital equipment, the industry is poised to grow into as global giant. Major players like the Apollo Group, Fortis, Max, Wockhardt, and Ranbaxy are making investments into increasing the depth and range of their operations across the country. We believe thus that the industry will grow to $165 Billion by 2018 with a CAGR of about 14%. We do observe that the existing companies are not yet as profitable and thus the looming debt will outcast the growth prospects unless the companies use better management practices and increase the number of beds with which they operate.
Growth in the end-to-end virtual market by companies in the industry and the increasing interest of businesses to tap into the Indian market will lead to a series of major acquisitions and takeovers by foreign players.
What this report contains:
A detailed overview of the industry
Structure of the industry from both, domestic and international perspectives
Related industries that this industry has inter-dependencies with and their understanding
Detailed analysis of industry segments in terms of the value and depth of corresponding market
Analysis & insights about the elements and critical success factors of this industry using strategic models
A forecast on the state of this industry in 2020, predicting the growth and movement patterns for 2016 - 2020
Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants
Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models