Professional Documents
Culture Documents
Healthcare Industry
September 2015
Healthcare
1. Industry Profile 1
1.1 Sector overview 1
1.2 Sector size 3
1.3 Competitive landscape 4
1.4 Environmental scanning 5
2. Market Trends and Outlook 8
2.1 Key economic indicators-India 8
2.2 Health profile 11
2.3 Healthcare infrastructure 15
2.4 Foreign investments 18
2.5 Medical tourism and health insurance 19
2.6 Market outlook 19
3. Leading Players and Comparative Matrix 20
3.1 Leading players 20
3.1.1 Apollo Hospitals Enterprise Limited (AHEL) 20
3.1.2 Fortis Healthcare Limited (Fortis) 22
3.1.3 Max India Limited (Max) 24
3.2 Comparative matrix 26
3.3 SWOT analysis 28
Over the last few years, the Indian healthcare industry has taken great strides in developing its
various component parts, from its infrastructure and delivery, to how it handles government
spending, medical tourism, health insurance, human resources or telemedicine. Various
government initiatives have acted as a catalyst and also boosted the private sector participation
in this sector. The Ministry of Health and Family Welfare (MOHFW) is the apex health body in
the country. The annual expenditure of MOHFW grew at a CAGR of 11% during 2009-14. It
surpassed INR 300bn (~USD 5bn) in FY14. The ministry is subdivided into four departments,
namely the Department of Health and Family Welfare, Department of Health Research,
Department of AYUSH and Department of AIDS Control.
Chart 1: Annual expenditure of Ministry of Health and Family Welfare (in INR bn)
388.0 351.6 0.5
0.45
338.0 301.3 0.4
271.9 278.8
288.0 0.35
244.4
238.0 0.3
210.0
176.6 19% 0.25
188.0 16% 17% 0.2
11% 0.15
138.0 8%
0.1
88.0 3%
0.05
38.0 0
FY09 FY10 FY11 FY12 FY13 FY14 FY15*
The Indian healthcare system is diverse and consists of modern medicine as well as alternative
systems like Ayurveda, Homeopathy and Unani. The sector comprises a large number of private
and unorganized players which flourish due to the lack of a regulatory framework. India is the
world’s second most populous country - one of the reasons for its large healthcare burden. High
rates of malnutrition are persistent across the country with around 70% of adolescent girls
suffering from anaemia.
According to the World Health Organization (WHO), communicable diseases accounted for
about 38% of its disease burden. Non-communicable diseases (NCDs) are also emerging as a
new threat. It is expected that NCDs will account for 59% of total deaths by 2015. The situation
is worsening as NCDs are occurring around 10 years earlier in India than in western countries.
This state poses a challenge as well as the opportunity for service providers. With rising
purchasing power, literacy and awareness, the per capita spending on healthcare is expected to
rise consistently over the coming years.
Healthcare India 1
India lagged behind the world’s major countries in terms of total expenditure on health as a
percentage of GDP. It was also far behind in terms of government expenditure on health.
Around 68% of the health expenditure was borne privately, a much larger contribution than in
developed and emerging countries.
Healthcare India 2
1.2 Sector size
According to the WHO, the size of India’s healthcare industry was around USD 79bn as of 2013.
Government accounted for around 32% of the total spending, while the private sector accounted
for the remainder.
Chart 2: Size of Indian healthcare industry in terms of annual expenditure (USD bn)
90.0 50%
78.6
80.0 75.5 73.6
66.5 40%
70.0
60.0 52.6 55.3 30%
48.4 20%
50.0
14% 20%
40.0
9%
5% 7%
30.0 10%
20.0 -3%
0%
10.0
0.0 -10%
2007 2008 2009 2010 2011 2012 2013
The major emphasis of the Indian government over the last few years has been on rural health.
The fact that almost 70% of the government planned outlay was on its flagship programme
NRHM substantiates this statement. Buoyed by the success of NRHM in raising the rural health
standards, the government grouped the National Urban Health Mission with NRHM under one
umbrella programme named as the ‘National Health Mission’(NHM) in FY14. The Department of
Health and Family Welfare accounted for 90% of the total plan outlay as of FY15.
Department of AYUSH
90%
Healthcare India 3
1.3 Competitive landscape
0
FYE10 FYE11 FYE12 FYE13 FYE14 FYE15
Healthcare India 4
high growth in demand for healthcare equipment. However, medical equipment itself is a very
competitive industry consisting of both local and foreign players. This existing competition
prevents suppliers from bargaining too much with customers. The switching cost to suppliers in
this sector is low, resulting in their low bargaining power.
8%
2%
4%
6%
7%
52%
3%
8%
10%
BJP (NDA) NDA-others INC (UPA) UPA-Others AIADMK AITC BJD TRS Others
Source: The Economic Times
Healthcare India 5
1.4.2 Economic environment
India suffered through persistent high inflation during the past two years. This kept interest rates
high throughout the period, resulting in a slower credit off-take and industrial slowdown. Current
account deficit (CAD) also reached record high levels in FY13, causing a steep depreciation in
the Indian rupee. Rupee’s depreciation and rising global crude oil prices bloated the CAD to all-
time-high levels. The government did not have much flexibility as far as import of crude oil was
concerned. It did impose additional duties on the import of gold, which like crude, accounts for a
major portion of the country’s burgeoning trade deficit. Several import curbs undertaken by the
government, coupled with growth in exports, brought down the CAD to a great extent in FY14
and FY15. Large fiscal deficit did not leave much room for growth in the government’s health
expenditure.
0
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Healthcare India 6
1.4.4 Ecological environment
India, with its tropical climate, is a breeding ground for a plethora of tropical diseases.
Thousands of people die every year due to malaria, dengue, tuberculosis and other fatal
diseases. This further necessitates the country’s need to develop its healthcare sector. There is
a growing need for large scale vaccinations and health awareness programmes as India suffers
from widespread illiteracy and poverty. Frequent natural calamities like floods, storms,
landslides and famines, demands a well-developed health infrastructure in the country capable
of dealing with emergency situations. The government is providing various incentives like tax
breaks and soft loans to promote health infrastructure in the remote parts.
The vision for the Indian healthcare industry for the 12th Plan period (2012-17) is to achieve
acceptable standards of healthcare for the people. However, India still does not have a central
regulatory authority for its healthcare sector. In 2011, a high level expert group constituted by
the Planning Commission of India suggested setting up a National Health Regulatory and
Development Authority to monitor both government and private sector healthcare providers. The
group has also proposed to establish National Health and Medical Facilities Accreditation
Authority (NHMFA) for defining the standards of Indian healthcare facilities.
th
Table 2: Targets to be achieved in respect of healthcare during the 12 Plan (2012-17)
Infant Mortality Rate Reduce to less than 27 per 1000 live births by 2017
Maternal Mortality Ratio Reduce to less than 100 per 100,000 live births by 2017
Source: MOHFW
Healthcare India 7
2. Market Trends and Outlook
2.1 Key economic indicators-India
India is Asia’s third largest economy with a population of around 1.25bn. It went through a
period of rapid economic growth with average GDP growth rate of over 7% in the first decade of
this millennium. However, in fiscal years 2012-14, the country saw successive declines in GDP
growth due to high inflation and interest rates. The economy finally showed some signs of
recovery after the formation of a new government with GDP growing by 5.7% y/y in the first
quarter of FY15. The government changed the base year and switched to a market-price
calculation of gross domestic product, which led to a revision in GDP growth rate to 7.5% in
3QFY15.
In June 2013, Fitch revised India’s credit outlook from negative to stable with a BBB- long term
rating. Current account deficit grew to around 5% of GDP in March 2013, which fuelled the
depreciation of the currency and caused the INR to reach all-time low. The macroeconomic
situation improved significantly since then and the currency was stable till July 2015. However,
depreciation of the Chinese Yuan led to a fresh round of decline in August 2015.
Source: CEIC
Healthcare India 8
Indian suffered from high inflation during FY10-14. The most worrying factor was the consistent
rise in food prices which ate into the disposable income of the Indian middle class. Both the
inflation indicators - Wholesale Price Index (WPI) and Consumer Price Index (CPI) - were above
the comfort zones of RBI in most part of FY14. However, steep decline in crude oil prices
brought a much needed relief from inflation. WPI inflation declined considerably in FY15-16,
falling to a five-year low of -4.1% in July 2015. CPI also saw a significant decline, falling to 3.8%
in July 2015.
-2.0%
-4.0% -2.1% -2.3% -2.4%
-2.4% -2.4%
-6.0% -4.1%
CPI-Inflation WPI-Inflation
Source: CEIC
In order to curb inflation, RBI increased the policy rate (repo rate) 13 times between March 2010
and October 2011. RBI raised hopes of the industry by cutting repo rate by 50 basis points
between January–May 2013, but had to gradually raise it again due to sticky inflation. Between
January–December 2014, RBI kept the rate stable at 8% despite lower inflation. Falling inflation
finally induced it to cut the rate by 75 bps in three phases in January, March and June 2015.
Source: CEIC
Healthcare India 9
The healthcare sector is a part of public administration, defence and other services. The
sector’s contribution was 13% to the overall GDP in FY14. Hence, it was an important
contributor to the country’s GDP.
Manufacturing 3%
Source: MOSPI
The public administration, defence and other services group registered a growth of 7.4% in
FY15, against 8.2% in FY14.
Chart 12: Percentage change over previous year- GDP by sector (base 2011-12)
22.0
21.0 19.7
20.0
19.0
18.0
17.0
16.0 14.4
15.0
14.0
13.0
12.0
11.0 9.1
10.0
9.0 6.9 7.1
8.0
7.0
6.0
5.0
4.0 2.4 2.8
3.0
2.0 0.1
1.0
0.0
Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15
Healthcare India 10
2.2 Health profile
In the past ten years, India’s health profile has improved but it still lags far behind in many
health status indicators. Child mortality rate per 1000 live births has declined significantly, but it
was still higher than the global and regional average. The neighbouring countries like Nepal and
Sri Lanka had better child mortality rates. The Ministry of Health (MoH) has targeted to reduce it
to less than 27 per 1000 live births by 2017. One of the millennium development goals is to
reduce the child mortality rate to 42 by 2015. India is striving hard to achieve this goal but is
likely to miss the target date of 2015.
Chart 13: Child mortality rate (under 5 years) per 1000 live births
77
71
72 69
67
65
67
60
62
57
55
57
52
50
52
47
42
2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: World Bank
Maternal mortality rate per 100,000 live births has also decreased in the last decade, declining
by almost 40% between 2001 and 2013. Healthcare’s expanding reach was one of the main
reasons for such an improvement. The MOHFW intends to reduce this rate to less than 100 by
the end of 2017. The millennium development goal is to achieve a ratio of below 109 by 2015.
301
309
254
259
212
209 200
190
159
109
2001-03 2004-06 2007-09 2010-11 2012-13
Source: Sample Registration System, Office of Registrar General; World Bank
Healthcare India 11
Infant mortality rate per 1000 live births has also decreased in the last few years, but it is still not
enough to meet the target of millennium development goal by 2015. The infant mortality rate
was at 39 in 2014, much above the achievement target of 26 by 2015. At the current rate of
decline, it is highly unlikely that the target would be achieved. India is focusing on child and
maternal health to improve these indicators.
Chart 15: Infant mortality rate (under 1 year) per 1000 live births
63
57
58 55
53
53 50
47
48
44 43
43 41
39
38
33
28
2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: MOHFW
India has performed well in another health related millennium development goal that is linked to
HIV/AIDS infection. According to UNICEF, India had a low HIV prevalence of 0.34%, but in
terms of absolute numbers, it had the third largest number of people living with HIV in the world.
India had an estimated 2.1mn people living with HIV/AIDS as of 2013. However, the country
reported a 20% decline in new infections between 2000 and 2014. India had 130,000 new
infections in 2011 compared to 261,000 in 2000. The government, together with several NGOs,
has played a major role in reducing the number of new infections.
230
228 200
179
178 164
152
143
134 132 130 130
128
78
28
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: MOHFW
Healthcare India 12
India is registering more than 25mn births every year. Fertility rate is falling faster in India and is
expected to reach replacement levels by 2020. However, there is a growing need to look after
the health of both mother and the new-born. Private nursing homes are springing up across the
country to cater to the healthcare needs for pregnancy and related medical situations.
Despite the recorded number of births every year, more than a quarter of deliveries in the
country are not assisted by any trained healthcare personnel. This is the reason for the high
maternal and infant mortality rate. MoH targets increasing institutional births to 80% in order to
ensure greater safety for the mother and baby. To achieve this, it also launched a programme
named “Janani Suraksha Yojna” in 2005. The intervention has shown results as institutional
births grew from 47% in 2007 to 74% in 2013.
60.0
50.0 47.0
40.9
40.0
30.0
20.0
10.0
2003 2007 2009 2013
Source: MOHFW
Healthcare India 13
Communicable diseases have been a major cause of deaths in India, which is home to a large
number of communicable diseases like malaria, tuberculosis, diarrhoea, pneumonia and others.
Most of these diseases are curable and deaths occur due to lack of proper healthcare. In 2013,
pulmonary tuberculosis was the single largest killer among all the communicable diseases. The
government and private sectors have been running awareness programmes to promote
vaccination for some of these diseases, and comprehensive treatment in case of others like
tuberculosis.
Non-communicable diseases have grown significantly over the last decade due to changing
lifestyle and rising domestic per capita income. India has one of the largest cases of non-
communicable diseases like heart disease, hypertension, diabetes, cancer and other such
diseases. Most of these are long-term diseases and increase the healthcare burden of the
individual and the nation. As of 2015, diabetes emerged as the second largest among all the
non-communicable diseases with an estimated number of cases surpassing the 45mn mark,
recording a growth of 21% as compared to 2010. India is increasingly being termed the
‘diabetes capital of the world’.
Chart 20: Growth in cases of non-communicable diseases during 2010-15 (In mn)
70
61.5
60
50 45.8 46.9
37.7
40
30
20
10
0.9 1.14
0
Diabetes Coronary Heart Diseases Cancer (All Types)
Source: Central Bureau of Health Intelligence
Healthcare India 14
2.3 Healthcare infrastructure
The country’s health infrastructure ranges from sub-centres in rural areas, which are the
smallest government healthcare entities, to large scale tertiary integrated health centres like
AIIMS (All India Institute for Medical Sciences). Besides, there is substantial participation of the
private sector in developing and maintaining local health infrastructure. Since the launch of the
National Rural Health Mission (NRHM/NHM) in 2005, there has been considerable improvement
and expansion of health infrastructure. During 2005-14, the number of health sub-centres
increased by 4%, while the number of primary health centres (PHCs) grew by 7%.
Source: MOHFW
Despite on-going improvements in its infrastructure, the healthcare system is still struggling with
the shortage of medical professionals. There is a shortage of trained and qualified resources in
all segments of the healthcare system, be it primary, secondary or tertiary. As of 2012, there
was a shortage of 70% in the number of specialists as compared to the requirement for the
existing health infrastructure of the country.
Healthcare India 15
During 2006-13, the average population served per government hospital declined at a CAGR of
18% due to rapid growth in the number of new hospitals across the country. There was a huge
increase in the number of hospitals in 2011-13, thanks to a four-fold increase in rural hospitals.
The average population being served by a government hospital reduced drastically to 34,163 in
2013, down 33% y/y.
80,000
50,689
60,000
34,163
40,000
20,000
0
2006 2007 2008 2009 2010 2011 2012 2013
Source: CBHI
1,800 1,512
1,600
1,400
1,200
1,000 879
800
2006 2007 2008 2009 2010 2011 2012 2013
Source: CBHI
Healthcare India 16
Along with a modern medicine infrastructure, India has a developed traditional medicine system
that is backed by the central and state governments. These systems include Ayurveda, Unani,
Siddha, Yoga, Naturopathy, Homeopathy, Amchi and others. The MoH has a separate division
that caters to these systems under the ‘Department of AYUSH’ (Ayurveda, Yoga and
Naturopathy, Unani, Siddha and Homeopathy) formed in November 2003. As of 2014, the
infrastructure under AYUSH department consisted of 3,601 hospitals and 25,492 dispensaries.
The department was the biggest beneficiary of NRHM/NHM and saw a four times growth in the
number of dispensaries and 17 times growth in the number of hospitals during 2006-14.
20,000
15,000
10,000 5,803 5,836 3,601
3,367 3,378 3,408 3,193 3,155 3,378
5,000
228 230
0
2006 2007 2008 2009 2010 2011 2012 2013 2014
Hospitals Dispensaries
Source: MOHFW
Among the traditional medicine systems, Ayurveda was the dominant one with around 79%
share of the total number of AYUSH hospitals as of 2014. It was followed by Unani, Siddha and
Homeopathy.
6% 1%
7%
7%
79%
Source: CBHI
Healthcare India 17
2.4 Foreign investments
Healthcare has become the preferred choice of foreign investors over the years. Capital flows
from private equity players, venture capitalists, institutional investors and multinational
companies have increased in the last few years. According to the Department of Industrial
Policy and Promotion, the cumulative FDI inflow in hospital and diagnostic centres was USD
2.9bn during April 2000 and March 2015. In 2014, the sector registered private equity deals with
a value of USD 868mn. However, it declined by 31% y/y.
Chart 26: Private equity investments in healthcare sector (In USD mn)
1400 1,300 1,264
1200
1000
868
800
600 498
421
400 300
200
0
2009 2010 2011 2012 2013 2014
Source: The Economic Times
The existing gap in supply and demand is attracting investors to this sector. The sector was
ranked fourth in terms of private equity deals in 2014.
Healthcare India 18
2.5 Medical tourism and health insurance
Though medical tourism is generally a part of the healthcare industry worldwide, it is governed
by the Ministry of Tourism in India. The segment was expected to touch USD 6bn by 2018
according to a study conducted by PHD Chamber of Commerce and Industry. According to the
study, the number of foreign tourist arrivals in India for medical tourism reached 230,000. Health
insurance is another growing segment of the healthcare industry and is regulated by the
Insurance Regulatory and Development Authority (IRDA), an autonomous body. The size of the
health insurance market is expected to exceed INR 266bn by 2016.
Chart 27: Size of Indian health insurance industry-Forecast (in INR Bn)
315.0
266.0
265.0
231.0
215.0 192.0
160.0
165.0
131.0
111.0
115.0 83.0
66.0
51.0
65.0 32.0
22.0
15.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Max India
As evident from the industry trends, huge demand-supply gap exists in the Indian healthcare
sector. The country lags behind in terms of the average number of hospitals, hospital beds,
doctors, nurses and other paramedical staff. The huge population accompanied with large
prevalence of communicable and non-communicable diseases demands large scale
development and growth in this sector. Private sector is playing a big role in this regard,
accounting for more than 65% of the country’s health expenditure.
The outlook for Indian healthcare is positive, owing to high growth rate in almost all of its
segments, whether its primary, secondary or tertiary healthcare, medical equipment,
diagnostics, health insurance or medical tourism. The ever growing population, increasing
government expenditure on health and growing per capita income will increase the size of this
industry in the years to come.
Healthcare India 19
3. Leading Players and Comparative
Matrix
3.1 Leading players
Apollo Hospitals Enterprise Limited is one of India’s largest healthcare groups founded in 1983
and based in Chennai. The company has around 10,000 beds spread across 75 hospitals in
domestic and international locations. Apart from India, the group also operates in Bangladesh
and Mauritius It had around 5,000 doctors on its payroll as of June 2015. The company lists its
shares on the Bombay Stock Exchange (BSE: 508869) and the National Stock Exchange (NSE:
APOLLOHOSP). Pratap G Reddy is the largest shareholder with 19.57% holding and the
remainder is owned by other promoters, institutional and non-institutional investors.
The business of Apollo group comprises clinics, hospitals, healthcare projects, healthcare BPO
and health education. The company also provides health insurance through its joint venture firm
“Family Health Plan Limited” with Munich Health Holding AG. Healthcare services accounted for
64% of the group’s revenues in FY15, while the remainder came from pharmacy and other
businesses.
Chart 28: Segment wise revenues of AHEL (FY15)
2%
34%
Healthcare services
Pharmacy
Others
64%
Healthcare India 20
In the last five years, the gross revenues of Apollo Hospitals grew at a CAGR of 19% due to
growth in demand for healthcare services. The group performed well in terms of operating and
financial results during the last four years. In FY15, its total revenue grew by 18% y/y.
The profit margins of Apollo hospitals grew in FY15 due to a comparatively higher growth in
revenues. As a result, EBIDTA margin grew by 66bps. Meanwhile, the net profit margin declined
by 66bps on a y/y basis due to higher tax expense.
12.0%
10.0%
8.1%
8.0% 7.1% 7.0% 7.2%
6.6%
6.0%
FY11 FY12 FY13 FY14 FY15
Healthcare India 21
3.1.2 Fortis Healthcare Limited (Fortis)
Source: Infinancials
Fortis Healthcare Limited is one of Asia’s leading healthcare groups, founded in 2001 and
based in Delhi. The company has over 10,000 beds spread across 54 healthcare facilities and
260 diagnostic centres in various domestic and international locations. Apart from India, the
group also operates in Dubai, Singapore, Sri Lanka and Mauritius. It established the first
hospital at Mohali, Punjab. The company lists its shares on the Bombay Stock Exchange (BSE:
532843) and the National Stock Exchange (NSE: FORTIS). Fortis Healthcare Holdings Pvt. Ltd.
is the largest shareholder with 71.20% holding and the remainder is owned by other promoters,
institutional and non-institutional investors.
The business of Fortis group comprises clinics, hospitals, primary healthcare, day-care,
specialty and diagnostics. Indian operations accounted for 95% of the group’s revenues in
FY15, up from 53% in FY13 as the company sold off its Australian, Vietnamese and Hong Kong
units to reduce debt. In May 2013, the company completed the sale of its Australian subsidiary,
Dental Corporation, for around USD 263mn. In June 2013, it sold a majority stake in Vietnam's
Fortis Haon My Corporation for USD 80mn to Chandler Corporation. In October 2013, the Hong
Kong unit sale helped the company to raise USD 355mn from insurance provider Bupa.
95%
Healthcare India 22
During 2010-13, the gross revenues of Fortis grew at a CAGR of 85%, thanks to expansion in
both Indian and overseas business. However, in FY14, the group recorded a revenue decline of
40%. The sale of overseas entities in Australia, Vietnam and Hong Kong led to this decline. In
FY15, its sales grew by 8% y/y.
The profit margins of Fortis have been volatile over the last few years due to the higher
financing costs arising out of debt. In FY14, the EBIDTA margin declined by more than 600bps,
while net profit margin declined by around 500bps. High interest expenses ate into the sale
proceeds of overseas units, thus pulling down the net profit margin. In FY15, EBIDTA margin
declined by 60bps, while net profit margin slipped into the negative territory due to an increase
in other expenses.
Healthcare India 23
3.1.3 Max India Limited (Max)
Source: Infinancials
Max India Limited is an Indian conglomerate which has interests in multiple businesses that
includes healthcare, health insurance, research and packaging. The company’s healthcare
division has more than 2,000 beds and a team of 1,250 doctors, 1,900 nurses and 1,700 other
trained medical professionals. It was founded in 2001 and is based in Delhi. The company lists
its shares on the Bombay Stock Exchange (BSE: 500271) and the National Stock Exchange
(NSE: MAX). Xenok Ltd. is the single largest shareholder with 9.03% stake and the remainder is
owned by other promoters, institutional and non-institutional investors.
The group recorded consolidated revenues of INR 117bn in FY14. Max Life insurance was the
biggest revenue earner, accounting for 62% of the total revenues. Healthcare operations
accounted for 17% of the company’s revenues, while 3% came from health insurance business.
12%
3%
6%
17%
62%
Healthcare India 24
During 2011-15, the gross revenues of Max India grew at a CAGR of 22%, backed by growth in
both life insurance and healthcare business. In FY15, the company recorded a revenue growth
of 27% y/y.
140.0 130%
116.2
120.0 110%
105.5
100.0 90%
76.4
80.0 66.7 70%
0.0 -10%
FY11 FY12 FY13 FY14 FY15
The profit margins of Max India have declined considerably in FY15 due to rise in operational
expenses and finance costs. The EBIDTA margin grew by 60bps, while net profit margin y grew
by around 70bps due to an increase in revenues.
-10.0%
-13.1%
-15.0%
Healthcare India 25
3.2 Comparative matrix
As of fiscal year ended March 2015, AHEL had a strong balance sheet with low debt-to-equity
ratio and a favourable quick ratio. Fortis has significantly improved on its debt levels and
brought its net debt-to-equity ratio to much lower levels in FY15. However, the company’s
debt/EBIDTA ratio is still considerably high.
Growth
Profitability
Capital Structure
Asset Utilization
Payout % 0 23.54 0 0
Healthcare India 26
As of the first quarter ended June 2015, AHEL recorded the highest y/y sales growth among the
three players. It also led in terms of net profit growth. Max India recorded a steep decline on the
contrary. Fortis saw a growth in margins despite a fall on absolute basis.
Healthcare India 27
3.3 SWOT analysis
Increasing government
Declining bed occupancy Consistent increase in per expenditure may take
Strong brand value
rate capita health expenditure away business of private
players
Slowdown in economy
Strong financial Lower average revenue
Large supply-demand may have a negative
performance in last four per occupied bed than
gap in healthcare effect on health
years peers
expenditure
Increasing government
Declining profits and profit Consistent increase in per expenditure may take
Strong brand value
margins capita health expenditure away some business of
private players
Large network of hospitals Reported net loss in last Large supply-demand gap Acquisitions recently done
and health centres fiscal in healthcare may turn out unprofitable
Healthcare India 28
SWOT analysis of Max India
Increasing government
Employs cutting edge
Network concentrated in Consistent increase in per expenditure may take
technologies and
North India only capita health expenditure away some business of
equipment
private players
Non-healthcare segments
Profitable healthcare Declining profits and profit Large supply-demand gap
may cause a strain on
segment margins in healthcare
profits
Notes:
Fiscal Year assumed in report: April 1 to March 31
1 USD = 65.67 INR (Sep 20, 2015)
The research report is based on material compiled from data considered to be reliable at the time of
writing. However, information and opinions expressed will be subject to change without notice. Emerging
Markets Direct Media Holdings LLC does not accept any liability directly or indirectly that may arise
from investment decision-making based on this report.
Healthcare India 29