INDUSTRIAL EXPOSUREPROJECT

A STUDY OF SPECIALIST HOSPITAL INDUSTRY

“Fortis Healthcare Limited (FHL)”

Submitted in Partial Fulfillment of the requirements for
the Award of Degree of Bachelor of Business
Administration (BBA)

2016-2019

Submitted by: Gaurav shokeen

Under the guidance of: MR. Shakti Sharma

BHARATI VIDYAPEETHUNIVERSITY
SCHOOL OF DISTANCE EDUCATION,
Academic Study Center – BVIMR, New Delhi
(A Constituent Unit of Bharati Vidyapeeth
University
,Pune)AnISO9001:2000CertifiedInstitute

1
 NAAC Re-Accreditation Grade “A” University

ACKNOWLEDGEMENT

This project is a result of dedicated effort. It gives us immense pleasure to

prepare this A STUDY OF SPECIALIST HOSPITAL INDUSTRY “Fortis
Healthcare Limited (FHL)” We would like to thank our project guide MR.
SHAKTI SHARMA, for consultative help and constructive suggestions
on the matter on this project. We would like to thanks our parents and
colleagues who have helped us in making this project a successful one.

2
 DECLARATION

This is to certify that I have completed a Project titled " A STUDY OF

SPECIALIST HOSPITAL INDUSTRY “Fortis Healthcare Limited
(FHL)” under the guidance of MR. SHAKTI SHARMA in the partial
fulfillment of the requirement for the award of Bachelors of Business
Administration of BharatiVidyapeeth University, New Delhi. This is an
original piece of work & I have not submitted it earlier elsewhere.

Gaurav shokeen

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 CONTENTS
CHAPTER 1:- Introduction to Company
1.1:- Nature of Business/History
1.2:- Type & Ownership pattern
1.3:- Organisational structure
1.4:- Production Layout
1.5:-Organizational Policies
CHAPTER 2:- Industrial Analysis
2.1:- Industrial Overview
2.2:- Current Issues
2.3:- Key Competitors
2.4:- Environmental Scanning (PESTEL analysis)
2.5:-Porter’s Five Forces Model of Competition
CHAPTER 3:- Marketing Strategy
3.1:- Products of the company
3.2:- 4'Ps
3.3:- STP (Segmenting Targeting and Positioning)
3.4:- Distribution Channels
3.5:- Promotion Strategy
CHAPTER 4:- Financial Analysis
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 4.1:- Sources of Finances
4.2:- Ratio Analysis (Any 3)
4.3:-Net Profit or Net Balance Sheet
CHAPTER 5:- Key learning from the company and
Recommendations
5.1:- Performance Analysis of the company [Minimum 4-5
lines]
5.2:- Reasons for the diversification of the company
5.3:- Comment on Organizational Leadership
5.4:- Market Share / Growth Rate of the company
5.5:- SWOT Analysis of the company
CHAPTER 6:- Finding
CHAPTER 7:- Conclusion

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1.1 Nature of Business/History:-
Fortis Healthcare Limited (FHL) is a chain of specialist hospitals in India. FHL in a
₹3900 crore deal will be acquired by Manipal Hospitals and TPG Capital along with the
sale of 20 per cent stake in diagnostics chain SRL Ltd. [4] This will make the combined
entity the largest healthcare provider in India by revenue with 41 hospitals in India and 4
hospitals overseas with over 11000 beds.

Facilities

In 2010, Fortis Healthcare bought a 23.9% stake in Singapore's Parkway Holdings Ltd.

Fortis sold its stake to Malaysia's Khazanah Nasional on 27 July 2010.[5]

Fortis Memorial Research Institute, Gurgaon (FMRI) is a flagship hospital of the Fortis
Healthcare Limited. FMRI is a multi speciality quaternary care hospital.[6]

Fortis Malar Hospital formerly known as Malar Hospital is a multi specialty hospital
located at Adyar in Chennai, India. It was established in 1992 and was acquired by Fortis
in 2007.[7]

Fortis Bangalore is a branch of Fortis Healthcare that operates four hospitals in or

near Bangalore, Karnataka.

HISTORY
The registered office of the Company was initially situated at 25, Nehru Place, New Delhi 110 019,
India. Pursuant to a Board resolution dated September 16, 2003 the registered office was shifted to B-
9, Maharani Bagh, New Delhi 110 065, India. Subsequently, pursuant to Board resolution dated
February 10, 2006 the registered office of the Company was shifted to Piccadily House, 275- 276, 4th
Floor, Captain Gaur Marg, Srinivas Puri, New Delhi 110 065, India, which is the current Registered
Office.

Scheme of merger/amalgamation between Fortis Medical Centre Holdings Limited and the Company
dated October 7, 2005:

The High Court of Delhi, through its order dated October 7, 2005 in respect of the company petition
(C.P. No: 240/2005 and 241/2005) approved the scheme of amalgamation/merger between the
Company and Fortis Medical Centre Holdings Limited ("FMCHL"), and which at the time of
amalgamation was our board controlled subsidiary, with effect from April 1, 2004 ("Scheme").

Salient features of the Scheme:

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The principal terms of the Scheme, as sanctioned by the High Court of Delhi, are set forth below: The
entire undertaking and business, all properties, tangible and intangible assets including trademarks,
patents, design, copyrights, investments, approvals, licenses, tax benefits, pending projects, debts,
liabilities and obligations, including income tax liabilities accrued or to accrue in FMCHL was
transferred to the Company with effect from April 1, 2004. Pursuant to the Scheme, Fortis Hospital,
Amritsar was transferred to the Company. However, the transfer of the aforesaid was subject to the
existing charges or hypothecation in respect of the assets of FMCHL.

All the staff, workmen and employees of FMCHL in employment on the date immediately preceding
December 23, 2005 (i.e., the date on which a certified copy of the order of the High Court of Delhi
was filed with the RoC) became the employees of the Company without any break or discontinuity in
service and on conditions not less favourable than those subsisting at FMCHL.

In consideration of the transfer and vesting of the undertaking and the assets and liabilities of FMCHL
and in consideration of the mutual covenants agreed to in the Scheme, the Company agreed to allot the
Equity Shares to the existing shareholders of FMCHL, in the ratio of 1:4 (i.e., one Equity Share in
exchange of every four equity shares of FMCHL of Rs. 10 each).

In compliance with the Scheme, the Company allotted 520,000 Equity Shares to the shareholders of
erstwhile FMCHL on February 10, 2006.

Major Events:

Year Event

June 2001 Commissioning of Fortis Hospital, Mohali. August 2003 Inauguration and commissioning
of Fortis Hospital, Amritsar. October 2003 Executed an agreement with Seth Jessa Ram and Bros
Charitable Hospital Trust for the operation and management of Jessa Ram Hospital, New Delhi.
August 200 Commissioning of Fortis Hospital, Noida. September 2005 Acquired 90% of the equity
share capital of Escorts Heart Institute and Research Centre Limited resulting in the acquisition of
EHCL, EHSSIL, EHSSHL and EHRCL. October 2005 Signed an agreement with Jeewan Mala
Hospital Private Limited for the operation and maintenance of Jeewan Mala Hospital, New Delhi.
January 2006 Signed an agreement with Sunrise Medicare Private Limited for the operation and
management of Fortis La Femme, New Delhi, and acquisition of 5% equity interest in Sunrise
Medicare Private Limited, with an option to acquire additional equity shares. January 2006 Signed an
agreement with Khalil Public Welfare Trust for the operation and maintenance of Khyber Medical
Institute, Srinagar. March 2006 Acquired 99.99% of the paid up equity share capital of International
Hospital Limited resulting in the acquisition of Fortis Hospital, Noida. March 2006 Acquired 100.00%
of the paid up equity share capital of Oscar Bio-Tech Private Limited. 

2004

-Fortis inks deal with Jessa Ram Hospital to takeover the management of the hospital

2005

-Fortis Hospital rolls out Golden Age Club

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-Fortis buys Escorts Heart

-Fortis Healthcare signs $33.33m pre-IPO deals

The Company was incorporated on February 28, 1996 as Rancare Limited under the Companies Act.
Subsequently on June 20, 1996 our name was changed to our present name-Fortis Healthcare Limited.
The Company received the certificate of commencement of business on July 1, 1996.

2006

-Fortis Healthcare to buy majority stake in Trehan`s Medicity

-Fortis Healthcare signs $33.33m pre-IPO deals

2007

-Fortis HealthWorld has joined hands with US hearing aid maker Starkey for its Audible range and is
looking to soon offer dental services at its Health stores too.

-Colgate-Palmolive India, the market leader in toothpaste in India, declared the acquisition of three
domestic companies in south India recently. The company purchased 75 per cent equity in Advanced
Oral Care Products (Goa), Professional Oral Care Products (Goa) and SS Oral Hygiene Products
(Hyderabad).

-Fortis Healthcare acquires Hiranandani Hospital

2008

-Fortis Healthcare Ltd has informed that the Board of Directors of the Company at its meeting held on
January 23, 2008, inter alia, has approved change in registered office of the Company from "Piccadily
House, 275-276, 4th Floor, Captain Gaur Marg, Srinivas Puri, New Delhi - 110065" to "Escorts
Health Institute And Research Centre, Okhla Road, New Delhi - 110025".

2009

-Fortis completes Wockhardt Hospital Acquisition

-Fortis signs $15 mn outsourcing deal with HCL

-Fortis Healthcare Ltd Issues Rights in the Ratio of 2:5

2010

- 25% stake in Parkway holdings, Asia’s largest private healthcare provider.

- "Fortis Healthcare infuses USD 100 Million".

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- Fortis increases stake in Parkway.

- Government of Singapore Investment Corp (GIC) to join hands with Fortis at strategic level.

- Fortis Healthcare has entered into a pact with two hospitals in Dubai and Tanzania to set up
specialised medical facilities.

- Company has announced its foray into Speciality Medical Centres focused on the management of
diabetes, metabolic diseases and endocrinology.

2011

- A Memorandum of Understanding has been signed by Fortis Healthcare Ltd with the University of
Utah to develop courses for Emergency Medical Technicians.

- Through its wholly owned subsidiary, has entered into an agreement with Cauvery Hospital Limited,
Mysore, wherein Fortis will set up, operate and manage a Cardiac Centre in the hospital.

- The name of Fortis Healthcare Limited shall be changed to Fortis Healthcare (India) Limited w.e.f.
April 11, 2011.

- "Fortis Healthcare ties up with TotipotentRX to set up Stem Cell Therapy Centres".

- Fortis Healthcare (India) Ltd has announced that it will buy 86 per cent stake in Super Religare
Laboratories Ltd (SRL) .

- Fortis Healt - Fortis announces new hospitals in Hyderabad and Agra.

2012

- "Fortis to get Rs. 3700 Mn Equity infusion in SRL through IFC and NYLIM Jacob Ballas India".

- Fortis Healthcare raises around S$510 mn through Singapore IPO.

-Company has changed its name from Fortis Healthcare (India) Ltd. to Fortis Healthcare Ltd. 

2013 -"Fortis launches its Flagship Hospital, One of the First of its Kind in Asia Bridges the gap for
expert talent, trans-disciplinary, quaternary care". -"Fortis to divest stake in Quality Healthcare to
Bupa for US$ 355 million Intensifies Focus on Healthcare Delivery in India".

2014 -"Fortis launches state of the art, multi super-specialty hospital in Ludhiana".

2016 -Fortis Healthcare has fully acquired Religare Health Trust Trustee Manager for USD 14.9
million (about Rs 100 crore). -Fortis group gets CCI nod for internal reorganisation. -Fortis Healthcare
First in India to Monitor and Publish Clinical Outcomes for Cardiology. -Fortis Healthcare launches
National helpline for students and parents to help deal exam stress.

2017 -Fortis Healthcare Acquisition of Hiranandani Healthcare Private Limited,Fortis Healthcare

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Holdings Private Limited and RHC Holding Private Limited.

1.2 Type and Ownership Pattern:-

Holder's Name No of Shares % Share Holding

Promoters 3970870 0.77%

ForeignInstitutions 236678649 45.63%

FinancialInstitutions 90044323 17.36%

GeneralPublic 82375020 15.88%

Others 81994707 15.81%

NBanksMutualFunds 23593662 4.55%

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1.3 Organizational Structure:-

Name Designation

Bhavdeep Singh Chief Executive Officer

Gagandeep Singh Bedi Chief Financial Officer

Indrajit Banerjee Independent Director

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Malvinder Mohan Singh CEO

Rahul Ranjan Co. Secretary & Compl. Officer

Rahul Ranjan Secretary

Ravi Rajagopal Independent Director

Shradha Suri Marwah Non Executive Director

Suvalaxmi Chakraborty Independent Director

1.4 Service Layout

Fortis Healthcare Limited is a leading integrated healthcare delivery service provider in

India. The healthcare verticals of the company primarily comprise hospitals, diagnostics
and day care specialty facilities. Currently, the company operates its healthcare delivery
services in India, Dubai, Mauritius and Sri Lanka with 45 healthcare facilities (including
projects under development), approximately 10,000 potential beds and 314 diagnostic
centres.

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In a global study of the 30 most technologically advanced hospitals in the world, its
flagship, the Fortis Memorial Research Institute’ (FMRI), was ranked No.2, by
‘topmastersinhealthcare.com, and placed ahead of many other outstanding medical
institutions in the world.

Fortis Healthcare Limited is a leading integrated healthcare delivery service

provider in India. The healthcare verticals of the company primarily comprise
hospitals, diagnostics and day care specialty facilities.  

Currently the company operates its healthcare delivery services in India, Dubai,
Mauritius and Sri Lanka with 45 healthcare facilities (including projects under
development), approximately 10,000 potential beds and  over 330 diagnostic centres.

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In a global study of the 30 most technologically advanced hospitals in the world, its
flagship, the Fortis Memorial Research Institute’ (FMRI), was ranked No.2, by
‘topmastersinhealthcare.com, and placed ahead of many other outstanding medical
institutions in the world.

Fortis Memorial Research Institute

Fortis Memorial Research Institute (FMRI) is a multi-super-speciality, quaternary

care hospital with an enviable international faculty, reputed clinicians, including
super-sub-specialists and speciality nurses, supported by cutting–edge technology.

A premium referral hospital, it endeavours to be the 'Mecca of Healthcare' for Asia

Pacific and beyond. Set on a spacious 11-acre campus with 1000 beds, this 'Next
Generation Hospital' is built on the foundation of 'Trust' and rests on four strong pillars:
Talent, Technology, Service and Infrastructure

1.5:- Organizational Policies:-

Patient Centricity     

    Commit to 'best outcomes and experience' for our patients.

    Treat patients and their caregivers with compassion, care and understanding.
    Our patients' needs will come first

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Integrity     

    Be principled, open and honest..

    Model and live our 'Values'.
    Demonstrate moral courage to speak up and do the right things.

Teamwork     

    Proactively support each other and operate as one team.

    Respect and value people at all levels with different opinions, experiences and
backgrounds.
    Put organization needs' before department / self interest.

Ownership     

    Be responsible and take pride in our actions.

    Take initiative and go beyond the call of duty.
    Deliver commitment and agreement made.

Innovation     

    Continuously improve and innovate to exceed expectations.

    Adopt a 'can-do' attitude.
    Challenge ourselves to do things differently.

Over the years, Fortis Healthcare Ltd. through Fortis Charitable Foundation (FCF) and
its hospitals across India is committed towards providing healthcare for the socially
marginalized and deprived sections of the society. We not only make sure that our
programmes are efficient, but also ensure that they are sustainable and relevant to those
meant to benefit from them.

CSR at Fortis Healthcare Limited

The CSR initiatives are driven by our vision, philosophy and the need of the community,
with health remaining our main focus; we however, occasionally modify our programmes
to suit our intended beneficiaries. We also promote awareness and educational
programmes on preventive care and training people on several health related problems
including emergency care. We have approximately 300 employees volunteering in our

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CSR initiatives and community development and they are allowed to take out time from
their work schedule for these initiatives. The programs of Fortis Foundation are SEWA,
AANCHAL and SAVERA.

The organisation is committed to creating robust mechanisms to implement, record,

review and measure outcomes of the initiatives for the community at large. This not only
ensures the efficacy of our programmes but goes a long way in guaranteeing that they
continue to be significant, relevant and sustainable so that the beneficiaries derive
maximum benefit from our effort and equally importantly, we become proud of our
contributions to the community. There is a regular feedback from the Fortis hospitals
about running of the programmes and after appropriate review from time to time,
necessary modifications (if required) are made to better the programme. All CSR
initiatives are reported in the company’s annual report for information of our
stakeholders. We also have specific programs to protect the environment through our
work, like taking care of our biomedical waste, X-ray exposure, and so on which ensures
cleaner environment and safety for our patients, attendants and employees.

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2.1 Industrial Overview:-
The healthcare industry (also called the medical industry or health economy) is the
range of companies and non-profit organizations that provide medical services,
manufacture medical equipment, and developpharmaceuticals. It includes the generation
and commercialization of goods and services lending themselves to maintaining and re-
establishing health.[1] The modern healthcare industry is divided into many sectors and
depends on interdisciplinary teams of trained professionals and paraprofessionals to meet
health needs of individuals and populations.[2][3]

The healthcare industry is one of the world's largest and fastest-growing industries.
[4]
 Consuming over 10 percent of gross domestic product (GDP) of most developed
nations, health care can form an enormous part of a country's economy.

Health care in the United States is given by numerous different legitimate elements.
Current evaluations put US healthcare spending at around 15% of GDP, which is the
most astounding on the planet. The United States spends the most noteworthy level of
health care costs on pharmaceuticals on the planet. In the United States, around 85% of
residents have health protection, either through their manager or bought exclusively.

For purpose of finance and management, the healthcare industry is typically divided into
several areas. As a basic framework for defining the sector, the United
Nations International Standard Industrial Classification(ISIC) categorizes the healthcare
industry as generally consisting of:

1. Hospital activities;

2. Medical and dental practice activities;

3. "Other human health activities".

This third class involves activities of, or under the supervision of, nurses, midwives,
physiotherapists, scientific or diagnostic laboratories, pathology clinics, residential health
facilities, or other allied health professions, e.g. in the field of optometry, hydrotherapy,
medical massage, yoga therapy, music therapy, occupational therapy, speech therapy,
chiropody, homeopathy, chiropractic, acupuncture, etc.[5]

The Global Industry Classification Standard and the Industry Classification

Benchmark further distinguish the industry as two main groups:

1. healthcare equipment and services; and

2. pharmaceuticals, biotechnology and related life sciences.

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The healthcare equipment and services group consists of companies and entities that
provide medical equipment, medical supplies, and healthcare services, such as hospitals,
home healthcare providers, and nursing homes. The latter listed industry group includes
companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific
services.[6]

Other approaches to defining the scope of the healthcare industry tend to adopt a broader
definition, also including other key actions related to health, such as education and
training of health professionals, regulation and management of health services delivery,
provision of traditional and complementary medicines, and administration of health
insurance.

2.2: Current Issues

Fortis gains nearly 2% on KKR-backed Radiant Life's binding offer to
buy firm's Mulund hospital
Fortis Healthcare share price gained 1.6 percent intraday Wednesday after KKR-backed
Radiant Life Care made a revised bid for company with a binding offer to acquire its
Mulund hospital for an enterprise value of Rs 1,200 crore.

This is the second revised offer received by Fortis on Tuesday after Malaysian major IHH
Healthcare made a binding offer to infuse Rs 650 crore immediately in the Indian firm as
part of an overall proposal to invest Rs 4,000 crore.

The company has received a binding offer from Radiant Life Care, Fortis Healthcare
(FHL) said in a regulatory filing.

"In order to provide immediate liquidity to FHL, we would like to make a binding offer
to purchase Fortis Mulund hospital without due diligence and as a going concern at an
enterprise value of Rs 1,200 crore as the first step," Radiant said in its revised offer to
FHL.

Manipal-TPG sweetens bid for Fortis, raises value of hospital biz to Rs

6,322 crore

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The Manipal-TPG consortium on late Tuesday sweetened its bid for Fortis Healthcare by
valuing the latter’s hospital business at Rs 6,322 crore, an increase of Rs 261 crore as
compared to its earlier offer.

The consortium’s revised bid offered to invest Rs 750 crore upfront into the hospital
business to address immediate liquidity concerns.

To ensure certainty of the transaction, if approved by the Fortis Board, Manipal-TPG

have submitted a letter of intent for Rs 750 crore from ICICI Bank.

Manipal-TPG has proposed to demerge the hospital business of Fortis and merge it with
Manipal Hospitals.

Radiant makes binding offer to buy Fortis Mulund hospital for Rs 1,200
cr
KKR-backed Radiant Life Care today made a revised bid for Fortis Healthcare Ltd (FHL)
with a binding offer to acquire its Mulund hospital for an enterprise value of Rs 1,200
crore.

This is the second revised offer received by Fortis today after Malaysian major IHH
Healthcare made a binding offer to infuse Rs 650 crore immediately in the Indian firm as
part of an overall proposal to invest Rs 4,000 crore.

The company has received a binding offer from Radiant Life Care, FHL said in a
regulatory filing.

"In order to provide immediate liquidity to FHL, we would like to make a binding offer
to purchase Fortis Mulund hospital without due diligence and as a going concern at an
enterprise value of Rs 1,200 crore as the first step," Radiant said in its revised offer to
FHL.

2.3: Key-Competitors
Name Last Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover

Fortis Hospital 1,088.25 15,140.30 6,441.77 285.15 6,247.82

Narayana Hruda 269.65 5,510.59 1,645.91 95.11 1,107.10

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Thyrocare Techn 684.10 3,675.23 300.06 74.85 418.27

Healthcare Glob 300.60 2,639.69 538.78 23.52 658.73

Shalby 214.15 2,313.03 324.00 63.26 -

Poly Medicure 253.35 2,235.23 439.78 53.39 338.23

Kovai Medical 641.65 702.11 525.62 59.78 319.74

Indraprastha 49.30 451.95 765.72 26.25 295.63

Opto Circuits 10.25 294.68 50.38 -364.04 1,598.26

Lotus Eye Care 30.00 62.39 33.96 0.43 49.55

2.4: Environmental Scanning(PESTEL analysis)

Political Factors: Government Subsidies

The healthcare industry is impacted by many factors including, insurance mandates, tax

legislation changes, and consumer protection. Government spending for healthcare can be
affected by tax policy changes. It can be a benefit, allowing for increased subsidies. Or it
can be a cause for concern. Governmental changes can affect the public and the
healthcare services they’re entitled to, especially with changing healthcare bills and
plans.

Economic Factors: Loss of Services

Healthcare organizations will be affected by many economic factors, especially inflation,

unemployment, and interest rates. Any of these changes can change how the public is
able to spend their money, impacting policy spending. Companies who manufacture
medical devices won’t have many people able to pay their rate if the unemployment rate
is increased. Likewise, if less people are able to work, they won’t qualify for work
benefits, including healthcare.
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For people without these benefits, it’s likely they won’t be able to pay the entire cost of
any hospital or emergency room visit. They’re less likely to seek help when they become
ill. The public will have a limited selected of health services they can actually afford.

Social Factors: Changes in Beliefs

Healthcare relies on understanding the changes in demographics and public values.

Certain communities can share fears, beliefs, and cultural norms. If a healthcare
professional or hospital isn’t aware of these conditions while they treat that public, it can
cause problems. Additionally, medical professionals need to stay on their toes about new
trends.

For example, the use of essential oils as a cure for various illnesses including cases of flu,
fevers, and even incurable conditions like autism, are on the rise. Understanding why
people are turning to these natural remedies can help healthcare professionals talk and
discuss concerns or treatment with these users.

Another example is the new trend of eating detergent pods. Understanding why kids are
turning to such dangerous activities can help prepare clinics if they children need
assistance at their location.

People are also becoming more health conscious. Some business across the country must
now post the calorie amount of each item on their menu, giving people the option to
choose what to eat based on these numbers.

The public, in general, is turning towards specific health diets including paleo and keto.
Or they’re making changes, like eating less f artificial sugars and processed chemicals.
This is in response to the growing threat of obesity in adults and children. Hospitals and
health professionals can benefit from following these shifting and progressive trends.

Technological Factors:

The healthcare industry is seeing positive changes in treatments because of technological

advancements. Developments with medical devices allow patients to receive better care.
For example, hearing aid devices have the tools to enhance performance, providing
crystal clear sound, less background noise, and premium options for a better hearing
experience.

We’re seeing changes in app developments, allowing patients to get care faster than ever
before. More businesses are using apps to connect doctors with patients right in their
homes. And the ability to ask questions about illnesses now include email and live-chat
on websites. We’re heading towards a positive direction for patient care thanks to our
ever-evolving technology.

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2.5:Porters five forces model of competition

Threats of New Entrants

New entrants in Health Care Equipment & Services brings innovation, new ways of
doing things and put pressure on Fortis Healthcare Limited (FHL) through lower pricing
strategy, reducing  costs, and providing new value propositions to the patients. Fortis
Healthcare Limited (FHL) has to manage all these challenges and build effective barriers
to safeguard its competitive edge.

How Fortis Healthcare Limited (FHL) can tackle the Threats of New Entrants

 By innovating new products and services. New products not only brings new
patients to the fold but also give old customer a reason to buy Fortis Healthcare
Limited (FHL) ‘s products.

 By building economies of scale so that it can lower the fixed cost per unit. 

 Building capacities and spending money on research and development. New

entrants are less likely to enter a dynamic industry where the established players

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 such as Fortis Healthcare Limited (FHL) keep defining the standards regularly. It
significantly reduces the window of extraordinary profits for the new firms thus
discourage new players in the industry.

Bargaining Power of Suppliers

All most all the companies in the Health Care Equipment & Services industry buy their
raw material from numerous suppliers. Suppliers in dominant position can decrease the
margins Fortis Healthcare Limited (FHL) can earn in the market. Powerful suppliers in
Health Care Equipment & Services sector use their negotiating power to extract higher
prices from the firms in Health Care Equipment & Services field. The overall impact of
higher supplier bargaining power is that it lowers the overall profitability of Health Care
Equipment & Services. 

How Fortis Healthcare Limited (FHL) can tackle Bargaining Power of the Suppliers

 By building efficient supply chain with multiple suppliers.

 By experimenting with product designs using different materials so that if the

prices go up of one raw material then company can shift to another.

 Developing dedicated suppliers whose business depends upon the firm. One of the
lessons Fortis Healthcare Limited (FHL) can learn from Wal-Mart and Nike is
how these companies developed third party manufacturers whose business solely
depends on them thus creating a scenario where these third party manufacturers
have significantly less bargaining power compare to Wal-Mart and Nike.

Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by
paying the minimum price as possible. This put pressure on Fortis Healthcare Limited
(FHL) profitability in the long run. The smaller and more powerful the customer base is
of Fortis Healthcare Limited (FHL) the higher the bargaining power of the patients and
higher their ability to seek increasing discounts and offers. 

How Fortis Healthcare Limited (FHL) can tackle the Bargaining Power of Buyers

 By building a large base of patients. This will be helpful in two ways. It will
reduce the bargaining power of the buyers plus it will provide an opportunity to
the firm to streamline its sales and production process.

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  By rapidly innovating new products. patients often seek discounts and offerings
on established products so if Fortis Healthcare Limited (FHL) keep on coming up
with new products then it can limit the bargaining power of buyers.

 New products will also reduce the defection of existing patients of Fortis
Healthcare Limited (FHL) to its competitors.

Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways,
industry profitability suffers. For example services like Dropbox and Google Drive are
substitute to storage hardware drives. The threat of a substitute product or service is high
if it offers a value proposition that is uniquely different from present offerings of the
industry.

How Fortis Healthcare Limited (FHL) can tackle the Treat of Substitute Products /
Services

 By being service oriented rather than just product oriented.

 By understanding the core need of the customer rather than what the customer is
buying.

 By increasing the switching cost for the patients.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down
prices and decrease the overall profitability of the industry. Fortis Healthcare Limited
(FHL) operates in a very competitive Health Care Equipment & Services industry. This
competition does take toll on the overall long term profitability of the organization. 

How Fortis Healthcare Limited (FHL) can tackle Intense Rivalry among the
Existing Competitors in Health Care Equipment & Services industry

 By building a sustainable differentiation

 By building scale so that it can compete better

 Collaborating with competitors to increase the market size rather than just
competing for small market.

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27
3.1 Products
Telemedicine
 Fortis Healthcare has built a tele-medicine network, which connects each of its facilities,
soexpert care is never out of reach. In addition, Fortis Healthcare facilities are also
workingwith both private and public partners in the Indian Healthcare industry to provide
SuperSpeciality and quality healthcare services.Fortis Healthcare provides services
covering ICU Management, ER Management, OPDManagement, Radiology Reporting,
Pathology Reporting as well as Training and EducationOpportunities.Utilising strong HIS
backbone, and PACS technology, Fortis is able to seamlessly transmitpatient information
in a secure and confidential environment. The use of tele-medicine hasprovided a much-
needed boost to the Indian Healthcare sector. It has also allowed theirnetwork to expand
its presence by extending quality healthcare treatment to the remoteareas of Northern
India as well as overseas.

The services that Fortis provide are in two fold:

Diagnostic and Non-Diagnostic Services :

 Preliminary or Final interpretations for
 Nighthawk services
 ER coverage

Second Opinions
 Confirmation Consults
 Sub-speciality services
 Processing, Rendering and Transcription Services

Detailed Services

 ICU Service
 Thrombolysis
 Decisions for Cardioversion and emergency ECG administration and
interpretation
 Medical Rounds
 Acute management of Myocardial Infarction and other medical emergencies
 Emergency Activities :

28
  Immediate Intervention Advice
 Emergency Consultations

Outpatient Activities :

 Marketing Management Project

 Fortis Healthcare Limited
 Video Consultations
 Psychology Consults
 Outreach programmes
 Health Camps

Radiology Activities :

 CT Scans
 MRI
 Ultra Sounds
 X-Ray
 Nuclear Medicine Studies
 Any Digitized Image

3.2. Seven P’s (Product, Price, Place, Promotion, People,

Physical Evidence, Process)
Product:

Fortis Healthcare and hospitals are one of the most well equipped medical centres,
hospitals etc which are spread across India. Fortis healthcare offers excellent medical
services in its marketing mix in several key areas including complex organ transplant
surgeries, Orthopedics, Mother and child health, Oncology, Cardiac Sciences etc. It
operates 45 healthcare facilities across several locations with approximately 10000
potential beds and 314 diagnostic centers and several pharmacies. Fortis offers highly
complex and innovative medical procedures with consistent outcomes as it employs
highly experienced and skilled doctors and has been using precision robotic surgeries to
reduce the recovery time and enhance the patient experience. Fortis hospitals are also
recognized by international agencies such as Joint Commission International, USA and
National Accreditation Board for Hospitals& Healthcare Providers, India which have
helped it gain considerable international visibility in terms of its quality of healthcare for
medical tourism.

29
Price:

Fortis healthcare is considered as a premium healthcare service provider as it competes in

the same segment as that of Fortis hospitals and Max hospitals with its offerings
focusing on patient experience by including world-class healthcare services and new
technology to justify its higher pricing. It also has several alliances with international
partners such as Aetna, Bupa, GMC services etc. for providing quality services.

Place:

Fortis operates its hospitals across several tier 1 and Tier 2 cities in India such as Delhi,
Amritsar, Kolkata, Mumbai, Mohali, Ludhiana, Jaipur, Chennai, Kota, Bengaluru,
Gurgaon, Noida, Faridabad, and Odisha. Its head office is situated in Unitech Business
park in Gurgaon, Haryana. Fortis also offers skype consultation with doctors to its
patients regarding various procedures and surgeries as well. Further it also has a medical
Kiosk setup at Indira Gandhi International Airport. Further Fortis has a dedicated website
to provide key information about its hospitals and practices to various patients and
provides easy accessibility to them.

Promotion:

Fortis promotes its services through traditional as well as digital media with newspaper
adverts, medical periodicals, YouTube and TV adverts. It has launched several awareness
campaigns to urge people to take control of their health such as NDTV-Fortis Health4U
campaign and spread cancer awareness campaigns with its most recent campaign
focusing on urging people for organ donation for needful patients. It spreads brand
awareness through these campaign as well as celebrity endorsements.

Since this is a service marketing brand, here are the other three Ps to make it the 7Ps
marketing mix of Fortis Healthcare & Hospitals

People:

As the service provided by Fortis is high contact service with high credence attribute, it
employs highly skilled doctors and staff consisting of administrators, ward boys, nurses,
pharmacists, etc. to run theses chain of hospitals. Further it offers academic sponsorship

30
to its employees to share their academic work in national and international conferences
and offers incentives and rewards for publishing their articles in medical journals.

Physical Evidence:

Fortis’ biggest physical evidence are its hospitals. As the healthcare services are high
contact, the Physical Evidence plays a major role for it as both service operations as well
as service delivery both visible to the patients. Fortis uses advanced healthcare
management systems for providing patient care services. The hospitals have won many
accolades to prove their success. They have standardized facilitating services which are
offered in each hospital such as reception, waiting area, cafeteria, etc. Further it offers
specialized rooms such as ICU, baby care, emergency wards etc.

Process:

Fortis hospitals have been adopting new technological advancements in their hospitals.
The potential patients can visit the Fortis website and can take an appointment for
consultation or plan their medical trip through it. They can also consult doctors online
through skype. Further, the hospitals have reception and casualty wards through which
the patient get admitted in the hospital. All the medical records are updated through their
healthcare management system. Hence this completes the marketing mix of Fortis
Healthcare & Hospitals.

3.3:- STP (Segmenting Targeting and Positioning)

Segmenting

Segmenting hospitals used to be easy. First, segment them by their purpose in the
community: general hospitals, specialty hospitals and research hospitals. Second,
segment them based on legal entity: non-profit vs. for-profit vs. government-owned.
Third, segment them by size, counting the number of sites, beds, and patients discharged.
The American Hospital Association and third-party data companies made this even easier
by publishing ongoing updates, such as that in Figure 1 below.

Sales Potential Segments.Go one step further and you could calculate sales potential
based on the number of procedures a given hospital or network performed involving your
product, and multiplying the procedures by a factor of product usage and price. With

31
readily available third-party procedure data you had yourself a pretty good sales potential
model at the account level. You could see market share and trends clearly. The savvy
marketer placed every hospital in a unique segment, sales management sized the
salesforce and territories to optimize coverage of account potential, and sellers targeted
each segment with unique messages based on share and potential.

The Ground Shifts. The rapid growth of networks through M&A and affiliations shifted
the ground beneath the feet of device marketers. Now hospital networks look more like
corporate enterprises than old hospital segments. Segment marketers increasingly must
consider how a network is structured and, more importantly, how the network wants to
look in the future. For example, some networks remain on an acquisition binge, but most
have settled down into a period of consolidating what they’ve already assembled.
Becker’s Hospital Review reveals that hospital M&A announcements and deal volume
declinedsubstantially 

Targeting

Targeting in the Field. What does this mean to sellers in the field? Most medical device
sales reps target doctors not hospitals, let alone networks. For years, sales reps
successfully targeted doctors based on their specialty, sub-specialty and openness to new
technology. Since most doctors have become hospital employees and are no longer
independent decision makers, they’ve become far less important targets.  More important
are hospital Value Analysis Committees (VACs) — the cross-functional teams made up
of hospital administration, purchasing, materials management, finance, and medical staff.
VACs dominate device conversion sales decisions. Thus VAC behavior is an important
sales factor and should be used to confirm or reprioritize targets.

Fortis Healthcare and Targeting. As Fortis Healthcare drives hospitals from fee-for-
service to pay-for-performance, the VAC helps chart the course. Fortis Healthcare
creates two paths, with hospitals receiving reimbursement incentives for (a) reducing
costs; and/or (b) improving quality and patient experience. Most VACs went down the
near-term cost reduction path first (see blog post, “Show Me the Value,” December 17,
2012). To be sure, every device vendor fits into a hospital’s cost reduction or quality
improvement plan, whether they know it or not.

Positioning

 In marketing and business strategy, marketposition refers to the consumer’s perception

of a brand or product in relation to competing brands or products. Market positioning
refers to the process of establishing the image or identity of a brand or product so that
consumers perceive it in a certain way.

32
For example, a car maker may position itself as a luxury status symbol. Whereas a battery
maker may position its batteries as the most reliable and long-lasting. And a fast-food
restaurant chain may position itself as a provider of cheap and quick standardized meals.
A coffee company may position itself as a source of premium upscale coffee beverages.
Then a retailer might position itself as a place to buy household necessities at low prices.
And a computer company may position itself as offering hip, innovative, and use-
friendly technology products. Positioning creates a comparative picture in the mind of the
prospective customer. It uses benefit and product class positioning strategy.

3.4:- Distribution Channels

Distribution of services in Fortis Hospital

Place or distribution mix in Fortis hospital can be described in terms of physical access
of the Fortis hospital, time access, informational and promotional access of the hospital.
In Fortis physical access comprises the channels which the hospital using for distributing
the health services. Location of the Fortis hospital includes the branches or outlets to
operate, size, where located and what are the specialization at each branch they are
offering etc, and designing of the facilities. Fortis is utilizing different channels for
delivery of health services to the needy.

In Fortis the patients now can get the surgery on an inpatient or out-patient basis or in
free- standing one-day surgery centers. Fortis offering house visits in some areas where
an oversupply of physicians motivates a higher level of service to the patients. Fortis
changing channels in obstetrics, some which are not clinically accepted, have moved the
birth process out of traditional labor and delivery rooms in to hospital-based alternative
birth centers and on occasion in to the home. The channels using by the Fortis for health
services promotion and early disease The channels using by the Fortis for health services
promotion and early disease detection have also expanding rapidly. For this Fortis
displaying food charts that used to hang in every elementary school class rooms in the
Hyderabad city, computerized health information in public libraries, health education
CDs sold to the patients and tele- medicine services covering every conceivable aspect of
the health care including suicide hotlines, elder hotlines and sexplanations etc. Following
table shows the Telemedicines service of the Fortis hospital.

33
OUTLETS

 Fortis Hospital, Ludhiana

6kms from Samrala Chowk, Chandigarh Road, Ludhiana, Punjab

0161-5222222

 Fortis Escorts Hospital, Amritsar

Majitha-Verka Bypass Road, Amritsar - 143004, Punjab

9915133330

 Fortis Escorts Heart Institute, Okhla Road

Okhla Road, Opp Holy Family Hospital, New Delhi, Delhi 110025

 Fortis Flt. Lt. Rajan Dhall Hospital, Vasant Kunj

Sector B, Pocket 1, Aruna Asaf Ali Marg,Vasant Kunj, New Delhi - 110070

3.5:- Promotion Strategy

Promotion of Fortis in the first few months of setting up where not in the front end
theywere more into putting things at place before going on the full throttle with the
promotionof the health care services that they where providing.

Once the management was sure that the offerings from their side where all up to the
markthe company went into extensive promotions starting from promotion vans that
where setup, to extensive ads and hoarding. The promotional strategy also included many
free clinicsfor the poor and also in the rural areas in the NCR region in the first few years
when theywere concentrating for growth in the NCR region.

Once the company settled its market up in the NCR region it created a buzz in the
othermetros in this regards. They organised many road shows, awareness weeks. The
hospitalcame into the eyes of the general public after it was shown in the blockbuster
Bollywood movie “3 Idiots”.The movie provided the hospital-chain with a platform to
come into theeyes of the general masses all over the country. And the spill over effect of

34
this being thethat the chain of multi-speciality hospital under the banner of Fortis opening
up in all theTier I cities and some of the Tier II cities also. In some of the Tier II cities in
order to come upwith its brand it has stated up with small clinics and centres in
association with some localhospitals so that they may in future come up with their
hospitals here.

In order to expand their market they went into the acquiring the Escots, Park-Way
andMalar group of hospitals, thus putting up their reach to many more people. The
organisationin order to increase its reach to foreign patients they started operations in
Mauritius.

The organisation tied up with many companies and offices to provide them with the
healthcards to its employees so that the employees can be treated on No-cash basis. By
thisstrategy the organisation made a high amount of customer base and also in this
processretained many a consumers.

The Fortis Healthcare group has set up a low cost hospital in Mohali to facilitate the non-
urban poor in the region. They have opened many free health camps and free health
check-up days in their hospitals also to increase the customer base. They celebrate days
such asWorld Cancer Day and World Osteoporosis Day in order to bring awareness
among theirpatients. During these days they give discounts on the services provided and
thus adding onto its already existing promotions.

Fortis had in 2008 held an International Conference on Breakthrough in Oncology via

whichit was able to promote the hospitals in the international arena where in India has
alreadyclaimed a place due to its cheap medical costs.

35
36
4.1 Sources of Finance:-

Total Shares Shares pledged or

held otherwise encumbered

As a As a %
No % of of
Name of the Shareholder % of
. grand grand
Total
Number total Number total
shares
(A) + (A) +
held
(B) + (B) +
(C) (C)

1 Malvinder Mohan Singh 11,508 0 - - -

FORTIS HEALTHCARE
3,420,45 689,08
2 HOLDINGS PRIVATE 0.66 20.15 -
1 4
LIMITED

MALAV HOLDINGS
3 240,750 0.05 - - -
PRIVATE LIMITED

MALVINDER MOHAN
4 100 0 - - -
SINGH - TRUST

5 Shivinder Mohan Singh 11,508 0 - - -

RHC HOLDING PRIVATE

6 218,250 0.04 - - -
LIMITED

7 Harpal Singh 58,003 0.01 - - -

8 Abhishek Singh 10,300 0 - - -

37
4.2 Ratio Analysis:-
Key Financial Ratios of Fortis
------------------- in Rs. Cr. -------------------
Healthcare

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

Per Share Ratios

Basic EPS (Rs.) -1.57 -1.59 -0.73 0.53 0.43
Diluted EPS (Rs.) -1.57 -1.59 -0.73 0.53 0.43
Cash EPS (Rs.) -0.93 -1.04 -0.15 0.89 1.00
Book Value 82.51 77.91 79.50 80.16 78.99
[ExclRevalReserve]/Share
(Rs.)
Book Value 82.51 77.91 79.50 80.16 78.99
[InclRevalReserve]/Share
(Rs.)
Revenue from 12.46 13.21 13.19 7.97 8.71
Operations/Share (Rs.)
PBDIT/Share (Rs.) 0.44 0.63 1.50 3.22 4.67
PBIT/Share (Rs.) -0.08 0.09 0.91 2.86 4.10
PBT/Share (Rs.) -2.20 -1.59 -0.78 0.90 0.79
Net Profit/Share (Rs.) -1.44 -1.59 -0.73 0.52 0.43
Profitability Ratios
PBDIT Margin (%) 3.51 4.80 11.33 40.44 53.66

38
PBIT Margin (%) -0.61 0.64 6.89 35.83 47.01
PBT Margin (%) -17.67 -12.01 -5.87 11.23 9.08

Net Profit Margin (%) -11.57 -12.01 -5.55 6.50 4.88

Return on Networth / -1.74 -2.03 -0.92 0.64 0.53

Equity (%)
Return on Capital -1.67 -1.72 -0.78 0.47 0.43
Employed (%)
Return on Assets (%) -1.44 -1.49 -0.65 0.46 0.38

Total Debt/Equity (X) 0.15 0.29 0.16 0.34 0.31

Asset Turnover Ratio (%) 12.49 12.45 11.83 7.15 7.88

Liquidity Ratios

Current Ratio (X) 0.49 1.85 2.36 13.86 2.12

Quick Ratio (X) 0.48 1.84 2.35 13.83 2.11

Inventory Turnover Ratio 115.60 104.95 84.38 78.22 72.80

(X)
Earnings Retention Ratio 0.00 0.00 0.00 100.00 100.00
(%)
Cash Earnings Retention 0.00 0.00 0.00 100.00 100.00
Ratio (%)
Valuation Ratios

Enterprise Value (Cr.) 9,943.4 9,160.9 8,206.5 5,751.4 4,941.7

5 1 0 2 7
EV/Net Operating 15.41 14.98 13.44 15.59 14.00
Revenue (X)
EV/EBITDA (X) 438.60 311.73 118.53 38.55 26.09

MarketCap/Net Operating 14.45 13.29 12.47 12.27 11.47

Revenue (X)

39
Retention Ratios (%) 0.00 0.00 0.00 100.00 100.00

Price/BV (X) 2.18 2.25 2.07 1.22 1.26

Price/Net Operating 14.45 13.29 12.47 12.27 11.47

Revenue
Earnings Yield -0.01 -0.01 0.00 0.01 0.00

4.3 Net profit or Net balance sheet

Balance Sheet of Fortis Healthcare ------------------- in Rs. Cr. -------------------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 517.73 463.13 462.81 462.79 405.21
Preference Share Capital 0.00 0.00 0.00 0.00 4.33
Total Share Capital 517.73 463.13 462.81 462.79 409.53
Reserves and Surplus 3,754.1 3,145.14 3,216.7 3,246.8 2,795.5
4 0 0 2
Total Reserves and Surplus 3,754.1 3,145.14 3,216.7 3,246.8 2,795.5
4 0 0 2
Total Shareholders Funds 4,271.8 3,608.27 3,679.5 3,709.5 3,205.0
6 1 8 5
NON-CURRENT LIABILITIES
Long Term Borrowings 183.11 615.72 597.33 1,251.6 697.43

40
 6
Deferred Tax Liabilities 0.00 0.00 0.00 0.00 0.32
[Net]
Other Long Term Liabilities 0.00 23.93 23.36 33.43 15.27
Long Term Provisions 10.37 12.67 11.41 8.09 7.04
Total Non-Current 193.48 652.33 632.10 1,293.1 720.06
Liabilities 8
CURRENT LIABILITIES
Short Term Borrowings 441.75 428.82 0.00 0.00 300.56
Trade Payables 140.25 116.04 96.94 51.03 47.34
Other Current Liabilities 100.66 91.55 738.44 96.55 197.58
Short Term Provisions 12.96 12.37 12.22 9.19 7.66
Total Current Liabilities 695.62 648.78 847.59 156.77 553.15
Total Capital And Liabilities 5,160.9 4,909.37 5,159.2 5,159.5 4,478.2
6 0 3 6
ASSETS
NON-CURRENT ASSETS
Tangible Assets 141.82 126.57 144.34 139.32 114.55
Intangible Assets 43.80 45.12 45.78 6.83 3.04
Capital Work-In-Progress 192.60 177.54 169.00 121.35 72.94
Intangible Assets Under 6.40 0.00 0.00 0.00 0.00
Development
Fixed Assets 384.62 349.23 359.12 267.50 190.53
Non-Current Investments 3,602.6 2,415.50 2,102.7 2,102.6 2,102.6
7 3 8 8
Deferred Tax Assets [Net] 67.00 0.00 0.00 0.20 0.00
Long Term Loans And 697.97 906.38 640.91 593.22 838.75
Advances
Other Non-Current Assets 71.24 36.94 57.00 23.79 174.28

41
Total Non-Current Assets 4,823.5 3,708.05 3,159.7 2,987.3 3,306.2
1 6 9 5
CURRENT ASSETS

Current Investments 0.00 220.00 308.40 692.46 303.20

Inventories 5.58 5.83 7.24 4.72 4.85

Trade Receivables 75.54 102.34 105.06 87.29 93.05

Cash And Cash Equivalents 5.69 9.25 6.29 26.29 108.58

Short Term Loans And 74.70 712.21 1,360.0 1,163.6 650.35

Advances 6 4
OtherCurrentAssets 175.93 151.70 212.40 197.73 11.99

Total Current Assets 337.46 1,201.32 1,999.4 2,172.1 1,172.0

5 4 2
Total Assets 5,160.9 4,909.37 5,159.2 5,159.5 4,478.2
6 0 3 6
OTHER ADDITIONAL
INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS

Contingent Liabilities 1,860.3 614.71 548.97 709.59 2,938.2

5 4
CIF VALUE OF IMPORTS

Capital Goods 0.00 8.50 5.00 30.27 5.88

EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign 0.00 39.70 66.87 60.06 43.52
Currency
REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS

Dividend Remittance In - - - - -
Foreign Currency

42
EARNINGS IN FOREIGN
EXCHANGE
FOB Value Of Goods - - - - -

Other Earnings - 54.97 51.51 48.83 24.85

BONUS DETAILS

Bonus Equity Share Capital - - - - -

NON-CURRENT INVESTMENTS

Non-Current Investments - - - - -
Quoted Market Value

Non-Current Investments 3,602.6 2,415.50 2,102.7 2,102.6 2,102.6

Unquoted Book Value 7 3 8 8

CURRENT INVESTMENTS

Current Investments Quoted - - - - -

Market Value
Current Investments - 220.00 308.40 692.46 303.20
Unquoted Book Value

43
44
5.1:- Performance Analysis of the company

Performance Ratios:

   ROA(%) -1.48 -0.79

   ROE(%) -1.87 -1.08

   ROCE(%) -0.16 0.32

5.2:- Reasons for the expansion/ Contraction or diversification

of the company
Fortis Healthcare on Tuesday sought 15-day extension to declare Q2 and Q3
earnings results. It said the auditor wouldn't be able to complete the auditing process
before the stipulated board meeting. Earlier, the company claimed to release the quarterly
results in its board meeting on February 13. In a regulatory filing, Fortis Healthcare said
Tuesday's board meeting would consider the resignation of its promoters and Fortis
founders Malvinder Mohan Singh and Shivinder Mohan Singh.
Fortis statement said that apart from paying Rs 65.98 lakh fine to stock exchanges for
"non-submission of un-audited financial results", the reports emerging in the media had
"enhanced the scope of limited review audit by the statutory auditors for the quarters
ended September 30, 2017, and December 31, 2017." The company added: "We

45
acknowledge and consider it just and equitable in the interest of governance and investors
at large".
"While the normal audit process was going on smoothly, after the aforesaid news items,
our interaction with auditors indicates that the audit process may not complete before the
stipulated date of the board meeting," it said.
Market regulator Sebi on February 10 said it was probing the controversy surrounding
group firms of Fortis Healthcare. The controversy pertains to a report published in
Bloomberg last week that alleged regulatory lapses in the transfer of funds from Fortis
Healthcare to some promoter-linked companies. "We are examining the Fortis issue,"
Sebi Chairman Ajay Tyagi told mediapersons on February 10, adding that "...we also
received a reference on Religare from somewhere I can't disclose, and it will be looked
into." Religare Enterprise, which is a diversified financial services group, and Fortis
Healthcare have the same promoter groups.
Tyagi's statement came a day after media reports alleged that the Singh bothers took Rs
473 crore from their publiclly listed company, Fortis Healthcare, about a year ago
without the board approval. The funds were mentioned as cash-and-cash equivalents in
the company balance sheets but were allegedly routed to the Singh brothers. Refuting the
allegations, Fortis said it deployed funds in secured short-term investments with
companies in normal course of treasury operations. The company release to the regulator
termed it "loan", claiming they were fully "secured", and being repaid.
The duo quit as directors from the company's board on February 8, days after the Delhi
High Court order upheld the Rs 3,500 crore arbitral award in favour of Japanese drug
maker Daiichi Sankyo. In a statement, the company said the resignation is "intended to
free the organisation from any encumbrances that may be linked to the promoters in light
of the recent HC judgement".
Earlier, it was also said that Fortis's auditor, Deloitte Haskins & Sells LLP, had refused to
sign off the Q2 results until the funds were accounted for or returned, but Fortis
Healthcare denied the allegations saying "the limited review process for Q2 and Q3
results is in progress".
Individually, Malvinder Mohan Singh and Shivinder Mohan Singh held 11,508 shares
each in Fortis Healthcare Ltd as on December 31, 2017, out of total 51,86,17,631 shares
of the company. Besides, the company has been caught up in several controversies
surrounding its finances and court case involving arbitral award.

5.3:- Comment on Organization Leadership

Fortis Healthcare Limited is a leading integrated healthcare delivery service provider in
India. Itstarted its journey with the first hospital in 2001 in North India and during the
course of 15 years has grown to become a leading chain of super specialty hospitals in
India with presence in day care specialty, diagnostics, and tertiary and quaternary care.

46
The healthcare company is a high quality tertiary player levered to the high‐potential of
the national capital region (NCR) and North India market. These include the world
renowned Escorts Heart Institute and the erstwhile Wockhardt facilities. Its flagship, the
Fortis Memorial Research Institute (FMRI), Gurugram, has become a landmark in the
region for its exceptional clinical services and patient care. Presently, as of 2016, the
business operates its healthcare delivery services in India, Dubai, Mauritius and Sri
Lanka with 45 healthcare facilities including projects under development, approximately
4,600 operational beds and over 9,000 potential beds.

In India, the company is one of the largest private healthcare chains comprising a
network of 42 healthcare facilities, including 30 operating facilities, six satellite and
command centres located in public and private hospitals and six healthcare facility
projects which are under development or are green-field land sites.

Fortis’s diagnostics business, SRL, has a presence in over 600 cities and towns, with an
established strength of 314 diagnostic centres including 161 self‐operated laboratories,
108 laboratories inside hospitals, including 27 labs located in Fortis’s healthcare
facilities, 18 wellness centres and three international laboratories. It also has over 7,200
collection points, which include 98 collection centers that are owned and 61 collection
centres at international locations.

In 2016, Fortis healthcare had acquired 51 per cent economic interest in Fortis Hospital
Limited (FHTL), a subsidiary of the Religare Health Trust (RHT). EBITDA grew 38 per
cent, benefiting from lower business transaction fee post the FHTL transaction.

The healthcare rebounded with good numbers in 2018 first quarter post demonetisation
impacts in the last quarter of fiscal 2017. Revenue and EBITDA grew by 3 per cent and
38 per cent, respectively. Over all, the metrics have been broadly in line with the
performance. Price control on stents was absorbed and business was back to normal. For
the quarter, EBITDAC margin is 13.3 per cent and the management believes the margin
will expand to 16 per cent by year end.

The management has given its guidance for fiscal 2018 revenue growth to be high single
to double digit; it believes that growth trajectory will improve to double digit in the
second half of the year.

In the last one quarter, stock has corrected by 25 per cent hit by leverage issue at
promoter’s end. At the current market price of Rs 166, the healthcare is now trading at
13.4 times its expected 2019 EBITDAC versus average sector multiple of 18 times and it
is forecasted that hospital revenue CAGR of 11 per cent will drive to 18 per cent
EBITDAC CAGR over the period 2017-19. The free cash flow generation from 2019
onwards will lead to re‐rating.

47
Focus on asset light expansion, improvement in operating metrics

Fortis’s focus is on asset‐light brown-field expansion and sweating its assets to improve
operating metrics. They reiterated focus on brown‐field expansion, cost management and
clinical excellence, hinging on which it expects to improve hospitals’ EBITDA margin to
20 per cent.

5.4:- Market Share / Growth Rate of the company

Name Market Market Cap. Sales Net Profit Total Assets
Share (Rs. cr.) Turnover

Apollo Hospital 29.48% 15,140.30 6,441.77 285.15 6,247.82

Fortis Health 4.14% 7,917.30 645.12 -74.72 4,896.73

Narayana Hruda 7.31% 5,510.59 1,645.91 95.11 1,107.10

Thyrocare Techn 18.53% 3,675.23 300.06 74.85 418.27

Healthcare Glob 8.13% 2,639.69 538.78 23.52 658.73

Shalby 5.79% 2,313.03 324.00 63.26 -

Poly Medicure 6.85% 2,235.23 439.78 53.39 338.23

Kovai Medical 17.37% 702.11 525.62 59.78 319.74

Indraprastha 1.32% 451.95 765.72 26.25 295.63

Opto Circuits 0.27% 294.68 50.38 -364.04 1,598.26

Lotus Eye Care 0.81% 62.39 33.96 0.43 49.55

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5.5:- SWOT Analysis of the company
Strengths in the SWOT analysis of Fortis :
Strengths are defined as what each business does best in its gamut of operations which
can give it an upper hand over its competitors. The following are the strengths of Fortis
Healthcare Limited:

 Focus on continuous improvement: The Fortis Hospitals Group looks at

services across various specialty areas in medicine and the healthcare provider
focuses on continuous improvement in all aspects of its services giving paramount
importance to research and development.

 Well trained and qualified professionals: Fortis has a very good system for
recruitment and selection and it takes all possible steps to ensure that doctors who
work with them are the best in their disciplines. Their support staff like the nurses,
pharmacists, lab staff and others are also highly qualified. The hospital gives
importance to training and offers regular training sessions to all its employees.

 Patient care: Fortis understands the importance of patient care and right from the
design of its facilities such as emergency, trauma care and even entry and exit to,
doctors and support staff and specialized and advanced services the need of the
patient is considered and given maximum attention.Patients are made comfortable
at every instant and all staff is asked to display high levels of sensitivity.

 Quality Accreditations: The hospital ensures that all its systems and facilities are
in tune with industry benchmarks and state of the art.In order to ensure this, the
hospital has taken certifications like NABH and JCI. This ensures standardization
in the delivery of services by qualified professionals.

 A wide network of hospitals: The Fortis group has a wide network of hospitals

across most leading cities of India. The hospital chain also has plans to expand
into Tier 2 and Tier 3 cities.
Weaknesses in the SWOT analysis of Fortis :
Weaknesses are used to refer to areas where the business or the brandneeds improvement.
Some of the key weaknesses of Fortis are:

 The decision to focus on India: From being an international brand the company

has decided to focus completely on India since the country shows a lot of promise
in healthcare and is likely to figure big on the global healthcare landscape.
However, there is a strong likelihood that conditions may change in the future.

 Expensive services: Fortis Hospitals are perceived as a very expensive player in

the market and many patients feel that they charge higher than the market
average for many of their services. For this reason many looks at Fortis as suitable
for foreign patients.

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  Increase in the number of beds: The latest strategy of Fortis Healthcare is to
exploit the available space to the maximum extent possible and they are trying to
increase the number of bed size without increasing the size of the hospital.This
may prove to be a disastrous move for the company in the long run.
Opportunities in the SWOT analysis of Fortis :
Opportunities refer to those avenues in the environment that surrounds the business on
which it can capitalize to increase its returns. Some of the opportunities include:

 Growing health concerns: With more and more information available over the
Internet, people are highly conscious of their health today. They are also aware
that after 40 they need to keep track of the signals that their body gives them. This
is making people approach specialists even for small ailments providing a
plethora of opportunities for hospitals.

 Corporate Tie-ups: Business houses and corporates are concerned today about

the health and well being of their employees. This makes them enter into tie-ups
with hospitals for regular health check-ups for employees. This is
an opportunity for healthcare service providers to capitalize on.

 Medical Tourism: India is popular globally not just for the quality of its
healthcare but also for the quality of the professionals who provide them.The
nurses of India are wanted globally for the prowess. The healthcare facilities in
India are also relatively cheaper. All this makes India a prime target for medical
tourism.
Threats in the SWOT analysis of Fortis :
Threats are those factors in the environment which can be detrimental to the growth of
the business. Some of the threats include:

 Competition: Fortis Healthcare faces a lot of competition from Apollo

Hospitals and other leading local players like Hinduja, Narayana Healthcare etc.

 Prohibitive healthcare costs: The cost of healthcare is growing and this means

that people may find it difficult to afford quality healthcare. However, healthcare
professionals may find it difficult to bring down the expenses and thus may suffer
losses if they have to reduce the prices.

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From the above study it is inferred that the Current ratio status records the maximum for
the financial year 2016-17 and it records the least for the financial year 2015-2016. From
the above table it is inferred that the Liquid Ratio status records the maximum for the
financial year 2016-17and it records the least for the financial year 2016-17. From the

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above table it is inferred that the Gross Profit status records the maximum for the
financial year 14-15 and it records the least for the financial year 2016-2017. From the
above study it is inferred that the Net Profit status records the maximum for the financial
year 14-15 and it records the least for the financial year 2016-2017. From the above table
it is inferred that the Proprietor Fund status records the maximum for the financial year
2016-17 and it records the least for the financial year 2015-16. From the above table it is
inferred that the Earnings Per Share status records the maximum for the financial year
2016-17 and it records the least for the financial year 2016-2017.

From the above study it is inferred that the Stock Velocity Ratio status records the
maximum for the financial year 2016-17 and it records the least for the financial year
2015-16. From the above table it is inferred that the Inventory Turnover Ratio status
records the maximum for the financial year 2014-15 and it records the least for the
financial year 2016-2017. From the above table it is inferred that the Interest Coverage
Ratio status records the maximum for the financial year 2016-17 and it records the least
for the financial year 2014-2015. From the above table it is inferred that the Degree of
Operating Leverage status records the maximum for the financial year 2016-17 and it
records the least for the financial year 2013-2014. From the above table it is inferred that
the Degree of Financial Leverage status records the maximum for the financial year
2014-15 and it records the least for the financial year 2013-2014. From the above table it
is inferred that the Fixed Assets status records the maximum for the financial year 2013-
14 and it records the least for the financial year 2016-2017.

Apart from the financial findings Fortis healthcare ltd. is undoubtedly number one
healthcare in India. It has build very emotional & cordial relationship with its
patients. They are also intending to build long term relationship with all its stakeholders
which are very essential for successful business venture. In order to patient they should
provide good parking facility Cleanliness and hygienic environment is also the major
concern for Fortis healthcare ltd.. Management needs to be focus on it. Pharmacy layout
should also be developed in an efficient manner so that patient can get things easily.
According to research I found that most of the people were affected &

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Conclusion

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It can thus be seen that deploying IT can help the medical profession in improving its
quality of service and thus automatically increasing the preparedness and defensiveness.
Of course, it isof vital importance that the software must have the right type of
modularity and openness sothat it is manageable, maintainable and upgradable. The
hardware should also be reliable, available and have the necessary performance capacity.

 Certainly, computers with their intrinsic power can play a major role in a hospital.

Computers can act as a communication link  between departments and allows the
common database to be shared by them. They can performthe complex task of matching,
tabulating, calculating, retrieving, printing and securing the dataas required. Well
designed, integrated computer system can be a great tool in the hands of thehospital
management in improving services, controlling cost, and ensuring optimal utilisationof
facilities

Suggestions
1. Write welcome letters and call new staff. Encourage staff with signage such as,
“through these doors walk greatest staff”

2. Develop a robust orientation program for staff and families. Create pride cards
based on what makes staff proud. Implement an employee of the day award

3. Develop a physician navigator program. Establish physician e-communities and

women MD networks

4. Promote the hospital in physician practice reception areas and exam rooms.
Engage referral services; offer same day scheduling

5. Promote languages, reduce accents and improve speech

6. Offer free screenings and complimentary physician visits for patients. For
physician integration and alignment, consider options beyond employment

BIBLIOGRAPHY

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www.fortishealthcare.com/

www.moneycontrol.com/india/stockpricequote/hospitals-medical.../fortishealthcare/FH

https://economictimes.indiatimes.com › Markets 

https://en.wikipedia.org/wiki/Fortis_Healthcare

https://www.bseindia.com/stock-share-price/fortis-healthcare-ltd/fortis/532843/

https://www.scribd.com/document/317947074/Project-on-Fortis-Hospital

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