Market Research Report : Hospital market in india 2013

Hospital Market in IndiaHospital Market in India

July 2013

Executive Summary

Market Overview

The hospital market in India was valued at INR x2 tn in 20‐‐ and is expected to reach INR x5 tn by 20‐‐ The sector is divided primarily into public and private along with NGO operated hospitals Constantly rising population results in perennial shortage of hospital beds

Drivers &

Drivers:Shortage in Number of Hospital Beds Increasing Lifestyle Diseases

Challenges: Shortage of Medical Professionals Lack of Investment in IT Infrastructure

Drivers & Challenges

Surge in Medical Tourism Government Initiatives Propelling InvestmentGrowing Target Hospitalization Population Group

Shortage of FDI Inflow in Indian Hospitals

GroupGrowing Health Insurance Market Rising Disposable Income

Specialty ClinicsGlocal Healthcare Systems

Hospital Mobile ApplicationsHospital Information Centre

Luxury Offerings Diversified Business ApproachKey Trends

Competitive

Glocal Healthcare Systems Hospital Information Centre Diversified Business Approach

Key Players

Apollo Hospitals Enterprise Ltd. Fortis Healthcare (India) Ltd. Care Hospitals Pvt. Ltd.

y

2HOSPITAL MARKET IN INDIA 2013.PPT

Landscape Columbia Asia Hospital Pvt. Ltd.

Manipal Health Enterprises Pvt. Ltd.

Max Healthcare Institute Ltd.

•Economic Indicators•Indian Healthcare Scenario •Introduction•Introduction•Market Overview•Drivers & Challenges•IT Adoption•Role of Government •Key Trends•Key Trends•Key Initiatives•Competitive Landscape•Trade Fairs & Events•Recent Transactions•Strategic Insights

3

Strategic Insights•Appendix

HOSPITAL MARKET IN INDIA 2013.PPT

SAMPLE Economic Indicators (1/3)

INR tn

15d4c4d3

3

Gross Domestic Product At Factor Cost (At Constant Prices): Quarterly

14

13

12

11

b4

a4

c3b3

a3

d2c2b2

a2

d1c1b1

a1

10

Q4Q3Q2Q120‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐

Inflation Rate: Monthly

N.B.: New Series Base : 2004‐05

y

0 8

1.0

%

ECB

0.2

0.4

0.6

0.8

DA

4

0.0

Mar 20‐‐ ‐ Apr 20‐‐Feb 20‐‐ ‐Mar 20‐‐Jan 20‐‐ ‐ Feb 20‐‐Dec 20‐‐ ‐ Jan 20‐‐Nov 20‐‐ ‐ Dec 20‐‐


Healthcare system in India requires a larger public outlay due to huge population base Healthcare Industry Overview

• According to “World Health Statistics 2011 Report, India”,

healthcare comprised of r% of India’s GDP in 20‐‐ Public and private expenditure on health as percentage of GDP

Healthcare Sector – Market Size & Growth

8 000

10,000

INR bn

A%f

ed Public and private expenditure on health as percentage of GDP

was r1% and r2% respectively

• Favorable demographics, increase in awareness levels

and better medical care are some factors that are driving

healthcare sector in India 0

2,000

4,000

6,000

8,000 dc

ba

healthcare sector in India

• Hospital forms the largest segment of overall healthcare

market followed by pharmaceutical, medical devices,

health insurance and diagnostics

G d l t ti f h lth i i t i

0

2017e2016e2015e2014e2013e2012

Healthcare Market Segmentation – 20‐‐ ‐ ‐‐

•Gradual penetration of health insurance is stepping up

affordability of health services through increased demand

for preventive and curative healthcare services

• Superior quality healthcare coupled with low treatment a%d%e%

f%

c%cost in comparison to other countries is benefiting Indian

medical tourism, thereby steering forth Indian healthcare

market Treatment for major surgeries in India costs approximately m%

b%

c%

A EC

5

of that in developed countries B FD


SAMPLE FDI Inflow in Indian Healthcare Segments

Several healthcare segments in India have earned good volume of FDI over a 12 years’ span between 20‐‐ to 20‐‐

INR m bnHospital and diagnostic centers INR m1 bnHospital and diagnostic centers

INR m2 bnMedical and surgical appliances

INR m3 bnDrugs and pharmaceuticals sector


Hospitals can be classified on grounds of ownership and clinical operation

Classification of Hospitals

Ownership Basis Clinical Basis

Public Hospitals

Run by Central Government,State Government and local bodies

General Hospitals

Hospitals staffed by at least two medical officers that provides in‐patient

accommodation and medical care for more than one category of medical discipline

PrivateHospitals

Run by Central Government,State Government and local bodies

Specialized Hospitals

Provides medical attention for one discipline and is administratively attached to a general

hospital

IsolationH it l

Hospitals for the care of persons suffering from i f ti di

Corporate Hospitals

Public limited companies formed under Companies Act run commercially and is likely

t t h i f h it l

Hospitals infectious diseases

Tertiary Hospitals

State and Central government hospitals established in their state capitals

pto operate chain of hospitals

Voluntary Functions with public or private funds on a

TeachingHospitals

A hospital to which a college is attached for medical/dental education

Rural Located in rural areas permanently staffed by at least one physician that provides in‐patient

7

Voluntary Hospitals

Functions with public or private funds on a non‐commercial basis Hospitals accommodation and medical care for more

than one category of medical discipline


Hospitals is the most crucial aspect of Indian healthcare sector, constantly developing to provide world class service

•Hospitals are a major component of the Indian Healthcare industry forming more than a% of the total healthcare sector’s revenue

Market Overview (1/2) Market Size and Growth – Private HospitalsINR tn

6x7healthcare sector s revenue

•Hospital sector is divided into public and private There are ~p private hospitals and ~q public hospitals across the country

• Potential growth prospect of Indian healthcare is attracting many foreign companies who are willing to

5

4

3

+X% x6

x5x4

x3x2attracting many foreign companies who are willing to

invest or establish base in India There is a growing trend to tap the high potential tier II and tier III cities A trend of growth in specialty and multi specialty hospitals in the country is also observed

2

1

0

20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e20‐‐

x2

20‐‐

x1

in the country is also observed 20 e20 e20 e20 e20 e2020

• Primary Healthcare facilities acts as the backbone of public healthcare system established and operated primarily by government institutions with low involvement of private

• Based on approach of universality, comprehensiveness and equity in health, the country lags behind in terms of standardization of processes, quality and service

Key Healthcare Delivery Formats

• Secondary Care Hospitals that may or may not specialize in treatment of a specific ailment but offers most essential services

• In most cases it caters to 85% to 90% of medical requirements• The segment consists of district and all other privately run general private hospitals

• Tertiary Care Hospitals are specialized which offer specific facilities and employ highly

8

specialized practitioners who also offer specialized consultative care• Service is provided by private, regional or central level institutions such as multi specialty and single specialty hospitals


Drivers & Challenges – Summary

Drivers

Shortage in Number of Hospital BedsShortage in Number of Hospital Beds

Increasing Lifestyle DiseasesChallenges

Surge in Medical Tourism

Government Initiatives Propelling Investment

G i T H i li i

Shortage of Medical Professionals

Lack of Investment in IT Infrastructure

Growing Target Hospitalization Population Group

Growing Health Insurance Market

Shortage of FDI Inflow in Indian Hospitals

Rising Disposable Income


Huge demand‐supply gap for hospital beds is the potent driving element of the hospital market

• India faces an acute shortage in number of hospital beds in comparison to population level of the country

Shortage in Number of Hospital Beds Impact

According to World Health Statistics, India is positioned among the lowest countries on a global perspective with which is far below the global average of s beds per t population

According to National Health Profile 20‐‐, India has a public sector availability of one bed per f population in g government hospitals which is only h beds per i population

• Public sector as well as private sector needs to pull up the number of hospitals and other p p p phealthcare institutions as population growth will raise demand for more hospital beds By 20‐‐, population size will be d mn that will necessitate e mn beds to achieve High Level Expert Group (HLEG) target of i beds per j population

Hospital Beds Per 1,000 Population – 2010

UK o

USA n

Japan m

Rural Urban Hospital Bed Ratio Comparison

s

Rural India Public Hospital Bed Ratio

Rural India is characterized by public hospitals while Urban

India by private hospitals

Brazil s

China r

Sri Lanka q

Russia p

UK o

u

c

Private Hospital Bed Ratio

India by private hospitals


India u

Thailand t Developed Nations

Emerging Nations Urban IndiaSouthern IndiaCentral India

Lack of foreign investments acts as an impediment to the hospital market of the country

ImpactShortage of FDI Inflow in Indian Hospitals• Indian hospitals is lagging behind in acquiring sufficient share of FDI FDI equity inflow in hospital sector is far low even when compared to drugs and pharmaceutical sector in India

FDI investment in hospital & diagnostic centers ranks ard in terms of amount of FDI equity inflows in period between Apr 20‐‐ to Jan 20‐‐

• There are both internal and external issues that decelerate foreign investments in our country

Hospital & Diagnostic CentersINR n bn ~ b%

Internal Issues

High cost involvement in hospital establishment

Depreciation of medical equipments

Imbalance in FDI Investment Within Healthcare Sector

Drugs & PharmaceuticalsINR m bn ~ a%

INR n bn b% Depreciation of medical equipments

Feasibility issue in upgrading healthcare equipments

External IssuesINR m bn a%

Indian private hospitals unable to establish hospitals overseas

Requirement of in‐depth localized knowledge of host country


g y

Indian government fails to provide a clarity in policies on overall healthcare sector

SAMPLE IT Adoption in Hospital is progressing slow with only high end corporate hospitals…

35

40

INR bn

18.3%

u

t

IT Spending on Healthcare

10

15

20

25

30

p

18.3% ts

rq

0

5

10

20‐‐ 20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e

m%•Business streamlining and patient administration systems is the prime motive for IT adoption in hospitals H it l id b tt d t

n%

•Hospitals can provide better care and manage costs better internally and patients can look for lower healthcare costs

• IT leveraging and sharing data on cloud helps in saving i f t t d t t t t

12

IT Adoption in Hospitals

IT Adoption in Other Healthcare Segments

infrastructure and manpower to a great extent


SAMPLERole of Government: Summary SAMPLE Budgetary Allocation

Role of

Government

Financial IncentivesPublic Private PartnershipsFinancial Incentives Partnerships

(PPPs)


SAMPLEKey Trends SAMPLE Specialty

Diversified Business

Clinics

Glocal HealthcareDiversified Business Approach

Glocal Healthcare Systems

KeyTrends

Luxury Offerings

Hospital Mobile Applications

Trends

Hospital Information Centre


SAMPLE Key Initiatives – Summary

Health Cities

KeyInitiatives

Telemedicine Mobile HospitalsTelemedicine Mobile Hospitals


‘Health Cities’ are gradually being popularized to cater mostly to medical tourists

•Health Cities primarily include super specialty hospital attached to a medical college, residential area with in‐house high end diagnostic centers, commercial zones and other common infrastructure

H l h Ci i•Health Cities cater to larger populations by offering additional facilities such as hotels, recreational facilities such as spa, gym and even golf courses

• They are also expected to lay a greater emphasis on education and R&D

Health Cities

Narayana Hrudayalaya

• As on May 20‐‐, the group aims to build s bed health

cities that will offer medical care facilities in heart

Odisha State Government

• As on Jul 20‐‐, the state government is planning to set up an integrated health city on the outskirts of Bhubaneshwarcities that will offer medical care facilities in heart,

kidney and cancer

• One city each is planned in Jaipur and West Bengal,

while two shall come up on the outskirts of Kolkata

• As on Dec 20‐‐, the group is in plans to initiate a

Bhubaneshwar• Concept note of the project has been prepared by Industrial Infrastructure Development Corporation of Odisha

• Project is aimed at making the state a complete health destination and promote medical tourismAs on Dec 20 , the group is in plans to initiate a

centre in Lucknow, UP with a bed capacity of m‐n

beds

health destination and promote medical tourism• The government would promote the project on public private partnership with one or two mega healthcare promoters as anchors of the proposed city

• QRG Enterprises announced its plan of penetrating healthcare segment with hospital chain in NCR along with Ludhiana, Agra and Jaipur as


Q G te p ses a ou ced ts p a o pe et at g ea t ca e seg e t t osp ta c a C a o g t ud a a, g a a d Ja pu ason Jun 20‐‐

• The group plans to set up a p‐bedded super‐specialty facility in Faridabad that is expected to be commissioned in Sep 20‐‐ with an investment of INR d bn that would be named ‘QRG Health City’

Competitive Benchmarking (2/5)

Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (1/3)

40

% Net MarginOperating MarginGross Margin

10

20

30

40

c3b3

c2b2

a2

c1b1

a1

0

CB

c2

A

• A recorded gross margin of a1%, higher than B which recorded gross margin of a2%

• A recorded an operating margin of b1%, higher than both B and C that recorded an operating margin of b2% and b3% respectively

• A recorded a net margin of c1, higher than both B and C that recorded net margin of c2 and c3 respectively


Major Public Companies ‐ Summary

500,000,000

Net Profit(INR mn)

100 000 000

200,000,000

300,000,000

400,000,000 Size of bubble represents Market Capitalization in INR mn

‐200,000,000

‐100,000,000

0

100,000,000

ba

‐500,000,000

‐400,000,000

‐300,000,000

‐700,000,000

‐600,000,000

15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000

Revenue(INR mn)

18

BA


Private: Domestic Company – Player A (1/5)

Company Information Offices and Centres – India

Corporate Address xx

Tel No. xx

Website xx

Year of Incorporation xx

Delhi

Head OfficeProducts and Services

Category Products/Services

Key People

N D i ti

Category Products/Services

Sports Goods xx

Fitness Equipment xx

Name Designation

Equipment Supplier xx

Others xx



Shareholders of the Company as on xx/xx/20‐‐ Ownership Structure

Name No. of Shares held

100 0%100 0%100 0%

Directors or relatives of directors

100.0%100.0%100.0%

Total

20‐‐20‐‐20‐‐


Ownership structure corresponds to Date of AGM: xx/xx/20‐‐, xx/xx/20‐‐ and xx/xx/20‐‐

i i l S h K i


Financial Snapshot Key Ratios

Particulars y‐o‐y change (20‐‐ ‐ ‐‐)

20‐‐ 20‐‐ 20‐‐ 20‐‐

Profitability RatiosOperating Margin N.A. N.A. N.A. N.A. N.A.

Net Profit/LossTotal IncomeINR mnINR mn

nNet Margin N.A. N.A. N.A. N.A. N.A.

Profit Before Tax Margin N.A. N.A. N.A. N.A. N.A.

Return on Equity 1.47 5.36% 3.89% 0.00% 0.00%

Return on Capital Employed 0.00 0.00% 0.00% 0.00% 0.00%

Return on Working Capital 0.00 0.00% 0.00% 0.00% 0.00%

Return on Assets 0.00 0.00% 0.00% 0.00% 0.00%

m

Financial Summary

Return on Fixed Assets 0.00 0.00% 0.00% 0.00% 0.00%

Cost RatiosOperating costs (% of Sales) N.A. N.A. N.A. N.A. N.A.

Administration costs (% of Sales)

N.A. N.A. N.A. N.A. N.A.

Interest costs (% of Sales) N A N A N A N A N A

0

20‐‐20‐‐

• Company earned a net profit of INR m units in FY 20‐‐, as compared to net profit of INR n units in FY 20‐‐

• It reported total income of INR p units in FY 20‐‐, registering an increase of t per cent from FY 20‐‐

Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A.

Liquidity RatiosCurrent Ratio ‐10.83% 1.76 1.97 1.71 2.07

Cash Ratio ‐35.86% 0.16 0.24 0.20 0.32

Leverage RatiosDebt to Equity Ratio 14.21% 1.16 1.02 0.50 0.50

• The company reported a debt to equity ratio of x percentage points in FY 20‐‐, an increase of y per cent over FY 20‐‐

Debt to Capital Ratio 6.57% 0.54 0.50 0.33 0.34

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Efficiency RatiosFixed Asset Turnover N.A. 0.00 0.00 0.00 0.00

Asset Turnover N.A. 0.00 0.00 0.00 0.00

Current Asset Turnover N.A. 0.00 0.00 0.00 0.00

21

Improved Decline

Current Asset Turnover N.A. 0.00 0.00 0.00 0.00

Working Capital Turnover N.A. 0.00 0.00 0.00 0.00

Capital Employed Turnover N.A. 0.00 0.00 0.00 0.00



Business Highlights

Description News

Overview • xx

Facilities • xx


Public: Domestic Company – SWOT Analysis – Player A (5/5)

XX• XX

• XX

O

WS

TO

• XX• XX


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