Hitesh Mendha poly medicure jan2009 picks

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  • 1. MOST PROMISING SECTOR IN INDIA HEALTHCARE HITESH MENDHA LONG TERM INVESTMENTPREPARED BY HITESH MENDHA, PUNE
  • 2. Health is ascribed to be a dynamicequilibrium, out come of which isdetermined by a wide variety ofbiological,socio,cultural,economic,political, physical, psychological andenvironmental factors. In a nation like India, where there is noformal social security system in place,notwithstanding the high tax rates,healthcare and health insurance becomethat much more crucial. The sector offers immense potential to healthcare players as the country witnesses a rise in the incidence of lifestyle-related and other diseases. A growing elderly population and rise in income levels are also pushing for better facilities in the country. One of the fastest growing and most potent sectors in India is the healthcare sector. PREPARED BY HITESH MENDHA, PUNE
  • 3. Financial Resources in the Healthcare Industry Healthcare is one of Indias largest sectors, interms of revenue and employment, and the sectoris expanding rapidly . Today the total value of the sector is more than$36 billion. This translates to $36 per capita, orroughly 6% of GDP and is expected to grow tocontributing 8% of Indias GDP by 2012. The Healthcare industry in India is estimated toachieve a market size of $ 77 billion by 2012, andUS$ 150 billion by 2017, this translates into aninvestment opportunity of over $30 billion by 2012. The Government contributes 20% to the totalhealthcare expenditure in India, the remaining80% comes from the private sector Driven by strong local demand, Indian Figure 1: Healthcare spending as part of GDPhealthcare market is expected to continue growing (Source: The Economist)close to previously projected rates of 15 per cent. India has one of the highest private spending inhealthcare as compared to other countries (Fig. 1) PREPARED BY HITESH MENDHA, PUNE
  • 4. Financial Resources in the Healthcare Industry With average household consumption expected to increase by more than seven per centper annum, the annual healthcare expenditure is projected to grow at 10 per cent and alsothe number of insured is likely to jump from 100 million to 220 million, golden days forhealthcare sector is ahead. Indias healthcare industry registered 42.44 per cent growth in net profit during April-June2009, according to the Associated Chambers of Commerce and Industry (ASSOCHAM). In the healthcare sector, the leading 10 companies posted a growth of 23.94 per cent intotal income and 21.37 per cent in total expenditure during the quarter. Government and public employers Private providers (individual, charitable and for-profit) PREPARED BY HITESH MENDHA, PUNE
  • 5. Indian HealthcareCurrent HealthcarePREPARED BY HITESH MENDHA, PUNE
  • 6. Indian Healthcare THE HEALTHCARE DELIVERY SECTOR PLAYS AN IMPORTANT ROLE IN THE ECONOMY TODAY Sector Direct employment Revenues/GDP Healthcare Education Healthcare is the Retail banking largest service industry in terms Power of revenues and the second largest after Railways education in terms of Telecom employmentHotels, restaurants IT By 2012, the sector could account for 7 to 8 per cent of GDP and provide direct and indirect employment of 9 million PREPARED BY HITESH MENDHA, PUNE
  • 7. Indian HealthcareINDIA: AN EMERGING HEALTHCARE HUB PREPARED BY HITESH MENDHA, PUNE
  • 8. Indian Healthcare capability Over 60,000 cardiac surgeries done per yearwith out comes at par with international standards. Multi organ transplants like Renal, Liver, Heart,Bone Marrow Transplants, are successfullyperformed at one tenth the cost. Patients from over 55 countries treated at IndianHospitals. India has become a hot medical destination forpatients in the Middle East, Africa and even theWest. Word is fast-spreading that Indian hospitals canprovide world-class care at competitive rates. India today has big names in healthcare like theAll India Institute of Medical Sciences (AIIMS),Apollo Hospitals and Shankara Netralaya
  • 9. Growing population and economy One driver of growth in the healthcare sector isIndias booming population, currently 1.1 billionand increasing at a 2% annual rate. By 2030, India is expected to surpass China asthe worlds most populous nation. By 2050, thepopulation is projected to reach 1.6 billion. By 2025, an estimated 189 million Indians will beat least 60 years of agetriple the number in2004. Goldman Sachs predicts that the Indianeconomy will expand by at least 5% annually forthe next 45 years (see chart) To meet this growing demand, the country needs US$ 50 billion annually for the next 20 years,says a Confederation of Indian Industry (CII) study. India needs to add 3.1 million beds by 2018 to the existing 1.1 million, and requires immediateinvestments of US$ 82 billion, as per the Technopak Advisors report. PREPARED BY HITESH MENDHA, PUNE
  • 10. Medical Tourism In 2007, India treated 450,000 foreign patientsranking it second in medical tourism. According to a study by McKinsey and the CII,medical tourism in India could become a US$ 2billion industry by 2012 (from US$ 350 million in2006). Credit Suisse estimates medical tourism tobe growing at between 25-30 per cent annually. The key selling points of the medical tourismindustry are its cost effectiveness and itscombination with the attractions of tourism. Treatment cost is lowest in India 20 per cent ofthe average cost incurred in the US, Singapore,Thailand and South Africa. Besides world-class medical facilities, India isalso trying to promote its traditional medicine suchas ayurveda. PREPARED BY HITESH MENDHA, PUNE
  • 11. Medical Tourism Indian Systems Of Medicine Staging a Comeback In Ayurveda recognized as an official healthcare system inHungary. Doctors in the west are increasingly prescribing Indian Systemsof Medicine More than 70% of the American population prefer a naturalapproach to health Americans are said to spend around $25bn on non- traditional medical therapies and products * Indias Gift to the World Ayurveda Yoga Siddha PREPARED BY HITESH MENDHA, PUNE
  • 12. Rise in disease Another factor driving the growth of Indias healthcare sector is a risein both infectious and chronic degenerative diseases, like swine flue(H1N1) recently. India faces high burden of disease because of lack of environmentalsanitation and safe drinking water, under-nutrition, poor livingconditions, and limited access to preventive and curative healthservices Lack of education, gender inequality and explosive growth ofpopulation contribute to increasing burden of disease. Full impact of the HIV epidemic and tobacco related diseases is yetto be felt Indians account for one-third of the worlds patients suffering fromdiarrhoea, TB, respiratory infections, parasitic infestations and prenatalconditions, and a quarter of patients with maternal conditions, a fifth ofnutritional deficiencies, diabetes, and the second largest number ofHIVAIDS cases, which alone stand at 5.19 million. PREPARED BY HITESH MENDHA, PUNE
  • 13. Expanding Middle Class Indias thriving economy is driving urbanization and creating an expanding middle class, withmore disposable inc