Market Research Report : Hospital Market in India 2012

Hospital Market in India

March 2012

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HOSPITAL MARKET IN INDIA 2012.PPT

Executive Summary

Market

Drivers &

Challenges

Competition

Drivers:

�Shortage in number of hospital beds

�Growing healthcare market

�Growing affordability among people

�Growing Medical tourism

� Increasing lifestyle diseases

�Changing demographic structure

�Growing health insurance market

Challenges:

�Shortage of medical professionals

� Lack of investment in IT infrastructure

�Shortage of FDI flows in Indian hospitals

Role of

Government

Trends

�The hospital market is currently worth INR xx units and is expected to reach INR yy units by 20--

�The sector is divided primarily into public and private along with NGO operated hospitals

�Constantly rising population results in perennial demand for hospital beds exceeding its supply

Major Hospitals Chains

Player A

Player B

Player C

Player D

Player E

Player F

�Secondary Care Hospitals

�Foreign Hospitals

�Public Private Partnership

�Government contribution to raise number of hospitals

�Financial incentives to private sector

�Future Plans

�Private Equity

�Mobile Hospitals

�Expansion plans to foreign shores

�Telemedicine

�Health Cities

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•Introduction

•Market Overview

•Drivers & Challenges

•Role of Government

•Recent Trends

•Competition

•Region wise hospital profiles

•Hospitals commissioned in 2012-13

•Key Players

•Strategic Recommendation

•Appendix

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Hospitals can be classified on grounds of ownership and

clinical operation

Clinical Basis

Ownership Basis

Public Hospitals

Run by Central Government,

State Government and local bodies

Voluntary Hospitals

Functions with public or private funds

on a non-commercial basis

Corporate Hospitals

Public limited companies formed

under Companies Act run

commercially and is likely to operate

chain of hospitals

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

Rural Hospitals

Located in rural areas permanently

staffed by at least one physician that

provides in-patient accommodation

and medical care for more than one

category of medical discipline

Specialized Hospitals

Provides medical attention for one

discipline and is administratively

attached to a general hospital

Tertiary Hospitals

State and Central government

established in their state capitals

Isolation Hospitals

Hospitals for the care of persons

suffering from infectious diseases

Source:

`

`

HO

SP

ITA

L

Teaching Hospitals

A hospital to which a college is attached

for medical/dental education

Private Hospitals

Hospitals owned and operated by

individual or group of people as

business for purpose of profit earning

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Hospital market accounts for half of the healthcare sector's

revenues that has tremendous future growth potential

• Hospitals are a major component of the Indian Healthcare industry forming a more than 50% of healthcare sector revenues

• The hospital market is currently worth INR X1 units and is expected to reach INR X7 units by 20--

• The market is expected to grow at a CAGR of a% between 20-- to 20--

• The hospital sector is divided into of public and private � In 20-- total number of hospitals was XX of which A1 were

public operated while the remaining B1 were private operated

� In 20-- total number of hospital beds was estimated to be YY of which A2 was under public ownership and the remaining B2 was under private ownership

• With the constant rising population, demand for hospital beds far exceeds the supply� According to recent study conducted by WHO, there are

only p beds per 1000 population which is far below the target of q beds per 1000 population by the Indian Health Ministry

• A huge shortage of beds is a major driver for investment in the hospital industry� There is a trend of growth in speciality and multi speciality

hospitals in the country

Market Overview Market Size and Growth – Private

Source:

0

2

4

INR tn

a

20--e

X7

20--e

X6

20--e

X5

20--e

X4

20--e

X3

20--

X2

20--

X1

100%

Hospital Beds A2% B2%

Hospitals A1% B1%

A B

Hospital Market Segmentation – 20--

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Drivers & Challenges – Summary

Drivers

Shortage in number of hospital beds

Growing healthcare market

Growing affordability among people

Growing medical tourism

Growing health insurance market

Increasing lifestyle diseases

Changing demographic structure

Challenges

Shortage of medical professionals

Lack of investment in IT infrastructure

Shortage of FDI flows in Indian

hospitals

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Role of Government: Summary

Role

of

Government

Direct and Indirect

Initiatives

Future Plans Financial Incentives


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Trends - Summary

`

Secondary Care Hospitals

Foreign hospitals are showing interest to penetrate Indian market

Mobile Hospitals

Private Equity

Indian hospitals expansion plans to foreign shores

Trends

Telemedicine

Health Cities

Public Private Partnerships


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Major Public Companies - Summary

-700,000,000

-600,000,000

-500,000,000

-400,000,000

-300,000,000

-200,000,000

-100,000,000

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

19,000 19,500 20,000 20,500 21,000 21,500 22,000 22,500 23,000 23,500

Revenue

(INR mn)

Net Profit

(INR mn)

B A

Player A Player B

Size of bubble represents

Market Capitalization in INR xx


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Public: Domestic Company – Company A Ltd (1/4)

Key People

Source:

Products and Services

Company Information

Corporate Address

Company A

Address Line 1

Address Line 2

City

Tel No. xxx

Fax No. yyy

Website www.companyA.com

Year of Incorporation 19--

Ticker Symbol mmm

Stock Exchange ---

Name Designation

Person A Founder, Executive Chairman

Person BManaging Director, Executive

Director

Person C Chief Executive Officer

Person D Group President

Category Products/Services

Healthcare Facilities

Healthcare

Consultation

Others

Hospital NetworkCity O


Head Office and Hospital Network– India

City MHead Office

City N

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Key Ratios

Financial Summary

• The company incurred a net profit of INR Y4 unit in FY 20--, as

compared to net profit of INR Y3 in FY 20--

• The company reported total Income of INR X4 in FY 20--, registering

an increase of m per cent over FY 20--

• The company earned an operating margin of n per cent in FY 20--, an

increase of o percentage points over FY 20--

• The company reported debt to equity ratio of p in FY 20--, an

increase of q per cent over FY 20--

Particulars y-o-y change

(20– to --)20-- 20-- 20-- 20--

Profitability Ratios

Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios

Operating costs (% of Sales)

Administration costs (% of

Sales)

Interest costs (% of Sales)

Liquidity Ratios

Current Ratio

Cash Ratio

Leverage Ratios

Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios

Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Improved Decline

Financial Snapshot

Source:

Financial Summary

Indicators Value (dd/mmm/20--)

Market Capitalization (INR)

Total Enterprise Value (INR)

EPS (INR)

PE Ratio (Absolute)

Net Profit / Loss

Total Income

0

5

10

15

20

25

0.0

0.5

1.0

1.5

2.0

X4

20--

Y3

X3

20--

Y2

X2

20--

Y1

X1

INR unit INR unit

20--

Y4



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Source:

Key Business Segments Key Geographic Segments

Business Highlights

Description News

Overview • Treatment facilities in fields of cardiology, oncology, neurology, orthopedics

Services• Telemedicine services, education, training programs & research services and a host of

other non-profit projects

B1

A1B4

A4

20--

C3B3

A3

20--

C2B2

A2

20--

C1

20--

C4 0

20

40

60

80

100

20--

100%A B C

The company

operates only

in Country A



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Appendix

Ratio Calculations

Operating Margin(Operating Income/Revenues)*100

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin(Income Before Tax / Revenues *100

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

Return on Working Capital(Net Income / Working Capital) *100

Return on Assets (Net Income / Total Assets)*100

Return on Fixed Assets (Net Income / Fixed Assets) *100

Operating Costs (% of Sales)(Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100

Ratio Calculations

Current RatioCurrent Assets / Current

Liabilities

Cash Ratio

{(Cash & Bank Balance +

Marketable Securities) / Current

Liabilities)}

Debt to Equity Total Liabilities / Shareholders

Equity

Debt to Capital Ratio{Total Debt / (Shareholders

Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Capital Employed Turnover Sales / Shareholders Equity

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The Hospital Market in India report is part of Research on India’s Healthcare Industry Series.

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Market Research Report : Hospital Market in India 2012

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