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ViewCube: On the mend
Demand potential healthy
Regulatory action a key monitorable
Our view
Healthcare demand on anupward curve
In the past two years, the hospital industry in India clocked a healthy 13-14% compound annual growth rate (CAGR), driven by deeper penetration of healthcare insurance, increasing incidence of non-communicable diseases, growth in urbanisation and awareness, and booming medical tourism.
In the two years through fiscal 2021, growth is expected to improve to 14-15%, given favourable demographics, tailwinds in the form of focused expansion of large corporates with adjusted business models into Tier II cities, and demand impetus on account of Ayushman Bharat.
The Rs 3.8 lakh crore industry (estimated as of fiscal 2019) includes inpatient treatments (~70% value share) and outpatient consultations (~30%).
The government’s share of the industry is estimated at 34%, while the private sector commands the lion’s share at 66%. Within the private sector, small and medium hospitals dominate (85-90%) and large hospitals account for only 10-15%, indicating the highly fragmented nature of the industry.
Analytica