Indian Hospital Industry on a Healthy Track

Navi Mumbai, India (PressExposure) February 20, 2012 -- Indian Hospital Industry

The Indian healthcare industry is estimated to be valued at Rs2.8tn in size in FY11, growing at a 5-year CAGR of 13.1% p.a. CARE Research estimates healthcare industry has the potential to almost double to Rs5.0trn over the next five years, implying a growth rate of 12% p.a. This will be mainly driven by rise in per capita spending on healthcare, change in demographic profile, transition in disease profile, increase in health insurance penetration, and fast growing medical tourism market.

According to Research estimates, hospital industry accounts for roughly 70% of total healthcare market. The hospital industry is classified into three segments - namely, primary, secondary and tertiary. The Indian hospital industry can be broadly categorized as 1) highly fragmented in nature due to large presence of unorganized players, 2) capital intensive with long gestation period, 3) positive supply demand fundamentals, 4) favorable government policies and 4) attractive business model for long term investors with project IRR of 15-17%.

Indian government targets to increase the share of public expenditure on health to at least 2.0%-2.5% of GDP by the end of 12th five year plan (FY13-17) from the current level of 1.26% of GDP, which is well below the emerging market average of 3.0%. However, CARE Research believes it would be difficult for the govt to achieve the target considering the worsening fiscal deficit scenario. Given limited room for significant increase in public spending and low faith in the public health system, private institutions will be the major beneficiary of the growing healthcare market.

Solo practice clinics and small nursing homes mostly run by entrepreneur doctors (with


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Press Release Submitted On: February 23, 2012 at 1:16 am
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