Health Services

Industry Code (as per CMIE Prowess): 0101041515000000'

June 2022

Overall Industry Risk Score: 15/20 | Favourable

Sample Size: 47 Companies

Median Rating Value of sample size: A+

Individual Parameters Contributing to the Score

Demand & Supply Balance

20/20

High Demand

The healthcare spending in the recent past has been buoyed by increasing health awareness & disposable incomes, lifestyle ailments and increasing medical coverage. The supply is yet to catch up with demand. Demand for health care services in India has been rising remarkably especially due to the health crisis. The Budget for 2021-22 allocated USD 4.8 Billion for Covid vaccines. FDI inflows between April 2000- December 2021 in sectors such as hospitals and diagnostic centres and medical and surgical appliances stood at US$ 7.73 billion and US$ 2.35 billion respectively. The private sector has been expanding in a big way to leverage on the untapped demand for healthcare services.

Extent of Competition

12/20

Neutral

While the healthcare companies are not very large in size except for a few nation-wide chains, quality healthcare is confined mostly to the metros & Tier 1 geographies. The sector is getting increasingly organised with increasing presence of organised pan India players both in the diagnostic centre segment and hospital segment.

Regulatory Risk

16/20

Stable Regulatory environment

Central government's Health Protection Scheme Ayushman Bharat is critical for this sector. Government initiatives such as National Digital Health Mission (NDHM) is encouraging adoption of digital tools in healthcare.

Input Related Risk

12/20

Largely predictable supply of inputs from diversified sources or Raw Materials with rare, occasional disruptions / fairly predictable price band

Cost escalations of medical devices & drugs have been increasing input costs in the industry; Government has been attempting to mitigate the cost pressures by rationalizing the GST rates in respect of some of the items. Besides shortage of beds, the availability of skilled manpower both doctors and nurses remains a challenge especially since these inputs cannot be ramped up quickly.