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India's hospital sector is set for sustained growth as bed capacity expands and private providers capture a larger share of healthcare spending, according to Antique Broking, which expects the healthcare delivery market to grow at a "healthy 10-12% CAGR to INR 12tn over FY25-30E."
"Over FY26-30E, these hospitals will cumulatively expand the capacity by 54% to 108,000+ beds," the brokerage said, referring to 15 hospitals in its sample set that have already added ~19,000 beds since FY23 to reach 70,000+ beds. "We believe sector growth will continue to be driven from bed expansion, complemented by 45% ARPOB growth." Concerns around oversupply are "misplaced," Antique said, because "Insurance penetration is still low". "Ayushman Bharat + PM-JAY + rising corporate cover is systematically converting OOP patients to insured volumes, thereby, expanding the TAM faster than the bed supply, Organised sector is gaining market share from unorganised (single-doctor, sub-scale) hospitals and faster breakeven as majority expansion is brownfield leading to higher returns." Of the planned expansion, "63% is brownfield, leading to faster breakeven and higher RoCE." Regulatory tailwinds are also clearing overhangs. "The building height norms for vertical expansion, CCI order on integrated healthcare delivery model and CGHS tariff revision will aid growth," the report noted. Case-mix trends support pricing. "In FY25, CONGO-R contributed 68% of India's healthcare delivery market. These specialties typically involve higher treatment intensity, advanced diagnostics and greater procedural complexity, resulting in higher ARPOB (Average Revenue per Occupied Bed) compared to general medical treatments." Antique believes "hospitals with established centres across key specialties are best positioned to capitalize on this favourable case-mix shift." The report said that India has rapidly emerged (10th rank in Medical Tourism Index) as one of the leading destinations for medical tourism with cost-effective treatment options, often at a fraction of the prices charged in developed countries, and "government's proactive policies, streamlined visa procedures for medical travellers, and investments in healthcare infrastructure further enhance India's competitiveness." "The share of treatments delivered by private healthcare providers is expected to be 69% by FY30E," yet "large private hospital chains account for only ~20% of the overall hospital market, highlighting significant headroom for further consolidation." Incremental PMJAY demand "is expected to be largely absorbed by private operators, given the existing burden on public healthcare infrastructure," it said. "We are positive on the hospitals sector on account of majority expansion being brownfield, growth visibility over the long-term, improving operational efficiency and d) healthy balance sheet," Antique noted, adding that established chains with strong brand, multi-specialty capabilities, and scalable models "are well-positioned to capture a disproportionate share of future healthcare spending." (ANI)
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