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Healthcare sector may grow annually at 16-17 per cent

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The Centre’s Ayushman Bharat scheme will drive Indian healthcare industry to grow annually at 16-17 per cent to reach to Rs 8.6 trillion by FY22, says a brokerage report.

The report further says that if implemented successfully the scheme can prove to be a gamechanger in meeting the severe shortage of healthcare infrastructure in the country.

The significant interest shown by many reputed healthcare brands recently to acquire stake in Fortis healthcare ltd is big proof of the fact that domestic healthcare sector has huge potential, report notes.

 “We believe the key reasons for this interest are the shortage of healthcare infrastructure in the country, including bed capacity, medical practitioners etc, and Government’s mega plan of expanding healthcare reach across the country through Ayushman Bharat scheme,” ICICI Securities said in a weekend note.

Hospitals are expected to grow at 16-17 per cent CAGR to reach to Rs 8.6 trillion by FY22 from Rs 4 trillion in FY17.

“We believe the Ayushman Bharat scheme can provide significant growth opportunity for hospitals with a potential addressable market of Rs 50 trillion, though the successful implementation of the scheme has to be seen,” it noted.

Highlighting the factors which are driving the growth of Indian healthcare sector, the report said that the country has just 0.7 beds per 1,000 people compared to the global average of 2.7 and the WHO recommendation of 3.5 beds. This is the key reason for hospitals to be in continuous expansion mode.

The ambitious Ayushman Bharat targets to provide healthcare coverage of Rs 5 lakh each for 100 million families. If implemented successfully, the scheme will be one of the largest Government-funded healthcare schemes globally with an addressable market opportunity of Rs 50 trillion.

Implementation of such a large plan will be challenging and time-consuming but if successful it can provide huge growth potential for the healthcare companies, the report said.

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