Abstract
India’s hospital industry is growing rapidly, valued at ₹8.35 lakh cr. ($98.98 B) in 2023, with a projected CAGR of 5.8-8.0% from 2024 to 2032. Apollo Hospitals and Narayana Hrudayalaya are two leading players, with Apollo being the largest private hospital network and Narayana Hrudayalaya known for cost-effective cardiac care. Narayana Hrudayalaya appears undervalued with a P/E ratio of 33.5 and more profitable (ROCE: 27%), making it an attractive investment option. Apollo Hospitals seems overvalued with a P/E ratio of 83.4 but remains viable for strategic entry points. Both companies are poised for growth driven by increasing healthcare demands and infrastructure expansion.
Introduction
The hospital industry in India is experiencing significant growth, with the market valued at approximately ₹8.35 lakh cr. ($98.98 B) in 2023. Projections indicate a robust compound annual growth rate (CAGR) of 5.8% to 8.0% from 2024 to 2032, potentially reaching between 13.87 lakh cr. and 16.33 lakh cr. ($164.4 B – $193.6 B) by 2032, depending on various market analyses.
Growth Drivers of the Indian Hospital Industry
- Increased Healthcare Expenditure:
- Rising public and private spending on healthcare, with government health expenditure aiming for 2.5% of GDP by 2025.
- Expanding middle class with higher disposable incomes and greater access to health insurance.
- Technological Advancements:
- Adoption of healthcare technologies such as telemedicine and robotic automation, improving service delivery.
- National Digital Health Blueprint promoting innovations in e-health.
- Policy Support and Foreign Investment:
- Favourable government policies allowing 100% FDI in healthcare, attracting significant investments.
- Public-private partnerships enhancing healthcare access, especially in underserved areas.
- Demand for Specialized Services:
- Increasing incidence of lifestyle diseases driving demand for specialized healthcare.
- Growth in medical tourism as India becomes a preferred destination for cost-effective treatments.
These factors are collectively propelling the growth of the hospital industry in India, positioning it for a promising future.
Key players in the Indian hospital sector
- Apollo Hospitals leads the sector with a market capitalization of approximately ₹98,646 Cr, establishing itself as the largest private hospital network in India.
- Max Healthcare closely follows, boasting a market capitalization of around ₹97,820 Cr.
- Fortis Healthcare is another key participant in the market, with a market capitalization of ₹48,249 Cr.
- Global Health also ranks among the premier healthcare institutions, holding a market capitalization of ₹28,786 Cr.
- Narayana Hrudayalaya is recognized for its cost-effective cardiac care services and maintains a notable market share with a market capitalization of ₹26,086 Cr.
In this report, we will conduct an in-depth analysis and comparison between two of India’s leading healthcare providers, Apollo Hospitals and Narayana Hrudayalaya. This comprehensive evaluation will assess their technical and fundamental aspects,
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Company Overviews
Apollo Hospital
Apollo Hospitals was founded in 1983 by Dr. Prathap C Reddy, a visionary in the evolution of modern healthcare in India. As the first corporate hospital in the country, Apollo Hospitals is celebrated for leading the charge in the private healthcare transformation.
Today, Apollo Hospitals stands as Asia’s leading integrated healthcare services provider, boasting a strong footprint throughout the healthcare landscape. This includes a diverse range of services such as hospitals, pharmacies, primary care and diagnostic clinics, as well as various retail health models.
Narayana Hrudalaya
Narayana Hrudayalaya Limited is involved in providing medical and healthcare services both in India and abroad. It functions through two main divisions: Medical and Healthcare Related Services, and Others. The organization is responsible for acquiring, owning, and managing a variety of healthcare facilities, including hospitals, clinics, health centres, diagnostic centres, and nursing homes, among other related operations. Its range of services encompasses cardiology, cardiac surgery, nephrology, urology, neurology, neurosurgery, endocrinology, orthopaedics, internal medicine, obstetrics, gynaecology, pediatrics, neonatology, gastroenterology, and oncology. Additionally, the company is active in the health insurance sector. Established in 2000, its headquarters is located in Bengaluru, India.
Technical Analysis
Apollo Hospitals
- The stock faced a significant obstacle near the 5,800 level, resulted in a steep drop.
- It later found support around 3,500 and rebounded.
- Following an extended period of consolidation, the price developed a Rounding Bottom pattern.
- A breakout ensued, leading to a price increase, but it encountered resistance close to 6,800, which triggered a pullback to the breakout point.
- Following a successful retest, the price surged past the previous high, reaching a new peak at 7,545.
- However, due to prevailing negative market sentiments, the price has since retraced and is currently trading just above its immediate support zone.
- Narayana Hrudalaya
- The stock price is overall in an uptrend.
- After reaching an all-time high close to the 1,445 level, the price experienced a decline and has since entered a consolidation phase.
- A Symmetrical Triangle pattern has formed on the chart.
- We expect an upward breakout from this pattern, which could lead to a significant price rally.
Relative Strength
The chart reveals that both Apollo and Narayana Hrudayalaya have underperformed the Nifty Healthcare index. Although Apollo has given a descent 31% return, Narayana lagged significantly, yielding a modest 17% return. In contrast, the Nifty Healthcare index delivered an impressive 41% return.
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