Tag: Medanta

Indian healthcare system needs to focus on “forgotten middle” to cover all grounds: Medanta MD Trehan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Managing Director of Medanta, Dr Naresh Trehan highlighted that the introduction of Ayushman Bharat scheme has been a mammoth relief for more than 5 crore beneficiaries. He stressed on the need to create innovative models for the “forgotten middle” in order to cover every nook and cranny of the healthcare system.

Speaking exclusively to CNBC-TV18, Trehan shed light on how each year 2-4% of Indians above the poverty line were pushed below poverty line because of the burden of healthcare.

Praising the government, Trehan stated, “We are growing at 25 million people a year. That means one Australia added to our economy or population. So, the challenge is huge and I think that the steps taken by the current government in introducing the Ayushman scheme has been a huge relief.”

Trehan added that India needs to find a path to provide health security to every citizen. Apart from 50 crore Ayushman beneficiaries, a large number of people who are a part of the government system or security system are provided health security through schemes like Ex-Servicemen Contributory Health Scheme (ECHS) or Central Government Health Scheme (CGHS). 

He added that some state governments also provide insurance covering basic healthcare for its citizens. Also, the penetration of private insurance has also increased from 3% to sub-20% in the last 10 years. 

Stressing on the improvement in the Indian healthcare system, Trehan said, “People used to travel from India to New York for me to operate on them and now people are traveling from all over the world to India to be operated on. So there is a huge upside for us as far as healthcare is concerned.”

Additionally, Medanta Group’s MD also emphasised the monopoly of a few companies in the production of high-end diagnostic and therapeutic equipment. However, Trehan reckons that India possesses the capability to become self-sufficient in production of these high-end machines.

He said, “For instance, I buy a radiation machine for ₹35 crore and you tell me seven years later, the (machine’s) end of life is approaching and we cannot service it anymore. It means that you are actually captive to those people. Now, that’s the highest end, when will we get there from India to that level, we do have the capability eventually to work towards that.”

He stressed that healthcare may seem expensive, however, the inputs required to deliver different levels of medicine cannot be negated.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

DLF to buy residual stakes in entities owning 63 acres land in Gurugram for Rs 40 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Realty major DLF will acquire residual stakes in certain entities that own 63 acres of land parcels in and around Gurugram for around Rs 40 crore. DLF acquired development rights for these land parcels in 2009-10.

In a regulatory filing on Tuesday, DLF said the finance committee of its board has approved the acquisition of around 5.22 percent shareholding in Invecon Pvt Ltd and 4.48 percent and 3.24 percent shareholding in its affiliates namely Vikram Electric Equipment and Uni International, respectively. These entities are collectively referred to as ‘land-owning companies’.

The land-owning companies collectively hold around 63 acres of land parcels in and around Gurugram, for which the company already has existing agreements. DLF said it is executing definitive agreements with the sellers and the land-owning companies along with its six other affiliates.

After execution, these land-owning companies and six affiliates would become subsidiaries of the company. The consideration for these residual stakes is around Rs 40 crore. The deal will conclude within 180 days of the execution of the definitive agreements with the sellers.

DLF also gave an update related to its earlier announcement to develop a 400-bed multi-specialty hospital in Delhi in partnership with Medanta.

The finance committee of the board gave approval to enter into, execute and perform definitive agreement(s) through the company or its subsidiary with Global Health Ltd (GHL) to establish a special purpose vehicle to construct, operate and manage super specialty hospitals in the national capital.

The company and GHL, which operates under the Medanta brand, would subscribe to a 50 percent stake each in the special-purpose vehicle.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Medanta operator Global Health rises as Motilal initiates coverage on stock, cites multiple growth levers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Medanta hospital chain operator Global Health rose over 3 percent in early trade on Thursday, September 28, as domestic brokerage Motilal Oswal initiated coverage on the stock with a ‘Buy’ rating and target price of Rs 840, which signals an upside potential of 21 percent from the current market levels.

Global Health stock rose 3.15 percent to hit a day’s high of Rs 717 against the previous closing price of Rs 695.1 on the NSE. The stock has risen 72 percent in a year and gained 55 percent so far in 2023.

Considering the company’s strong business prospects with healthy execution skill set, strong brand recall, and growth visibility in near future, analysts at Motilal model a 10 percent premium to Medanta as against an industry average of 21 times.

According to Motilal, Medanta has multiple ‘firsts’ in its kitty as it has ventured into the uncharted hospital territory successfully. It was the ‘first’ to set-up a large-scale, super-specialty and single-location private hospital at Gurugram in CY09. It was also the ‘first’ private company to undertake Greenfield capex for super-specialty hospital at Lucknow (catering to central UP) and Patna (catering to eastern UP/western Bihar) cities.

The hospital chain has scaled up the developing hospitals significantly to achieve breakeven in the first year of their operations as against an industry timeline of 2 to 3 years.

Further, Motilal said that Medanta’s organic bed capacity expansion plan is already in place until FY28, providing robust visibility of volume-led earnings growth over the next five years.

Overall, the brokerage expects the company’s sales, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and PAT (profit after tax) to register a 14 percent, 17 percent, and 26 percent CAGR (Compound Annual Growth Rate) over FY23-25 to Rs 3,500 crore, Rs 850 crore, and Rs 520 crore. This would enable the return on equity (ROE) to expand 120 basis point to 17.3 percent over FY23-25.

The company also had a cash surplus of Rs 500 crore as of FY23, providing scope for inorganic opportunities.

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This brokerage firm foresees EBITDA growth in hospitals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Renowned brokerage firm Kotak Institutional Equities has recently turned its spotlight on a particular metric that is often overlooked when evaluating the health of healthcare institutions: per bed profitability. This novel approach aims to shed light on the financial performance of hospitals by examining the growth in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) concerning the number of occupied beds. The question they seek to answer is: how much EBITDA does each occupied bed generate?

According to Kotak Institutional Equities, analysing EBITDA per occupied bed provides a more insightful perspective on the improvement in core profit, especially when considering the impact of bed expansion. By delving into this metric, they hope to offer a comprehensive view of hospital performance and potential investment opportunities.

Kotak Institutional Equities has put forth its estimates for EBITDA per occupied bed, spanning the financial years 2023 to 2028. These projections offer valuable insights into the expected growth rates of various hospitals. It’s anticipated that most hospitals will report a compounded annual growth rate (CAGR) ranging from 8 percent to 10 percent per occupied bed.

Rainbow Childrens Medicare, however, emerges as an outlier with a projected growth rate of around 3 percent, making it one of the lowest performers in this analysis. On the opposite end of the spectrum, Krishna Institute of Medical Sciences (KIMS) is expected to shine with a CAGR of 10 percent, making it one of the highest performers. Meanwhile, Max Healthcare Institute Limited is forecasted to report a robust 9 percent growth rate, while Apollo Hospitals Enterprises, Narayana Hrudayalaya, and Aster DM Healthcare Ltd are all expected to fall within the 8-9 percent range.

In response to their analysis, the brokerage firm has taken specific actions concerning their recommendations for investment in healthcare stocks.

The brokerage firm has downgraded Aster DM from a ‘buy’ rating to ‘add’. However, it’s worth noting that the target price for Aster DM remains higher at around Rs 355, suggesting that there is still growth potential, albeit at a slightly more conservative level.

Kotak Institutional Equities has downgraded KIMS from a ‘buy’ to ‘reduce’. Yet, the target price for KIMS stands at Rs 2,020, indicating that despite the downgrade, the stock still has value in their estimation.

The brokerage firm has issued a ‘reduce’ call for both Rainbow and Narayana, implying a more cautious outlook for these stocks.

Kotak Institutional Equities maintains a ‘buy’ recommendation for Apollo Hospitals, indicating their confidence in its growth prospects. They also suggest adding Medanta to the portfolio, giving it an ‘add’ rating.

For more details, watch the accompanying video.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Medanta, DLF to develop a 400 bed multi-specialty hospital in Delhi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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One of India’s prominent private multi-speciality tertiary care providers, Global Health Limited (Medanta) and leading real estate developer, DLF Group, on Thursday announced a partnership to launch a 400-bed multi-super specialty hospital. To implement their upcoming project in Delhi’s Greater Kailash I, a new company will be formed with both entities having equal shareholding.

As per the press release, DLF will be a strategic investor in the project whereas Medanta will have the operational control.

“The super speciality hospital is slated to provide cutting-edge medical and surgical interventions in over 20 super specialities, including Cardiac sciences, Neurosciences, Orthopaedics, Kidney, Liver, Lung and Heart Transplants, Gastroenterology and Chest Surgery. The facility will also have a Comprehensive Cancer Care unit, offering end-to-end oncology treatments under one roof.”

“Our new hospital will bring the best of Medanta’s renowned clinical expertise and patient care closer to the people of Delhi. It will offer cutting-edge surgical treatments across specialties under one roof with the same patient quality safety standards that Medanta has come to be known for. It will also become a one-stop solution for all types of cancer treatments and will benefit a large swathe of patients not only in Delhi but across Uttar Pradesh, Haryana, Rajasthan and other neighbouring states,” Dr. Naresh Trehan, Chairman and Managing Director of Global Health Limited said.

Medanta is founded by Dr. Naresh Trehan, a well-known cardiovascular and cardiothoracic surgeons of India.

“The new hospital will strengthen the medical infrastructure in Delhi and further strengthen DLF’s deep commitment to improving the quality of life for NCR residents,” said Rajiv Singh, Chairman of DLF said. 

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Here is why hospital stocks like Global Health declined in today’s trading session

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The district administration of Gurugram, Haryana, has directed the Medanta Medicity and Fortis Hospital to reserve 20 percent beds for the patients from poor families, as per the initiatives taken by the state government.

The authorities have directed the hospitals to provide 20 percent of beds to the patients belonging to economically weaker section (EWS) and below poverty line (BPL) categories.

Following the direction of the Gurugram district administration, shares of Medanta parent Global Health Ltd dropped over 4 percent in intraday trade on Monday.

According to the IANS report, these hospitals have got lands at concessional rates from the Haryana Shahari Vikas Pradhikaran (HSVP) and hence they should abide by the initiative taken by the state government for the poor people.

Officials have stated that Medanta and Fortis hospitals will have to set up dedicated counters for the BPL and EWS families. Further, these counters will have representatives from the Health Department, on behalf of the state government.

The treatment of the patients from EWS and BPL categories will be free if the total bill amount is upto Rs 5 lakh.  The patients will have to pay only 10 percent if the bill amount is between Rs 5 lakh to 10 lakh, and only 30 percent of cost will be charged when the bill amount is above Rs 10 lakh.

People holding Ayushman Bharat, Chirayu Card and BPL Card can also directly avail treatment at these hospitals.

Medanta has over 2,500 beds across five cities, while in Gurugram, it has 1,391 beds and 271 ICU beds. Max Healthcare has a capacity of over 3,400 beds and runs the Max Hospital in Gurugram. The company is looking to acquire land parcels in Gurugram with a potential to add another 1,000 beds.

Such deal terms are generally known when agreements are signed with the government for government allotted land. Feedback also suggests that the Gurugram policy is around 3-5 months old and companies like Fortis are complying with this.

Shares of Global Health are trading 3.8 percent lower at Rs 507.

(With Inputs From Agencies.)

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

JM Financial is bullish on these pharma stocks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The pharmaceutical sector has been very active lately, largely due to regulatory and compliance newsflow. This means that companies are making significant efforts to comply with new regulations, leading to a lot of activity in the industry.

While speaking to CNBC-TtV18 about the current trends in the pharmaceutical sector, Cyndrella Carvalho, the VP-Healthcare/Pharma Lead at JM Financial recommends Sun Pharma and Dr Reddy’s Laboratories as good long-term investments.

When asked about which large-cap companies she prefers, Carvalho stated that she has a preference for Sun Pharma and Dr Reddy’s Laboratories. These companies are among the largest in the industry, and they have a strong track record of success. According to Carvalho, they are both good long-term bets for investors.

“We prefer Sun Pharma and Dr Reddy’s Laboratories (DRL) from our large cap picks. And from the perspective of the mid ones, we like Ipca Laboratories at this point in time,” she said.

She also prefers Biocon from the biosimilar segment.

“On the biosimilar side, we have Biocon which we are looking at this price given the price correction.”

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Carvalho also spoke about the diagnostics and healthcare sectors, stating that she has seen a price correction in both of these areas. This could make them more attractive for investors who are looking for undervalued opportunities.

“Coming to the other segments like the diagnostics and healthcare also, we’ve seen a lot of price correction. And we are looking at the Dr Lal Pathlabs and Metropolis in terms of our picks over there,” she added.

Finally, Carvalho mentioned that her firm recently initiated coverage on Medanta, a major hospital chain in India. According to Carvalho, Medanta is a strong player in the healthcare space, and investors should consider it as a potential investment opportunity.

“On the hospital side, we’re looking at Medanta. Basically, that’s what we have initiated recently,” she mentioned.

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According to Vinit Sambre, Head-Equities, DSP Investment Managers, the pharma sector is facing some headwinds in international markets, leading to a correction in valuations. However, the non-discretionary nature of the demand for pharmaceutical products presents a unique investment opportunity for investors. By carefully selecting companies with a strong track record of performance and solid fundamentals, investors can benefit from the stability and potential returns of the pharmaceutical sector.

“This is a good time to have a contra view on the pharmaceutical sector because the demand is almost non-discretionary in nature. Having slightly longish horizon for the sector, one can look at allocating capital to this sector,” he said.

Also Watch: Vinit Sambre, Head-Equities, DSP Investment Managers in interaction with CNBC-TV18

For more details, watch the accompanying video

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The Medicine Box | Here’s why hospitals are bullish on the prospect of medical tourism

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Apollo Hospital” isinid=”INE437A01024″ bseid=”508869″ nseid=”APOLLOHOSP” sector=”Hospitals & Medical Services” exchange=”nse”]

Hospitals are bullish on the prospect of medical value travel or medical tourism. Initiatives such as ‘Heal In India’ by the government will add impetus as it is expected to increase transparency. Indian hospitals have the advantage of not only clinical skills and cost but softer skills such as proficiency in English. Here is what the top hospital heads of Medanta, Fortis and Apollo Hospitals had to say on medical value tourism.

While speaking to CNBC-TV18’s Ekta Batra, Dr Naresh Trehan, Chairman and MD of Medanta said before COVID-19, around 12 percent patients were international. However, it fell to 3-4 percent and now rising again.

He further added that medical tourism recovery is much faster. The biggest bottleneck has been visas — pending visas have been issued. There are around 140 visas waiting in Iraq to come.

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According to him, government schemes have helped trigger medical tourism and India has a huge future when it comes to the same, adding that India has the highest level of care across all specialities. India provides quality, cost effective services and is more universal in English versus other countries. India has a good image and is improving, he said.

Meanwhile, Dr Ashutosh Raghuvanshi, MD and CEO of Fortis Healthcare, said medical tourism is around 10 percent of sales. He expects it to rise to 12-15 percent in the next 1.5 to 2 years.

According to him, Heal In India will bring transparency in interactions. However, one of the challenges is general infrastructure in healthcare.

While Apollo Hospitals’ MD Suneeta Reddy said medical value tourism should be around 7 percent of sales in FY23E (estimated). According to her, medical value tourism on absolute basis has risen 19 percent from 2020 and the potential for medical value tourism can go to 20 percent of sales.

Apollo Hospitals will be a big player in Medical tourism due to its locations, she said.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The Medicine Box | Have healthcare norms changed post COVID-19?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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What has changed after COVID-19 in healthcare? Consumers are more conscious and aware about their health and there is greater insurance penetration. In this CNBC-TV18 special series, The Medicine Box, Dr Naresh Trehan, Chairman and MD at Medanta; Dr Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare; and Suneeta Reddy, Managing Director of Apollo Hospitals, share the key post-pandemic trends they spotted in the healthcare sector.

Dr Trehan said that during the devastating Delta wave, people with co-morbidities were the most vulnerable. And this led to more people seeking preventive care post-COVID-19.

Also Read: Dr Naresh Trehan explains why 20-25% margin is ideal in healthcare sector

Raghuvanshi also noted that more and more people in India are now getting health insurance because of increasing awareness of how healthcare costs can be devastating for a family.

COVID-19 has taught people that things can change quickly, he said.

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The Apollo Hospitals stock has risen nearly 25 percent in the last six months, though it has fallen 10 percent during the past year.

In November, broking firm UBS said that it believed that the market will be surprised by Apollo Hospitals’ success on multiple fronts. Therefore, it upgraded the shares of the hospital chain to a ‘buy’ from ‘neutral’ earlier. The firm also raised its price target on Apollo Hospitals to Rs 5,600.

Speaking to CNBC-TV18, Reddy said that people are more conscious and there is greater insurance penetration post COVID-19.

Also Read: Apollo Hospitals targeting occupancy level of 70%, says Suneeta Reddy

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dr Naresh Trehan explains why 20-25% margin is ideal in healthcare sector

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Global Health” isinid=”INE474Q01031″ bseid=”543654″ nseid=”MEDANTA” sector=”Hospital & Healthcare Services” exchange=”nse”]

Global Health Ltd, which operates hospitals under the Medanta brand, is focusing on making healthcare as reasonable as possible, said Dr Naresh Trehan in an interview with CNBC-TV18 and added that for doing so a 20 to 25 percent margin is ideal.

Talking from his flagship hospital Medanta Medicity in Gurugram, Dr Trehan explained, “The pricing has to give enough that you can renew yourself, you can pay back your debts, and also leave enough margin for growth. So, putting this together I think around 20 to 25 percent is the ideal margin which you should have in healthcare because I always say it is not a business, it’s a business with a soul.”

He further added that by principle they don’t want to be the most expensive in the market, no matter how good their facilities are.

“We want to make it as real as reasonable as possible,” he said.

Read Here: Fortis Healthcare expects occupancies to grow as international patients rise above pre-pandemic level

Dr Trehan pointed out that India is a growing hub for medical tourism with the country providing quality and cost-effective services. However, the biggest bottleneck for international patients has been visa issues.

“As we speak today, over 140 visas waiting in Iraq to come. The other thing is that the Prime Minister has announced two schemes now ‘Heal in India’ and ‘Heal by India’. That also has triggered all the services. So I think that India has a huge future for actually serving,”

Watch the video for more.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow