Strong runway seen for Indian hospitals as capacity increases expected to meet rising demand: Report
New Delhi, June 28
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
Reader Comments
As someone working in healthcare, the 45% ARPOB growth concerns me. Are we just chasing profits? Yes, private sector has better infrastructure, but we need to ensure treatment costs don't skyrocket. The government must regulate pricing, otherwise this 'growth' will just mean higher bills for patients. 😕
Excellent! India becoming a top medical tourism destination is a huge opportunity. Our doctors are world-class, and costs are much lower than in US/UK. The streamlined visa processes mentioned in the article will help. But we must ensure quality standards remain high across all these new hospitals—not just the well-known chains.
The concern about oversupply is misplaced because of low insurance penetration—that's a key point. But what about the quality? 54% capacity expansion sounds impressive, but we need more trained nurses and doctors too. Empty beds with no staff won't help anyone. Also, the unorganised sector losing market share might leave rural areas with fewer options. 🤔
Finally some positive news for the healthcare sector! 🙌 The brownfield expansion (63%) is smart—faster breakeven means better returns, which should attract more investment. I just hope the CGHS tariff revision and CCI order don't create bureaucratic delays. Overall, this looks promising for patients and the economy both!
The bit about 'CONGO-R' contributing 68% of the market is interesting—so complex treatments will drive growth. That's good for specialised hospitals, but what about primary care? We need
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