Key insights:

  1. Leading Indian hospitals are entering a phase of consolidation after adding significant capacity in recent years. There could be meaningful operating leverage as occupancy rises, translating into better margins and return ratios
  2. Key investor concern has been low ROCEs. However, this is not true. Older hospitals clock high margins and RoCEs while growing at a reasonable pace. It is investment in new hospitals/beds that have dragged down reported metrics.

Key Beneficiaries: Apollo Hospitals, Narayana Hrudayalaya

Key Risk- Adverse regulation such as price caps and state schemes participation

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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