Apollo Hospitals- A game changing formula
Monopoly over Indian healthcare ecosystem
India is getting old faster!
It took 80+ years for France & Sweden in doubling of its older population (60 years+) from 7% to 14%, whereas it’s expected to happen in just 20 years in India. And by 2061, every fourth Indian would be 60 plus.
According to another study, your average per-person health expenditure as a share of GDP per capita skyrockets once you cross 50 years of age. It increases from 3% of your income when you are 25 years to ~8% at 60 & then to ~16% at 80+ years of age.
As per the Census 2011, 70% of older persons live in rural areas. Life expectancy will increase, for females from 69.4 in 2011 to 79.7 in 2061 and for males from 66.0 in 2011 to 76.1 in 2061. Old women will outnumber old men, and many of them will be widows.(IMPR)
As per IMPR research, south India is greying faster compared to north India & shall require young hands to keep its institutions running, maintain economic productivity, and most importantly, for taking care of the elderly, while the north-central region will have high, and in all probability surplus, young working age population.
Big picture; why Apollo?
Biggest hospital chain in India: If you are from the northern part of India, you probably don’t know how big Apollo hospital chain in south India is. It has over 71 hospitals(all types) pan-India, far ahead of Fortis (at 2nd) which today stands at 26.
It has a strong presence in cities like Chennai, Banglore & Hyderabad which have been expanding so rapidly (all being IT hubs) with populations increasing. Apollo is slowly increasing its presence in a big way in cities like Gurugram, where it recently acquired a big hospital for Rs 450 crores at a prime location(Golf course road), adding its bed capacity by 650 beds.
Apollo 24x7: This is India’s largest Omni-channel healthcare platform where Apollo leverages the physical network of its hospitals, doctors, care centers & pharmacy network with over 1.7 Cr people registered & ~35,000 transactions happening each day (as of June 2022). No other hospital chain in India has been successful in this, despite spending crores of money on digital (triggered by covid 19 obviously). Investment news & strategic partnership from Amazon & other investors should complete as Apollo looks to unlock value in it
One Apollo strategy- From hospitals to pharmacies, from diagnosis to digital, Apollo has got you everything. Their strategy to create a whole ecosystem around the daily lives of humans is commendable & if they get to keep getting successful in building their brand successfully, the share price shall multiply itself multifold
Few more interesting points-
Hospital chains can’t be built in a day, but the digital platform can be. Technology is always disruptive, introducing its own set of opportunities & threats; esp in healthcare where the scope of disruption is very high. Apollo has to get it right on the digital front till now. But apparently, the picture is a mixed bag as it has got over 1.7 crore people on its digital platform, increasing its cash burn to get more people on its platform. Converting its registrations into billable customers (currently ~35k/day) is the key here.
The Amazon news has been buzzing on the deal street for months now. Any update on that front shall be a trigger in the short term for its share price; no update on that front shall be a continual disappointment.
Can Apollo make it big? We shall get an answer in the coming years.
That’s it for now. See you in the next post!
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Disclaimers-
Personal & client investment/interest in the shares exist; this isn’t investment advice; DYOR (do your own research) is recommended; Investing & trading are subject to market risk; the Decision maker is responsible for any outcome