Last Updated on November 4, 2023 by BFSLTeam BFSLTeam
Healthcare in India is an ever-evolving sector that presents promising investment opportunities. Powered by innovations and AI-led research and development techniques, the healthcare sector has grown leaps and bounds with India becoming a global player in this segment. Through this investor’s guide we will explore the current state of the healthcare industry in India, discuss its future prospects, and understand the benefits of investing in this sector. By the end of it, you will be well equipped with the knowledge and insights needed to make informed decisions that align with your financial goals.
Table of Content
- 1 History Of Healthcare Sector in India
- 2 List of Top 10 Healthcare Stocks
- 3 List of Top 10 Healthcare Stocks – Expanded Overview
- 4 Current Performance Of Healthcare Sector in India
- 5 Future Outlook Of Healthcare Sector in India
- 6 Advantages of Investing in the Healthcare Sector
- 7 Challenges of Investing in the Healthcare Sector:
- 8 Frequently Asked Questions (FAQs)
History Of Healthcare Sector in India
Ancient practices like Ayurveda and Unani formed the foundation of healthcare practices in India. While these ancient traditions still remain popular, the country’s transition into the modern era led to a significant shift in healthcare practices and landscape. The establishment of institutions such as the All India Institute of Medical Sciences (AIIMS) in 1956 marked a pivotal moment in India’s march towards modern healthcare.
India’s healthcare landscape boasts several noteworthy milestones. The launch of the National Rural Health Mission (NRHM) in 2005 was a game-changer. This mission aimed to provide accessible and affordable healthcare to rural India, addressing the healthcare divide. More recently, the Ayushman Bharat scheme, introduced in 2018, has emerged as one of the world’s largest healthcare initiatives. It seeks to provide health coverage to over 100 million families, promising to revolutionise healthcare accessibility across the nation.
India’s healthcare sector has become a balanced mix of public and private enterprises that encompasses a wide spectrum of healthcare services, spanning primary care, specialised treatments, and cutting-edge research. Some companies, though, have emerged as leaders in their fields and offer lucrative prospects to investors like you.
List of Top 10 Healthcare Stocks
| S.No. | Company Name | Market Cap (in Cr) |
| 1. | Apollo Hospitals Enterprise Ltd | ₹ 71,454.5 |
| 2. | Max Healthcare Institute Ltd | ₹ 56,142.8 |
| 3. | Fortis Healthcare Ltd | ₹ 24,539.9 |
| 4. | Narayana Hrudayalaya Ltd | ₹ 20,783.5 |
| 5. | Dr Lal Pathlabs Ltd | ₹ 20,386.7 |
| 6. | Global Health Ltd | ₹ 20,129.2 |
| 7. | Aster DM Healthcare Ltd | ₹ 16,511.4 |
| 8. | Krishna Institute of Medical Sciences Ltd | ₹ 15,004 |
| 9. | Poly Medicure Ltd | ₹ 12,515.5 |
| 10. | Rainbow Children’s Medicare Ltd | ₹ 11,280.4 |
List of Top 10 Healthcare Stocks – Expanded Overview
1. Apollo Hospitals Enterprise Ltd
Dr. Prathap C Reddy is often referred to as one of the pioneers of modern healthcare in India. In 1983, he founded Apollo Hospitals that now has a vast network of over 73 hospitals, 10K+ beds, and more than 5K pharmacies. Apollo Hospitals provides comprehensive healthcare services from multi-specialty care to diagnostics, pharmacies, primary care, and telemedicine. With a market capitalisation in excess of ₹ 71,450 Cr , the company is the largest company (by m-cap) in the healthcare sector in India and is reported to be visited by patients from over 140 different countries.
Additional Read: Apollo Hospitals Share Price
Max Healthcare Institute Ltd
Max Healthcare is a prominent healthcare service provider in India, with a history dating back to the year 2000. They manage a network of 17 medical centres, boasting a total of over 3,500 beds. What sets Max Healthcare apart is its reputation for delivering cutting-edge medical services across a wide spectrum of specialties, including heart care, neurology, orthopaedics, and comprehensive maternal and child healthcare.
Also Read: Max Healthcare Share Price
Fortis Healthcare Ltd
Established in 2001, Fortis Healthcare Ltd is a recognized name in Indian healthcare. The company operates 28 healthcare facilities with 4500+ beds across 10 cities in the country, offering a broad spectrum of medical services. Fortis Healthcare doesn’t just stop at hospitals; they also run over 400 diagnostic centres in India, Nepal, Sri Lanka, and the UAE. Their reputation shines in clinical services, medical research, and education. Fortis is an expert in critical care and offers specialised care in fields like heart health, cancer treatment, and bone and joint issues. Fortis is now part of IHH Healthcare Berhad, a global healthcare provider headquartered in Malaysia.
Additional Read: Fortis Healthcare Share Price
Narayana Hrudayalaya Ltd
Headquartered in Bengaluru, Narayana Hrudayalaya Ltd was founded in 2000 and quickly became a prominent player in India’s healthcare industry, focusing on affordable healthcare solutions. With 24 hospitals, 19 primary care facilities and seven heart centres in its network (including one in the Cayman Islands)d, the company is a leader in cardiac care, solid organ transplantation, and paediatric surgeries. Narayana Hrudayalaya, through close to 6K operational beds, serves both domestic and international patients.
Additional Read: Narayana Share Price
Dr Lal Pathlabs Ltd
With a history dating back to 1949, Dr. Lal Pathlabs Ltd is one of India’s oldest and most trusted diagnostic and pathology chains. The company operates more than 200 clinical laboratories, over 3,000 patient service centres, and offers an extensive test menu, playing a vital role in providing accurate and timely diagnostic services. It has developed a vast pan-India network of 15000+ touch points for collections and access to diagnostic services.
Additional Read: Dr Lal Pathlabs Share Price
Global Health Ltd
The famous surgeon, Dr. Naresh Trehan laid the foundation of Global Health Ltd that operates under the Medanta Hospital banner. With a capacity close to 3K beds, it is one of the largest healthcare providers in the Northern and Eastern regions of India. With a total of five hospitals and six mediclinics, the company focuses on creating a chain of advanced multi-specialty healthcare facilities. Global Health Ltd took the IPO route to become a public listed company in Nov, 2022.
Additional Read: Global Health Share Price
Aster DM Healthcare Ltd
Aster DM Healthcare Ltd is an established healthcare conglomerate with a presence in nine countries. Founded in 1987 with its headquarters in Dubai, UAE, the Bengaluru registered company boasts a regional network of 25 hospitals, 116 clinics, and 233 pharmacies. The organisation is known for its comprehensive medical services and patient-centric care and is widely present in the Middle East, South India, and even the Philippines. Recently, the company signed a joint digital transformation and clinical research agreement with Novartis, a multinational pharmaceutical corporation.
Additional Read: Aster DM Share Price
Krishna Institute of Medical Sciences Ltd
Krishna Institute of Medical Sciences Ltd, founded in 1974, is a renowned regional healthcare institution in the states of Maharashtra, Telangana, and Andhra Pradesh in India. KIMS Hospitals operate 12 multi-specialty hospitals with a combined capacity of around 4K beds. The company covers over 25 specialties and super specialties with a focus on tertiary care services. Lately, they have been involved in several acquisitions to expand their hospital network with almost one-third of their current bed capacity launched in less than the last five years.
Additional Read: Krishna Institute Share Price
Poly Medicure Ltd
Poly Medicure Ltd is a pioneering medical device manufacturer established in 1995. The company had the distinction of being the largest exporter of medical devices from India in six successive years. Poly Medicure has five manufacturing facilities in India and three overseas. The company specialises in the production of disposable medical equipment such as intravenous access and infusion therapy devices, contributing significantly to the healthcare sector.
Also Read: Poly Medicure
Rainbow Children’s Medicare Ltd
With their first hospital established in 1999, Rainbow Children’s Medicare Ltd is a relatively new entrant to the Indian stock exchanges (IPO listed on the bourses in May 2022). It is a paediatric healthcare specialist brand that operates a chain of dedicated children’s hospitals and offers a range of paediatric services, including neonatology, paediatric cardiology, and general paediatrics. Presently, the company operates 16 hospitals and 3 clinics across six cities in India with a combined bed capacity of over 1500 beds.
Additional Read: Rainbow Childrens Medicare Share Price
Current Performance Of Healthcare Sector in India
The healthcare sector in India has been on a transformative journey, driven by several key factors that have shaped its current performance. At present, the sector finds itself in a dynamic state of growth and innovation.
- Telemedicine Revolution: The COVID-19 pandemic accelerated the adoption of telemedicine in India. Telemedicine offers remote healthcare online and has become a platform for several digital health startups (remote consultations, e-pharmacies, etc.) in the country.
- Hospital Chains and Specialised Care: Hospital chains like Apollo, Fortis, and Max Healthcare have continued to expand their reach, providing specialised care and modern facilities. They have established themselves as trusted names for complex medical procedures and treatments.
- Medical Tourism: India has the ideal combination of skilled medical professionals, advanced technology, and cost-effective healthcare services. Therefore, the country has become a popular hub for medical tourism for patients from around the world, especially the nearby Asian countries.
Future Outlook Of Healthcare Sector in India
The future of the healthcare sector in India appears promising and is filled with opportunities and challenges.
- Advanced Healthcare Technologies: Advanced technologies such as artificial intelligence will enhance the accuracy of diagnostics and treatment, making healthcare more efficient and accessible, thereby giving a boost to the sector.
- Health Insurance: The penetration of health insurance is projected to increase, providing financial security to more Indians. Naturally, this will give a larger number of customers to associated healthcare companies.
- Preventive Healthcare: Improved financial literacy and higher purchasing power has created a higher awareness of the importance of preventive healthcare in India. This has led to a surge in demand for wellness and lifestyle-related services opening up investment opportunities in companies focusing on fitness, wellness, and nutrition.
Advantages of Investing in the Healthcare Sector
- Steady Demand: Healthcare is a fundamental need, and the demand for healthcare services and products tends to remain consistent, even during economic downturns.
- Demographic Trends: Ageing populations in many countries drive increased healthcare demand, creating long-term growth opportunities for the sector.
- Innovation: The healthcare sector continually advances through research and development, offering opportunities for companies to create breakthrough medical technologies and treatments.
- Global Reach: Healthcare is not limited by national borders. Many healthcare companies have a global presence, providing diversification and exposure to various markets.
- Defensive Nature: Healthcare stocks often exhibit defensive qualities, meaning they can perform relatively well during market downturns, making them a potential hedge against economic volatility.
- Evolving Technologies: The integration of technology, such as telemedicine and wearable devices, is reshaping healthcare delivery and creating investment prospects in the digital health sector.
Challenges of Investing in the Healthcare Sector:
- Regulatory Risks: Stringent regulations and compliance requirements in the healthcare sector can lead to unexpected challenges and increased costs for companies.
- Research and Development Costs: Companies invest crores of Rupees to develop new drugs, medical devices, and treatments. This can be a costly exercise without any guarantee of success.
- Market Competition: The healthcare sector is highly competitive, and emerging companies face challenges in establishing themselves against well-established players.
- Technological Disruption: The rapid pace of technological change can disrupt traditional healthcare models and create uncertainties for investors.
- Political and Healthcare Policy Impact: Government policies and healthcare reforms can significantly affect the sector, causing volatility in stock prices.
- Ethical and Social Responsibility Concerns: Ethical issues surrounding healthcare practices and pricing, as well as social responsibility, can impact a company’s reputation and market performance.
As you can see, the healthcare sector in India offers an abundance of investment choices. However, like with any investment you should be fully aware of the risks involved before making a financial decision. Always conduct your own research on the industry and the company you plan to invest in. Or, you can always consult a reputed financial advisor to help you in this endeavour.
Frequently Asked Questions (FAQs)
The healthcare sector offers diverse growth opportunities. Areas of growth include telemedicine (ability to deliver healthcare services remotely), pharmaceuticals, biotechnology, medical devices, and healthcare IT. Moreover, the ongoing integration of artificial intelligence (AI) and data analytics is transforming the sector by enhancing diagnostics and offering personalised treatment.
If you’re seeking lower-risk healthcare investments, you can consider healthcare-focused exchange-traded funds (ETFs) or established, dividend-paying healthcare companies. Healthcare ETFs provide diversified exposure to the sector, reducing the risk associated with individual stocks. Established companies with a history of paying dividends can offer a more conservative approach, as they are more stable and less prone to market volatility.
You should start by assessing the company’s financial stability. Pay attention to factors like revenue growth, profit margins, and debt levels. Next, examine the company’s current portfolio and scope for future revenue streams. The quality of management also plays a crucial role in the company’s adaptability to changing healthcare trends and shifts in healthcare policy.
Absolutely, healthcare-related technology, including health informatics, is a thriving sector. The increasing digitization of healthcare and electronic health records creates significant opportunities for tech companies. Health informatics, in particular, plays a pivotal role in managing and analysing healthcare data, enhancing patient care, and streamlining administrative processes. The growing reliance on data-driven decision-making in healthcare positions these technologies for continuous growth.
Global healthcare trends can significantly influence investment decisions. For instance, the emergence of global pandemics or the rise of new diseases can create investment opportunities in areas like vaccine development, diagnostic testing, and pharmaceuticals. Staying informed about these trends enables investors to pivot their portfolios and take advantage of changing market dynamics.
Government healthcare policies wield substantial influence on the healthcare sector. Changes in regulations and policy decisions can introduce uncertainty, affecting stock prices. For example, initiatives aimed at improving healthcare accessibility, reducing drug prices, or revising reimbursement models can impact companies differently. Monitoring policy changes and their potential impact is essential to make informed investment choices.
The healthcare sector offers various ethical and socially responsible investment options. Many investors are keen on supporting companies that align with their values, particularly in healthcare. For example, ethical investors may focus on companies committed to promoting affordable access to healthcare services, contributing to public health initiatives, or engaging in environmentally sustainable practices. Investing in such companies allows investors to blend financial returns with their ethical and social priorities.
