Q1: Affordability of indian families are increasing and especially in metros where husband and wife both are working. There are value conscious parents who choses value services but I think India is under penetrated and Rainbow is positioned to take advantage of raising income and Value Migration and also penetration of Health Insurance.
Q2: Rainbow is not only operating large scale hospitals, they are also operating Spokes with 40-50 bed facilities in emerging areas of the cities, where their main focus is to capture outpatient and convert those patient when they have serious illness in to Inpatient. My personal experience is that who gives first dose of vaccination to child, that child becomes sticky patient to that hospital for several years at least 3-4 years till vaccination completes. However, we also visits small nearby paediatrician for little cold and fever but the main aim of these hospital is to attract Inpatient which contributed to 70% of the revenue. Out patient only contributed 30% of the revenue.
The main thesis behind Rainbow is how fast they expand beds and how fast they utilise the expanded beds with optimal operating margin and ROCE. I think Rainbow has done well in the past and will do well in the future also.
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