As you rightly pointed out, UK care markets are very matured ones with well established Govt. policies, framework and standards in place. In case of seniors, Care home expenses are funded by either Pensions, Govt. support(NHS), Private insurance, partly funded by self/ their children in some cases. And if you have no money to afford care, Govt will take care of you in their own facilities.
On the contrary, things are very different in India & not comparable with above scenario. I think to make a clear differentiation, Max need to create an “Affordable” ecosystem with holistic care and establish customer trust. Bring in best practises similar to that of any matured markets like Doctor/GP on call, Physiotherapy, Dietary requirement support, Medicines, necessary medical equipment’s, Qualified 24×7 Nurse, Carers etc to take care of day to day well being of seniors with varying challenges like mobility issues, Memory loss etc (I think they have already implemented few of these things into their existing projects).
From Q3 concall;
“For seniors who can’t be maintained at home because of aging-related issues in terms of mobility, medication, administration or monitoring or bathing, or have gone through an intense medical episode need to recuperate for some time, or people who come from outside the city or country who after surgery have to stay for a while, we offer the Care Home facility. This is more popularly called Assisted Living Outside India. And people who have cognitive neuro disorders, dementia, Alzheimer’s, Parkinson’s in early stages, we also offer Memory Care Home option. For those who require the same services in the convenience of their home, we offer through Care at Home, we offer things like critical care, physiotherapy, diagnostics, nurse at home, caregiver at home, pathology about 16 service lines. And if seniors require some products for their comfort and recovery like wheelchairs, hospital beds, air mattresses, respiratory equipment, we also offer it through our MedCare equipment vertical.”
About cost of senior care services & its affordability in India:
Better insurance penetration, higher retirement savings & disposable income, Govt policy support etc can help seniors in easily accessing these type of care facilities. Recently I had an interesting conversation with few friends settled abroad & not planning to return to India at the moment. Parents live in India & have own house, retirement corpus, rental income etc & not willing to move to foreign countries. Most of them said that they were exploring a system similar to assisted care for parents and willing to fund the cost from their pockets (moral obligations?). I assume Max may be focussing on these kind of income groups. In these days, there are many young population from India migrating & settling in foreign countries. These kind of changes in lifestyle & dynamics might bring more visibility to senior care space.
From Max India concalls, They are targeting families above 15L income group which itself explains why their care services are priced at a premium. I agree with your point that most of the other projects now run in India by other groups are “merely normal residential real estate projects with some added features for seniors”.
Reg. the senior living projects like in Doon – From management commentary, I think now they have learned their lessons from these Asset Heavy, low margin, Less revenue growth senior living projects. Management focus is more towards Care Home, Care at Home & Medcare sectors (3 verticals) where quick scale up might be possible in future. Even for the CHs, they are looking for building on lease/ Rent models & trying to remain asset light rather than being a capex heavy one. They also provide support in their CHs for the senior patients getting discharged from hospitals but still needs medical attention for few more days. This also helps the tied up hospitals in having a better bed turnover ratio.
As highlighted before, this sector is in a very nascent stage in India, but looks quite interesting to track & see how this unfolds in next 5 to 10 years. I am bit (over?)confident about the promoter group. I felt they are very honest in their disclosures, concalls & have a good track record of scaling up new businesses in past ++ margin of safety build up at the CMP. [Max Healthcare scale up is a good case study to explore. Present MD of Max India, Mr. Rajit Mehta spearheaded Max Healthcare growth from Inception in 2003].
Somewhere I read that Promoter is like a multiplication factor. No matter how good the sector /Business/ Financial ratios are, if the promoter is a chor then the overall value is zero.
I am from a Systems engineering/OT background & not from Healthcare sector. Just trying to explore & understand the senior care space. Thanks for all the support and collaboration. Cheers!
Sharing few links for reference:
Care home types in the UK:
https://www.carehome.co.uk/advice/types-of-care-home
Few funding news from Senior care space in India:
“I have been closely observing the trends in the emerging elder care space both globally and specifically in India. I believe the elder care space is at the same cusp, what private hospitals were in early 1980,” said Pai. (Ranjan Pai, Chairman of Manipal)
Quality of care speaks a lot, snip from Max India con-call.
| Subscribe To Our Free Newsletter |
