Following is the reply I have got from Ishmohit (founder of SOIC). I am enrolled into his course and it has been a fantastic learning experience till now. He has replied beautifully (like always):
- For a hospital to grow, Capex needs to be done. NH is adding 50% additional beds over the next 3 Years in its Capex cycle. Lets look at the industry demand: https://www.business-standard…
India needs an additional 2.4 million (24 lakh) hospital beds to reach the recommended ratio of 3 beds per 1,000 people, fuelling the demand for healthcare-related real estate space, according to Knight Frank. “India’s existing bed-to-population ratio is 1.3/1000 population (both private and public hospitals included), and there is a deficit of 1.7/1000 population. To cater to the existing population, there is an additional requirement of 2.4 million beds,” the consultant said.
-
Thus, there is enough demand.
-
Most important Question, How is NH going to grow?
NH is doing Greenfield Cape’s in same cities such as Bangalore, Kolkata, & Cayman Island. ROCE on existing assets is 25%+. They are going to invest 1650+ crores in FY25. This is needed for Hospital to grow beyond 2-3 years.
In a stable growth industry like Hospitals, there will be cycles of investments and phases of reaping rewards. NH is somewhere in the middle as majority of the investments will break even in 2 years. This is a business which requires FY27-28 type of thought process to compound the money well
| Subscribe To Our Free Newsletter |
