How to Evaluate Hospital Stocks | India's Hospital Industry | Apollo, Max Healthcare, Fortis & More

► Need Term or Health Insurance?

► 26,000+ readers have joined my Investing Newsletter

With over 1.3 billion people, the demand for quality healthcare services in India is immense and central to India's healthcare landscape are its 70,000 public and private hospitals. In this video, we delve into the three main facets that shape the hospital industry in India, providing a comprehensive understanding of its dynamics

1. Hospital's Business Model - We examine Indian hospitals in regards to its demand cyclicity, capital-intensive nature of business, economies of scale enjoyed by large multi-speciality hospitals, the insurance conundrum and the regulatory risks that hospitals face

2. Hospital's Operating Efficiency (Key Performance Metrics) - Here we delved into 4 important metrics that includes the Occupancy Rate, the Average Revenue per Occupied Bed (ARPOB), the Average Length of Stay (ALOS) and the Payor Mix. We examined this for India's leading listed hospitals which includes Apollo Hospitals, Max Healthcare, Fortis Healthcare, Narayana Hrudayalaya, Aster DM Healthcare, Krishna Institute of Medical Sciences (KIMS), Rainbow Childrens Medicare, Healthcare Global Enterprises (HCG) and Shalby Limited

3. Hospital's Valuation and Financial Metrics - In this section, we examine the importance of revenue growth, earnings per share (EPS) growth, EBITDA margin, capital expenditure and the EV-on-EBITDA across hospitals and time periods to help investors make informed investment decisions

👉 Video Chapters:
00:00 India's Hospital Industry
00:57 1. Low Demand Cyclicity
01:28 2. Capital Requirements
02:20 3. Economies of Scale
04:31 4. Mature Hospitals
06:14 5. Insurance Coverage
07:12 6. Regulatory Risk
09:00 7. Occupancy Rate
10:19 8. Average Revenue Per Occupied Bed
12:36 9. Average Length of Stay
13:52 10. Payor Mix
15:17 11. Revenue Growth
16:20 12. Earnings Growth
17:12 13. EBITDA Margin
18:52 14. Capital Expenditure
20:29 15. EV-on-EBITDA
21:30 Shankar's Viewpoint

👉 Useful Reading Resources:

🔥 Top Videos on My Channel (don't forget to subscribe)

🙌 Join my community on:

#apollohospital #maxhospital #fortishospital #narayanahealth

Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented

[gauravmalhotra]

I have spend 28 years in healthcare industry at senior leadership position and can say that your research is excellent. Keep up the great work.

[waowaowao]

One of the best analysis I have ever seen encompassing revenue models, industry context and performance metrics. Really well presented and summarised in the end. This should not be free😂

[SasiGudla]

Every video of yours is such a big treasure trove. The way you compress enormous amount of research and present in such a structured and concise manner is just awesome. To top it all, like an excellent teacher you always summarise the video at the end. And that just tells how dedicated you are to your craft. May your tribe grow and grow.

[smart]

One good thing unlike other youtuber you don't direct viewers to buy specific stock, rather you presented view and let viewers take decision, Good approach and keep up good work

[tajjsingh]

My brother is a doctor and I shared your video to him.
Thanks for giving valuable information.

[mevikkiu]

As always, you have made a complex analysis look simple and easy to remember. Key parameters and ratios to be looked. When we had our 1-1 discussion, you had mentioned it takes looong time to create a video. Can’t agree more now and Can’t imagine the effort that’s gone in from collecting the details, organising them and then presenting in such a simple way. Thank you so much Shankar !!

[arunpatial]

Shankar is the most underrated content creator and educator. Looking forward to seeing you hit 10m mark Shankar ji

[jvarunkumar]

I kid you not, but few hours back I was trying to study about hospital stocks and decided to look at
S and P 500 top 100 stocks. I was shocked to notice that there were several health-care and health insurance companies in the top 100, but not a single hospital business. I was not able to make sense of this information as I expected hospitals to make more money than health insurance companies, but when I heard your explanation everything made sense to me.

Since you have provided so many good video articles, I would like to contribute an idea to you.
Please have a look at top 100 stocks of S and P 500 and provide your analysis of what you believe would be the sectors that dominate the nifty 100 after 15-20 years from now.

Thanks a ton. You are like an elder brother to me.

[tensorthink]

Hidden gem in hospital stock is narayan Hrudayla NH

[manickamrm]

Well explained video, Able to get much insights on Hospital sector. Thanks for sharing your valuable knowledge.

[anilpudota]

I prefer Narayana hridayalay, Rainbow, Max health care and KIMS. Exited Aster DM health care and Fortis health care

[sriramnb]

This is a great Analysis. I was just looking to do some research on this industry as i was trying to make some entries into Narayana Hrudayalaya and your video was a boon jn disguise just when i was in need of it. Again great work and summarization.

[tradingmyway]

Great video, Shankar ji! Really huge respect for the quality research and in depth analysis ithat you share so selflessly. It's a boon for novice investors like me. Just don't have enough words to express my gratitude. All I can say, Thanks a ton! Satindar. 💐👍🏻🙏

[shivanip]

21:08 How did you calculate other hospitals discount from apollo? So should subtract evbyebitda ratio of other hospitals from Apollo?

[deepakshivankar]

Excellent research and beautifully presented! A useful video for finance professionals as well as general investors. Best wishes!

[pipelinerpipelineconstruct]

Sir.. Greate video. First time i am clear about what to watch/track in hospital sector . Very very informative video.

[sabarnasam]

Where to find this ratios 11:53 ? Not present in standard search tools like screener

[hemanthkaja]

Shankar ji.. as always, a great presentation. Clear and concise. I think you condensed almost all the factors in a 23 minute video which is something amazing. I would only suggest one more parameter : the model in which the Hospital is managed i.e; if the management generally does its own PPE or it rents them out and how it would impact the numbers. KIMS example had an indirect reference but would be great to have kept it somewhere in financial aspects. That being said, I think this is a great video for someone to start in-depth analysis of this sector. Thank you!

[sumeetrokade]

One of the most comprehensive video I have seen on the health care industry. It covers all the important aspects for investing in healthcare industry. Thank you very much

[rajarshidey]

Quick question, I used screener and looked into Max and Apollo, something which caught by eye was that the tax percentage varied a lot for both across years. Do you have any idea about it?