Financial Daily from THE HINDU group of publications
Friday, Nov 25, 2005
Financial Daily from THE HINDU group of publications Friday, Nov 25, 2005 |
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Markets
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Stock Markets Industry & Economy - Medical Institutions & Hospitals Hospital stocks firm on steady growth Our Bureau
Kolkata , Nov. 24 HOSPITAL stocks are in good health on the bourses. But according to some analysts, smaller stocks are improving at a faster rate. Apart from industry's steady growth rate, expansion plans, further step towards attracting foreign medical tourists and increase asset valuation seem to attract the interest of the market for the relatively smaller stocks. Indraprastha Medical Corportion, Apollo group JV with Delhi Government, closed firm at Rs 41.65. Kovai Medical has improved over 27 per cent in the last one month and finished today at Rs 61.10. Devaki Hospital has moved up 35 per cent in the past one month and is now at Rs 22 level. In contrast, Apollo Hospital Enterprises, the leader among the listed healthcare companies, is ruling at Rs 456.70, but it gained by 14.26 per cent in a month. "Fundamentally, Apollo cannot in anyway be compared to other hospital stocks. But, the growth possibilities and expansion plans of the small hospital companies are making their stock tick. As the medical tourist inflow grows and infrastructure improves, the profitability of the relatively small companies would increase," said an analyst with an institutional brokerage. Mr Gul Tekchandani, a market strategist, feels that the growing land prices at urban locations where the hospitals are located, are a positive for the small hospitals. "As all are either adding beds, or improving or extending facilities, the replacement cost for infrastructure is also improving," he added. According to Mr Mukesh Modi, analyst with Anagram Stockbroking, India's healthcare industry is poised for rapid growth due to changing disease profile, rising income levels and education levels. India is becoming a global healthcare destination due to its low cost advantage and high quality healthcare, which will directly benefit the hospital industry in the country. But Indraprastha, has stolen a march over others by obtaining Joint Commission International accreditation, the benchmark for global standards for hospitals. Most insurers abroad do not recognise a hospital unless it receives this accreditation. This will pave way for higher foreign patients inflow for the company. Treatment in western countries is around 40-50% costlier than India. Indraprashtha spent Rs 3 crore over the last year to meet global accreditation. It would also invest over Rs18 crore to upgrade its facilities and replace equipments. The hospital has 695 beds currently and will add another 300 beds by 2006. Occupancy rates as well as average rates per room are expected to go up going forward, leading to higher profitability, analysts felt.
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