Fortis Malar Management Discussions


Indian Healthcare Sector

The Indian healthcare sector has become a major contributor to Indias growth and employment, covering diverse segments like hospitals, medical devices, clinical trials, telemedicine, medical tourism, health insurance and medical equipment.

The sector is expanding rapidly, driven by enhanced coverage, services and growing investments by both public and private players. The governments initiatives to increase healthcare spending and improve healthcare infrastructure have further bolstered the industrys growth.

COVID-19 has not only brought challenges, but also presented several growth opportunities to the healthcare sector. The pandemic has highlighted the critical role of healthcare organisations and it has driven transformation by accelerating the pace of reforms in Indias healthcare sector.

Furthermore, the industrys expansion continues to be fueled by the rising need for healthcare services due to increasing life expectancy, increasing prevalence of chronic diseases and changing lifestyles of Indian population. As a result, the healthcare sector has emerged as a significant contributor in generating job opportunities and adding to the countrys GDP.

A. Current Landscape and Key Highlights

The Indian healthcare industry has experienced various trends in 2022 that have contributed to its growth, making it the largest service sector in the country. The overall size of the industry is estimated to be $372 Billion with a CAGR of 22% (2016 – 2022).

The industrys expansion can be attributed to several factors, including increasing life expectancy, a growing middle class, an increasing prevalence of lifestyle diseases, public-private partnerships and the adoption of digital technologies like telemedicine.

Additionally, the industry has attracted investors, resulting in increased FDI inflows over the last two decades.

The hospital industry is projected to grow to $132 Billion by FY 2022-23 at a CAGR of 16-17%.

The private sector is the major contributor in the healthcare spending in India, unlike most other countries where public spending dominates.

Key highlights:

1. The governments plan to increase healthcare spending to 2.5% of GDP by 2025, which is expected to lead to the development of new healthcare facilities and expansion of existing ones

2. There is a decrease in the percentage of healthcare spending paid out of pocket by individuals, from 62.6% in FY 2015 to 47.1% in FY 2020 (Source: Ministry of Health)

3. The Indian government is expected to increase partnerships with private healthcare providers to improve access to healthcare services, particularly in rural and underserved areas

4. Greater adoption of digital health solutions such as electronic health records (EHRs), mobile health apps, and remote patient monitoring systems.

5. The adoption of telemedicine, which has been accelerated by the COVID-19 pandemic and is projected to grow at a CAGR of 31% between 2020 and 2025 to reach at $5.4 Billion.

6. An increasing demand for home healthcare services driven by an aging population and rising burden of chronic diseases. Indias home healthcare market is expected to grow at a CAGR of 19.2% to reach at $21.3 Billion by 2027

7. India aims at becomingself-reliant in the manufacturing of medical devices. In FY 2019-20, the total device manufacturing market in India was sized at around $11 Billion. By 2025, the industry is expected to grow fivefold to $49.5 Billion.

B. Government Policies and Key Initiatives

Indias population is over 1.4 billion and is spread across 28 states and 8 union territories. Public Health and Hospitals are primarily the responsibility of the respective State Governments. However, under the National Health Mission (NHM), technical and financial support is provided to the States/UTs to strengthen the public healthcare system which includes upgrading selective services in the state Medical Colleges, District Hospitals, Sub District Hospitals and Community Health Centres. From 2018 the Ayushman Bharat PM-JAY has been in progress as a centrally sponsored scheme with funding shared between the Centre and States. The entitlement criteria covers both urban and rural areas but is based on economic status and deprivation of the beneficiaries. Another promising area relates to the Ayushman Bharat digital mission which has widened the scope for telemedicine to provide services even to remote parts of the country.

IntheUnionBudgetfor2023-24,thegovernmenthasannounced various programs for the healthcare, pharmaceuticals and medical devices industries.

The budget includes an allocation of 88,956 Crores towards healthcare expenditure, which represents a 2.7% increase from the previous year.

It emphasises the governments focus on two key drivers of improved healthcare: increasing the number of trained medical professionals and investing in research and development. The increased allocations reflect the governments commitment towards a more efficient healthcare system.

2023-24 Budget Highlights

The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), which aims to rectify the regional imbalance in the availability of trustworthy tertiary services by setting up AIIMS type hospitals and Upgradation of Government Medical College (GMC)/ Institutions, received an allocation of 10,200 Crores (a 23% increase from revised estimates for 2022-23).

Human Resources for Health and Medical Education has been allotted 6,500 Crores ($780 Million)

The National Health Mission, which aims at providing universal access to equitable, affordable & quality healthcare services, has received an allocation of 29,085 Crores ($3.5 Billion)

PM - Ayushman Bharat Health Infrastructure Mission

(PM-ABHIM) has been allocated 5,156 Crores ($675.7 Million) to improve Indias primary, secondary and tertiary care service and strengthen the health infrastructure

To promote medical tourism, the Indian government has extended the e-medical visa facility to citizens of 156 countries

Skill India Digital platform is launched to provide healthcare skilling courses and certifications with the participation of public and private sector institutes, academic institutes, and the National Skill Development Corporation (NSDC)

C. Growth Drivers

Indias healthcare industry is predicted to sustain robust demand, propelled by an ageing population, a surge in lifestyle diseases, increasing affordability leading to better access to quality medical care and greater penetration of medical insurance. We believe Hospitals segment being the largest component of the overall healthcare industry will be the biggest beneficiaries of the healthcare market in India as public spend is likely to be limited to ~25-30% of annual healthcare spend.

a. Key Growth Drivers for the Hospital Industry

Lower Healthcare Spend: India healthcare spend is 3% of GDP vs 19% in case of US. This works out to be US$ 57 per person annually on health care vs US$ 11,702 in case of US

Source: PL Equity Research on Indian Healthcare; World Bank

Low public spending and limited penetration of health insurance has led to ‘out-of-pocket expenditure accounting for ~63% of total healthcare which is one of highest in the world and well above global average of 22%

Source: PL Equity Research on Indian Healthcare

Increasing burden of Non-Communicable Diseases: Non-communicable diseases (NCDs) encompass a vast group of diseases such as cardiovascular diseases, cancer, diabetes and chronic respiratory diseases. NCDs contribute to around 38 Million (68%) of all the deaths globally and to about 5.9 Million (60%) of all deaths in India. The majority of NCD deaths occur in low and middle-income countries such as India, which is undergoing an epidemiological health transition owing to rapid urbanisation, which in turn has led to an overall economic rise, but with certain associated flipsides.

Increase in Health Insurance Penetration: During 2020-21, the general and health insurance companies witnessed a 14.7% growth in premium collection while the compounded annual growth rate over 2016 to 2021 stood at 17.7%. In addition, it was observed that the market share of private sector insurers increased from 18.5% in 2016-17 to 27.3% in 2020-21 while market share of public sector insurers declined from 63.3% to 47.8% in the same period.

Exclude Personal Accident and Travel Insurance

Source: IRDA 2020-21 Annual Report

Significant opportunity from medical tourism:

Medical tourism is expected to be one of significant growth drivers for Indias Healthcare Sector. The medical tourism market is expected to grow at a CAGR of 65- 70% between FY 2021-25 (Source: PL Equity Research). In addition, India offers a significant cost advantage globally along with best-in-class clinical outcomes.

Continuing demand supply gap for quality healthcare services and healthcare infrastructure: India currently has 1.3 hospital beds per 1,000 population. There is also a shortage of skilled health workers, with 0.65 physicians per 1,000 people (the World Health Organisation standard is 1 per 1,000 people) and 1.3 nurses per 1,000 people.

India would need an additional 3 Million beds to achieve the target of 3 beds per 1,000 people by 2025. Furthermore, another 1.54 Million doctors and 2.4 Million nurses will be required to meet the growing demand for healthcare in India.

D. Technological Transformation

The HealthTech industry in India has seen impressive growth, outpacing most other segments of the healthcare sector, with a remarkable CAGR of 39%, following global trends. By 2033, it is projected to reach $50 Billion (Source: RBSA Advisors). Currently, the industry comprises six segments, namely telemedicine, e-pharmacy, fitness, wellness, healthcare IT, analytics, home healthcare and personal health management. Data mining, clinical diagnoses and self-monitoring devices to assist in maintaining a healthy lifestyle are just some of the ways in which the healthcare industry in India is constantly evolving in tandem with technological advancements.

The Indian government and private sector stakeholders have supported the development of technologically advanced medical devices in addition to digital infrastructure. Increasing smartphone and Internet penetration, and initiatives like the government-run National Digital Health Mission are collectively responsible for the accelerated pace of health systems digitisation in India.

The MedTech market in India, which comprises mainly of medical equipment, life sciences, and in-vitro diagnostic technology, was valued at around $10.4 Billion in 2020 and is projected to grow at a CAGR of 37% to reach $50 Billion by 2025. (Source: IBEF)

Meanwhile, the use of digital healthcare technologies, including Artificial Intelligence (AI) and telemedicine, has increased significantly globally, with investments reaching nearly $57 Billion in 2021.

Examples of digital transformation in the healthcare industry include telemedicine, AI-assisted medical devices, blockchain for electronic health records and cloud-enabled data management platforms.

Additionally, Indias virtual or remote healthcare industry will be crucial going forward. According to a market research report, remote healthcare global market is expected to be around $57.1 Billion by 2030. A significant factor that will help its growth will be the use of AI.

In the coming years, the healthcare space is likely to be affected by 5G. With the help of 5G, everything can be done in a distributed manner, including robotic surgeries, extensive healthcare management in rural areas, as well as virtual health education and health research.

The following prominent trends can be anticipated as the healthcare industry reinvents itself for a new digital future:

Key Technology Transformation Trends in the Healthcare Sector

Increased Focus on Big Data & Analytics: Numerous healthcare organisations are progressively putting resources and investment into clinical data analytics for analysing patient data. For example, adaptive data analytics (ADA) is already at the forefront of the new age research of the industry, to enhance the ability to quickly adapt data and analytic techniques.

Growth of AI/ML and analytics: AI and advanced analytics is enabled by digitalisation, which makes it easier to analyse things like predictive analytics, telemedicine, precision medicine, population health analytics and so on. According to a market research report, the AI in Healthcare Market is expected to reach $102.7 Billion by 2028, up from $14.6 Billion in 2023.

Robotics in healthcare: Robots aid healthcare professionals in completing routine tasks more efficiently, freeing up their time to concentrate on other crucial duties. Such automation in medical care makes operations more secure and more affordable for patients.

Remote health and virtual care becoming mainstream: Telemedicine accounted for 30% of all patient visits during the pandemic, and digital health platform transactions increased by three times. The domestic telemedicine market is anticipated to reach $5.5 Billion by 2025, according to an EY study.

Leveraging Blockchain: Providers are developing novel solutions that make use of the emerging blockchain technology to enhance the performance, security, and transparency of healthcare data sharing. Blockchain has the potential to revolutionise the healthcare industry.

Internet of Medical Things (IoMT): The Healthcare industry is emulating the concept of IoMT, a connected infrastructure of smart devices and software applications to improve healthcare services. The Internet of Things (IoT) in healthcare and remote patient monitoring are developing simultaneously to revolutionise patient care. According to a market forecast, The IoT Healthcare Market is worth $158.1 Billion with 50 Billion connected devices by 2020

Cloud Technology: Patients and healthcare professionals now have access to cloud technology, which has grown significantly. More cloud data centers are needed for the training and operation of AI and machine learning tools, which are growing in number.

E-Pharmacies: E-pharmacies in India will serve 70 Million households by FY 2024-25, according to the industry body FICCI, as internet use and digital awareness rise.


Healthcare is expected to remain a major contributor to the economy in the coming years as various policies, innovations and investments are anticipated to shape the industrys future impacting economic growth. The increasing focus on digital health solutions, telemedicine and other technological advancements in the healthcare industry has opened new avenues for growth and innovation.The government plans to increase the budget allocation for public health spending to 2.5% by 2025, which will be beneficial given the huge demand for tertiary care and specialty hospitals.

Critical Role of Private Players: Private healthcare players will continue to play a critical role in the industry as they continue to provide healthcare services to more than 70% of the countrys rural population and 80% of the urban population. In addition, private healthcare players will continue to invest towards addition of new bed capacity, bringing in new high end medical infrastructure and uplifting the overall healthcare services in the country by adopting new technologies; all to further strengthen the overall patient experience and clinical outcomes.

Growing Home Healthcare Solutions: It is expected to be one of the fastest growing segments in India, though it is currently at a relatively nascent stage. The growth would be driven by the rising elderly population in the country, increase in the incidence of chronic diseases, enhanced demand for constant personalised care as well as the emergence of nuclear family structures in urban areas.

Advancements in Technology: Advancements such as AI, wearables and other mobile technologies, along with Internet of Things, are expected to take the healthcare services to the next level. Key segments where new opportunities are likely to emerge for health technology players include development of tools to facilitate emergency care and improvements to medical infrastructure, through technology-based optimisation. This includes expanding the scope of wearable devices to track health conditions, developing patient-facing mobile health applications as well as greater integration of AI, robots and blockchain technologies.

We believe that the future of diagnostics and healthcare can be built upon several pillars, including anytime anywhere connected and home-based care and testing, data driven clinical interventions , automation, advanced testing technologies, and supply chain efficiency. We believe that prevention and early diagnosis to be central to the health, and sophisticated tests and tools could mean most diagnosis take place at or close to peoples homes.

Proactive and Integrated System: The future of health will be driven by proactive and integrated system of health where transformational technologies like AI, quantum computing, cloud storage, virtual reality will play a pivotal role. Next-generation sequencing (NGS) has enabled scientists and researchers to better understand the genetic mechanisms linked to conditions, in areas such as womens health or in diseases like cancer and inherited disorders. More importantly, these advances have given rise to improved diagnostics for early intervention and monitoring treatment response, ensuring patients get the best therapies possible.

The hospital sector in the country has emerged sharper in the aftermath of the COVID pandemic. The evolving industry environment and the opportunities for growth have led to an increasing interest by investors, private equity players, other corporate and healthcare players for investment in the sector. This has also led to consolidation opportunities in the industry highlighting the need to gain size and scale in order to draw higher operating leverage.At the same time, the market environment is competitive and regulatory uncertainties remain. Healthcare organisations are making efforts to grow revenue, enhance patient experience and better clinical outcomes in order to grow their market share in an evolving environment.



Fortis Malar Hospital Limited (FMHL) is one of the distinguished multi super-specialty corporate hospitals in Chennai providing comprehensive medical care in areas of Cardiology, Cardio-Thoracic Surgery, Neurology, Neurosurgery, Orthopedics, Nephrology, Gynecology, Gastroenterology, Urology, Pediatrics, Diabetics and so on.

Malar Hospital was established in 1992 and over the years became a household name for tertiary care hospital services in Chennai. During 2007-08, Fortis Healthcare Limited (FHL) acquired a majority stake in Malar Hospital Limited.

Today, Fortis Malar Hospital has an enormous pool of talented and experienced doctors, who are further supported by a team of highly qualified, experienced& dedicated support staff & cutting-edge technology. The hospital has an infrastructure comprising of around 160 beds including about 40 ICU/CCU/RTU beds.

(ii) Clinical Excellence

Fortis Malar has been successfully maintaining the standard of treating STEMI patient within 90 minutes for 95% of the patients.

CTVS A 32 year old man, weighing 120kg with history of breathlessness underwent Minimally Invasive Right Atrial Myxoma (11.5cm x 8cm) excision. It is the largest Myxoma excised using a minimally invasive procedure.

CTVS A 48 year old male with LV function of 25% and Triple Vessel Disease underwent CABG + EVPP (Endo Ventricular Patch Plasty). One of its kind done in the entire nation. Post Surgery patients LV function improved to 40%.

The Renal Transplant Team has successfully completed

13 transplants (Live – 11 and Cadaver – 2) inclusive of Swap, Domino and Double swap.


Your Company achieved a consolidated total income of 92.59 Crores during the current year as against 93.57 Crores in the corresponding financial year ended March 31, 2022. EBITDA for the year stood at 11.21 Crores compared to 10.83 Crores for the previous corresponding year. The Profit / (Loss) before tax for the period stood at (7.01) Crores as against (8.26) Crores during the corresponding year. Profit / (Loss) for the year stood at (15.48) Crores in the current financial year compared to (8.27) Crores in the previous year.

Regarding the key performance indicators, the Companys average revenue per occupied bed (ARPOB) for the current year stood at 165 Lakhs as against 163 Lakhs in the previous year. The average length of stay (ALOS) was at 3.85 days in FY 2022-23 compared to 4.29 days in FY 2021-22. Occupancy of the hospital during the year was at 38% as compared to 39% in the previous year. There has been no change in the nature of business of the Company during the year under review.

Ratio FY 2022-23 FY 2021-22 Change %
Debtors Turnover (x) 31.93 40.17 (20.52%)
Inventory Turnover (x) 8.54 9.76 (12.49%)
Interest Coverage Ratio (x) 0.25 0.88 (71.93%)
Current Ratio (x) 2.66 1.56 70.32%
Debt Equity Ratio (x) 0.72 0.67 8.47%
Operating Profit Margin (%) 5.32% 3.99% 33.32%
Net Profit Margin (%) (18.1%) (9.6%) 87.61%
Return on Net worth (%) (24.12%) (10.32%) (133.65%)


The primary objective of any human resource management is to ensure the availability of competent and willing workforce to the organisation as well as to meet the needs, aspirations, values and dignity of individuals/employees and having due concern for the socio-economic problems of the community and the country.

Please elaborate on any key HR activity performed during the year in Malar. The total number of employees stoodat 417 as on March 31, 2023.


At Fortis Malar, the internal control system has been designed to correspond to the size and complexity of the operations and the incremental changes made. All aspects are continuously monitored by the management to provide reasonable assurance that the objectives and prescribed benchmarks are met. We have a robust system for checking the effectiveness and efficiency of the operations, as well as the reliability of financial reporting and compliance with applicable laws and regulations. It is overseen at several layers including where required by the Committees of the Board.

The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and through its observations provides an input to the management to support continuous improvement program. The internal audit program is managed by an Internal Audit function directly reporting to the Audit & Risk Management Committee of the Board.


Except for the historical information contained herein, statements in this discussion which contain words or phrases such as ‘will, ‘would, ‘indicating, ‘expected to etc., and similar expressions or variations of such expressions may constitute ‘forward-looking statements. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to successfully implement our strategy, future business plans, our growth and expansion in business, the impact of any acquisitions, our financial capabilities, technological implementation and changes, the actual growth in demand for our products and services, cash flow projections, our exposure to market risks as well as other general risks applicable to the business or industry. The Company undertakes no obligation to update forward looking statements to reflect events or circumstances after the date thereof. These discussions and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.


• Market Research, Equity and Other Reports, Web Articles, Press & Media Reports and Others

• Investment Opportunities in Indias Healthcare Sector, NITI Aayog

• IBEF report on Healthcare Sector, February 2023

• Prabhudas Lilladher Equity Research report

• World Bank Data