Healthcare Companies in India: An Overview
The prospect of investment in healthcare is appealing. After all, everyone will require medical attention throughout their life. Everyone makes use of some form of health care. If you believe in the cliché "invest in what we know," health stocks, which include pharmaceutical and insurance businesses, surely qualify.
They also qualify for economic grounds. For many years, healthcare expenses have considerably exceeded inflation. Many healthcare companies in India have had substantial profits and share price inflation during the last decade. Many analysts and experts believe that growth will continue in the following years.
Opportunities in the Healthcare Sector of India
The Healthcare sector is enormous. It contains:
Diagnostic
A significant portion of the healthcare business is the diagnostics industry. The diagnostic sector acts as a data broker. The diagnostic company's job is to provide pertinent knowledge for proper illness treatment and detection. Consequently, a clinic is referred to as a diagnostic facility if you go there for a blood sample or an MRI (Magnetic Resonance Imaging).
Makers of Medical Tools, Equipment, & Hospital Supplies
These companies concentrate on producing goods for the healthcare industry. They have many items, including laser equipment, dentistry tools, and surgical instruments. They also make hospital beds as well as other necessary equipment.
Players in Medical Insurance
Players in the medical insurance industry provide their clients with medical insurance or comparable services. HMOs (Health maintenance organisations), businesses that offer Medicare solutions, healthcare advisors, including agencies that hire medical professionals are some of the participants in this market.
The Pharmaceutical Industry
An essential component of the healthcare sector is the pharmaceutical sector. Producers of over-the-counter (OTC), prescription, biologic, & generic medications make up this industry.
Top Healthcare Companies in India: Different Categories
When you engage in the healthcare industry, you invest money in several sectors. Some are in manufacturing and production, while others are in service.
Each component of the healthcare sector can function as a distinct mini-sector, with various degrees of volatility & performance based on demography, regulation, payment patterns, and scientific and technological discoveries.
Pharmaceuticals
Prescription and over-the-counter medications are produced and marketed by large pharmaceutical firms, sometimes known as "Big Pharma," who get a steady income through ongoing sales. Additionally, these businesses engage in development and research to produce new medications that go through a clinical evaluation to receive final approval for usage.
Biotechnology
Biotech companies also engage in research and development to produce novel medications and treatments. Solely on a single or two "breakout" items or therapies, though they frequently concentrate.
Although biotech companies are occasionally categorized as belonging to the pharmaceutical medication subsector, they frequently act differently from their Big Pharma rivals. While established pharma manufacturers often provide consistent returns and revenue, biotech companies are more comparable to erratic growth stocks.
Medical Supplies
Manufacturers of medical equipment range from companies that produce inexpensive, low-tech equipment like MRI scanners and robotic surgery to pricey, high-tech products like bandages & shields. As healthcare demand expands, medical stocks in the correct product categories might bring long-term gains.
Distribution and Sales
Pharmacies, merchants, and medical supplies distributors all fall within this industry. Companies are susceptible to broad retail trends, customer demand for healthcare and medical products, and legislation influencing the healthcare sector.
Health Care Management
Managed healthcare is only another moniker for insurance firms. Any company that sells insurance policies, whether through independent contractors, commercial health insurance, the Affordable Healthcare Act's exchanges, or government-run programs like Medicaid and Medicare, fits under this classification.
Best Healthcare Stocks in India
Apollo Hospitals Enterprise Ltd
Apollo Hospitals Enterprise Limited is involved in running independent pharmacies and providing healthcare services. The business sectors include pharmacy, medical, and others. Apart from those, hospitals, pharmacies, projects, and consulting services comprise the healthcare segment.
Thyrocare Technologies Ltd
An Indian company called Thyrocare Technologies Limited offers medical services. The company employs local processing labs in significant Indian and other Asian cities and a CPL (centralized processing laboratory ) in Bombay, India, for esoteric testing.
Fortis Healthcare Ltd
Fortis Healthcare Limited is an integrated healthcare delivery service operator. The firm works to develop, maintain, operate, manage, or oversee hospitals, healthcare facilities, diagnostic centers, and research facilities. The Medical Establishments Division and the Medical Services Division run the business.
| Stock Name | Share Price (INR) | 52 Week High (INR) | 52 Week Low (INR) | Market Cap (Rs. cr) |
|---|---|---|---|---|
| Sun Pharmaceuticals | 980.00 | 985.00 | 733.70 | 2,35,135 |
| Divi's Laboratories | 3,578.55 | 5,425.10 | 3,365.55 | 94,999 |
| Cipla | 1,108.15 | 1,150.40 | 850.00 | 89,428 |
| Dr Reddy's Laboratories | 4,335.20 | 4,974.95 | 3,654.00 | 71,980 |
| Apollo Hospitals Enterprise | 4,290.85 | 5,935.40 | 3,361.55 | 61,696 |
| Torrent Pharmaceuticals | 1,580.50 | 1,640.46 | 1,235.46 | 53,491 |
| Zydus Wellness | 418.85 | 546.00 | 319.00 | 42,396 |
| Max Healthcare | 419.50 | 458.05 | 321.85 | 40,678 |
| Abbott India | 18,085.40 | 21,897.50 | 15,415.83 | 38,430 |
| Alkem Laboratories | 3,122 | 3,915.65 | 2,828.00 | 37,333 |
(Share Price as of 17th October 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
Points To Remember While Investing in Healthcare Stocks
Despite having a defensive image, healthcare stocks include risks, some of which are common to every investment and others particular to this industry.
Regulatory
The government heavily regulates subsectors, including pharmaceuticals & managed care. As a result, FDA regulations, new rules/changes in Medicare, Medicare, as well as other programs, as well as cost limits can all have an impact on how a stock performs.
Political
No sector is immune to public sentiment, but health is compassionate. Consumer desire for reduced prices and the continuous discussion over universal insurance plans, including healthcare reform, may influence the prospects for healthcare corporation earnings and stock prices.
Economic
While the business has strong growth prospects, several providers and facilities face intense competition — including consolidation trends. Pricing and earnings may fall as consolidation continues
How to Invest in the Best Healthcare Stocks in India?
There are numerous strategies to include healthcare equities in your portfolio.
Individual Shares
On the markets, all forms of global healthcare equities are offered. Assess which subsectors are most suited to your portfolio, and then determine which businesses offer the most chance of profit, revenue, or achieving your primary investment goal.
ETFs and Mutual Funds
There are various mutual funds & ETFs in the healthcare sector. Many of them are index funds. Some investors track the industry through an index, such as the S&P 500 National Healthcare Index. Subsector indexes include the S&P Pharmaceuticals Selective Industry Index and the Russell 2000 Biotechnology Fund.
Healthcare REITs
REITs, or publicly listed entities that own a portfolio of assets, frequently specialize in health centers – the physical structures that house hospitals, medical centers, and senior homes. Although a more indirect strategy, these healthcare REITs may be used to invest in both real estate & healthcare.
Conclusion
Healthcare stocks provide an extensive range of options & diversity. This diverse industry offers opportunities for growth, value, competition, and low-risk investors. Because of its sheer scale and the rise in healthcare expenditure, this sector is challenging for any diverse investor to overlook. Predictions for healthcare consumption & spending indicate that this business has a bright future. Healthcare, like every investment, has drawbacks — and its unique dangers, such as susceptibility to government oversight & political currents. As a result, rigorous research is an essential component of healthcare investing.
This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.
Is it a bright idea to invest in healthcare funds?
The key reasons investors pick health sector funds are growth and diversity. Health, like technology, is one of the fastest-growing industries. With the developments in medical technology, healthcare might be a prominent growth area for years or decades.
What stocks do well during a recession?
Healthcare, nutrition, consumer durables, and basic infrastructure are instances of industries that are primarily inelastic, and they may function well during recessions.
Is the healthcare sector expanding?
From 2021 to 2031, it is anticipated that overall employment in the healthcare sector will expand by 13%. This increase is expected to create roughly 2 million new jobs.