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Is Apollo Hospital's Bid for A Leading Diagnostics Chain A Game-Changing Move?

AltG's Principals, Poornima Vardhan and Taponeel Mukherjee, discussing rollup investment opportunities in India

By AltG Research On Behalf Of Poornima Vardhan And Taponeel Mukherjee

Below Are The Three Key Takeaways:

1. Why the interest?

The Indian diagnostics space is a high-growth sector with an annual CAGR of 11-12 per cent. Major tailwinds in favour of the diagnostic industry: increasing urbanisation, increasing healthcare spending, rising prevalence of chronic diseases, and increasing life expectancy.

With High Margins and Massive fragmentation in the industry, consolidating and formalising the sector offers substantial investor returns.

2. How will the investment return be generated?

For investors, the sector can unlock significant value in the next five-10 years via partnerships through Free Cash Flow Accretive strategies, driving Asset Utilization and better balance sheet management via improving the working capital cycle.

3. Future Promise: $20Billion Indian Diagnostics Industry:

The diagnostics in India is poised to create incredible consumer value and financial returns for investors in the next 10 years. Consider the US diagnostics market. It increased about nine times, from USD 15 billion to USD 147 billion, between 2000 and 2020.


In summary, the Diagnostics industry is growing at 2X Indian GDP and is 94% unorganised; we see Apollo Hospitals as the first of many who will drive deal-making in this space.


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