Why look at Healthcare in India?
It started with news of the acquisition of Fortis – India’s second-largest hospital network. The news stood out to me, because from 1993 to 1996 I was part of the team that conceptualized this foray into healthcare delivery. The past has a way of catching up!
And so, I dug in to see why IHH Healthcare Berhad – a Malaysian Hospital company – decided to acquire Fortis. This is a pattern with IHH – they’ve been busy acquiring hospitals in Malaysia, Singapore, Turkey and China. Now they’re investing heavily in India. Two questions popped up in my mind:
- What is IHH’s India thesis?
- Can The Buylyst find some investment opportunities in this sector?
I want to preemptively answer a question that long-time readers of The Buylyst may have: Does The Buylyst plan to add Healthcare to its list of investment themes? Yes and No. No, because we take the idea of “core competency” very seriously. We won’t invest in things we don’t understand. That probably rules out pharmaceuticals and unicorn concepts in biotechnology. If we recruit an expert who knows the nuts-and-bolts of these specialized fields, we may dive into them. For now, we’ll refrain.
Yes, because the hospital space is a little less technical. At the end of the day, Revenue equals Price times Volume. These variables are a lot easier to track and estimate in the Hospitals space compared to more exotic Healthcare sub-sectors.
At The Buylyst, we’ve already dived deep into the Consumer and Banking sectors in India. We’re ever-vigilant about finding easily executable investment ideas in those sectors. The point of this Worldview is to figure out if we can participate in the India story from yet another angle.