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Volume IconAzad Moopen on Aster's India expansion plans and more

In an interview with Business Standard's Sohini Das, Chairman and MD of Aster DM Healthcare, Azad Moopen, shares his expansion plan in India. It will soon open its sixth hospital in Kerala. Listen in

ImageSohini Das New Delhi
Dr Azad Moopen, Chairman & MD Aster DM Healthcare

Dr Azad Moopen, Chairman & MD Aster DM Healthcare

Q1: Coming to your India plans, there are plans to add a lot of new hospitals. And most of them are likely to be brown field. So, if you could explain your India expansion strategy. Also, why brown field? Does that significantly reduce capex? If you could highlight on those points.

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>Focus is on both brown and green fields, but the strategy here is aimed at reducing overall investments
>Brown field strategy includes sprucing up an existing healthcare facility and adding equipments
>Under brown field strategy, cost per bed ranges from Rs 15 lakh to Rs 20 lakh
>For a new hospital (green field), depending on land price, cost per bed can vary from Rs 80 lakh to Rs 1 cr

Q2: So, you are also open to the O&M model. Which are the cities and what categories of cities would you be targeting?
>In this model, we prefer to set up hospitals around places where we already have hospitals
>We have three hospitals in Bengaluru, four hospitals in Kerala state
>Reason for this approach is synergy in terms of availability of doctors as well as some of the investigations
>This makes it easy to manage hospitals with minimal cost
Q3: Also the Budget has some push for telemedicine, especially in the mental health space. With your model of having a mother hospital and feeder hospitals – how are you thinking about scaling telemedicine, taking it to the hinterlands more?
>Pushing virtual care and telemedicine in all geographies of operation
>Have a separate vertical for virtual care and telemedicine
>Aim to reduce time spent on conventional patient-doctor consultation
>Aster Labs are equipped to extend home-care and diagnostic services
>Aster has more than 100 pharmacies in India
Q4: You mentioned pharmacies. Organised pharmacies are a small proportion of India’s pharmacy networks and Apollo being the largest and one of the early entrants. Even they had issues in scaling up. With around 4,000 stores they have hit saturation. You are now 100 pharmacies. What is your outlook for the organised pharmacy sector in India? Would you also be open to inorganic expansion in this space, because I think a lot of other chains are up for sale. 
>Pharmacy is part of Aster’s healthcare ecosystem and overall strategy
>Plans to expand pharmacy network to geographies where Aster hospitals are not present
>Plans to roll out 150 pharmacies this year. Next year, roll out another 150 pharmacies 
>Aims to have 650 pharmacies in India by 2025
>Open to inorganic growth via acquisitions for pharmacies as well as labs
Q5: You have already mentioned that India is going to be 40-50% of the group’s turnover in a few years. Could you elaborate on that a bit? And, why the focus on India, because you are already profitable in the GCC. So, what is your expectation from the Indian market and what are the opportunities and challenges that you see? 
>GCC/ UAE market is experiencing some amount of saturation
>In India, the demand-supply gap in healthcare is significant
>For the 10-20 yrs horizon, India has opportunities in healthcare 
>Already reached about 27% of YTD EBITDA from India and want to bring it up to 35-40%

Q6: Around the Sept quarter, a lot of hospitals and industry analysts pointed out that 2022-23 is going to be better than the pre-pandemic years in terms of margins as well as revenues. So, has that changed with the third wave? Is there a change in the outlook for the hospital industry in India? 
>Aster is looking at impressive growth in India in the present quarter and next financial year

Q7: Medical tourism… it has been hit. It was roughly 10% of the overall turnover of the large corporate hospital chains in the country. What is your experience and what would be your plan to offset the revenue coming from that segment? 
>There has been a fall in medical tourism revenue
>Medical Value Tourism (MVT) can help increase profits
>David Boucher from Bumrungrad International Hospital, Bangkok, joined Aster to help increase flow of patients from different countries to Aster hospitals in India

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First Published: Feb 16 2022 | 8:30 AM IST

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