Consolidation in the Indian provider market gaining momentum

Consolidation in the provider sector in India will continue as larger provider groups try to expand their presence across the country. We would see several large to medium standalone hospitals losing out in the highly competitive market,unable to leverage the economies of scale that the provider chains can achieve.

There is potential for increase in mergers and acquisitions as provider chains go on a shopping spree flush with cash raised from the market.
However the debt service burden of distressed hospitals may make them less attractive for acquisitions.

In the coming years hospitals would attempt to supplement falling margins by going after medical tourism revenues. Once again, undifferentiated stand alone hospitals may not able to exploit this to the fullest as they would be way behind the provider chains in brand management, operational efficiency and customer service.