P.H.D Healthcare) theme’s inflection point growth kick-off makes it an ideal time to invest for the long haul
If you want to choose a sector that has all the levers of growth in place and with the icing of a very high degree of valuation comfort, have a look at the P.H.D universe of stocks. P.H.D stands for pharma, healthcare, and diagnostics – and by our reckoning, this segment is a stable, maturing space that offers tremendous growth potential.
In fact, the P.H.D universe is highly diversified and includes companies in fitness, healthcare foods, gyms, health insurance, wellness, hospitals, and so on. Diagnostics are businesses that are quite steady and a play on the rising affluence of Indians. This also includes health insurance. People are demanding better healthcare facilities. Hospitals too figure prominently in the list of growing opportunities for investors to benefit from.
Healthcare: On an upswing
But here’s why we think the healthcare theme is in a long-term, secular growth phase. India spends about a fraction of its GDP, i.e. 4.9 percent on healthcare as compared to the advanced and developed countries like UK and US that spend much higher percentage.
In the coming years, as India’s per capita income increases, consumption spends will only increase and healthcare spending will rise multi-fold. When incomes increases, the spending usually rises twice as much, and healthcare including fitness, diagnostics, hospital care, etc. are expected to be major beneficiaries.
Besides, India is a populous country that is home to 16 crore elderly citizens. With the increase in life expectancy, the demand for healthcare is set to increase. The increased awareness of healthcare, historical under-investment, government’s increasing spending and private investments make healthcare an excellent theme for the next many years. Hence, earnings growth in the P.H.D universe is expected to be above average.
Pharma: On a rebound
This story is from the June 22, 2018 edition of Dalal Street Investment Journal.
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This story is from the June 22, 2018 edition of Dalal Street Investment Journal.
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