market research report : medical devices market in india 2013

Medical Devices Market IndiaMedical Devices Market – India

April 2013

Executive Summary

Market

Domestic market for medical devices in India was pegged at INR X1 bn in 20‐‐ which is poised to grow to INR X5 bn by 20‐‐

Growing hospital infrastructure and healthcare spending is fostering the need for high‐end devices for accurate and fast treatment

Drivers & Challenges

Drivers: Improving health infrastructure Increasing healthcare spending Changing demographics and growing target consumer group

Challenges: High dependency on imports

Lack of standard regulatory structure

TrendsOutsourcing/Relocating of manufacturing facilities

Increasing lifestyle diseases and therapies Increasing medical tourism in India Growing health insurance market

Increasing demand for refurbished devicesTrends

Increasing joint ventures and tie‐ups

Various exhibitions and trade fairs

GovernmentGovt. bodies and associations such as MoHFW, CDSCO and AIMED are aiming to provide medical d i i I di l i d i di d i

Focus on cost reduction and innovation

Use of plastics in medical devices

Competitive

Government Involvement

devices in India a regulatory structure in order to promote indigenous production CDSCO has laid down registration and license mechanisms to regularize imports of drugs and devices

Major Players

2MEDICAL DEVICES MARKET IN INDIA 2013.PPT

Landscape Company A Company B Company C

•Economic Indicators•Introduction •Market OverviewMarket Overview•Export Import•Distribution Channel•Drivers & Challenges•Drivers & Challenges•Trends•Government InvolvementGovernment BodiesGovernment RegulationsGovernment Initiatives

•Competitive Landscape•Recent Investments•Strategic Recommendations


Strategic Recommendations•Appendix

SAMPLE Economic Indicators (1/3)

INR tn

15 o414.12

GDP at Factor Cost: Quarterly

m2

p1o1

n1

m1

14

13

12

11

n4

m4

o3n3

m3

p2o2n2

Q1

10

Q4Q3Q220‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐

Inflation Rate: Monthlyy

0 8

1.0

%

eb

0.2

0.4

0.6

0.8

dca

4PHARMACY RETAIL MARKET IN INDIA 2013.PPT

0.0

Dec 20‐‐ ‐ Jan 20‐‐Nov 20‐‐ ‐ Dec 20‐‐Oct 20‐‐ ‐ Nov 20‐‐Sep 20‐‐ ‐ Oct 20‐‐Aug 20‐‐ ‐ Sep 20‐‐

Medical Devices are classified as per the risk level and their intended use

•Medical devices under Section 3 (b) (iv) of the Drug and Cosmetic Act refers to any instrument, apparatus, machine, appliance implant in vitro reagent or calibrator software material or other similar or related article

Medical Devices – Definition

appliance, implant, in vitro reagent or calibrator, software, material or other similar or related article Intended by manufacturer to be used alone or in combination, for human beings for one or more specific purposes of diagnosis, prevention, monitoring, treatment or alleviation of disease Does not achieve its primary intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its intended function by such means

•Medical Devices in India are classified as per their risk levels and intended use and are divided into different classes•Classification is carried out in accordance with Annex IX of Schedule M‐III provided by The Drugs Technical Advisory Board (DTAB)

Class ALow Risk

Class BLow‐moderate Risk

Class CModerate‐high Risk

Class D

•Heart valves

High Risk

• Includes devices such as •Hypodermic needles • Lung ventilator bone •Heart valves, implantable defibrillatorthermometers and

tongue depressors

•Hypodermic needles, suction equipment

• Lung ventilator, bone fixation plate

If a manufacturer desires to reclassify a device to a lower class, they must submit a justification to The Central Licensing Approval Authority (CLAA) for evaluation that the movement to the lesser stringent class will assure


Licensing Approval Authority (CLAA) for evaluation that the movement to the lesser stringent class will assure sufficient safety and effectiveness of the device

Growing population along with a high growth economy will be instrumental in driving demand for medical devices

•The healthcare market in India has huge potential to grow

I di i h t th 1 21 b l

Market Overview (1/3) Market Size : Healthcare in India

6 000

INR unitsA% A5 India is home to more than 1.21 bn people

Basic infrastructural facilities are lacking

•Medical devices market is marked by high value imports of expensive and sophisticated devices

• In terms of technology – high end medical devices 2,000

4,000

6,000 A5A4

A3A2A 1

gy gare primarily found in tier I cities Gradually it is expected that demand in tier II and tier III cities will also rise As economic growth picks up, this transition is expected to be smooth

0

20‐‐e20‐‐e20‐‐e20‐‐e20‐‐

Market Size: Medical Devices• The various stakeholders in the medical devices industry include manufacturers, distributors, hospitals chains, pathology labs and diagnostic centers

d h d lf d l400

500

INR units

X3

X% X5X4

X2X1• In India, Town M has positioned itself as a medical

devices hub Proximity to City N and having a large pool of technical staffhelps Town M to maintain its edge 0

100

200

300 X1


20‐‐e20‐‐e20‐‐e20‐‐e20‐‐

Segments in the Market (1/2)

60

INR units

I6

Imaging Devices Market Size & Growth• Products in this segment include ultrasound scanners, CT scanners, x‐ray equipment, MRI scanners, PET

d fl

20

40

60 I% I6I5

I4I3

I2I1

scanners, mammograms and fluoroscopes

• At present, market for imaging devices is the largest among all segments in the medical devices industry

•Major players in this segment include M, N, O, P and Q

Market Size & Growth

0

20‐‐e20‐‐e20‐‐e20‐‐e20‐‐20‐‐

Patient Monitoring

20

30

INR units

P6P% P5P4

• Products in this segment include ECG and EEG monitors, surgical concentrators, multipara monitors, pulse oxymeters

• Currently, it is the second largest segment in the

0

10

20 P4P3

P2P1medical devices market and is growing at an impressive rate of P%

•Companies operating in this segment include P, Q, R and S


20‐‐e20‐‐e 20‐‐e20‐‐e20‐‐20‐‐

Drivers & Challenges – Summary

Drivers

Improving health infrastructure

Increasing healthcare spending

Changing demographics and growing target consumer group

I i lif l di d

Challenges

High dependency on exports

Increasing lifestyle diseases and therapies

Increasing medical tourism in India

Lack of standard regulatory structure

Growing health insurance market


SAMPLE Key Trends

Outsourcing/Relocation of manufacturing facilities

Increasing joint ventures and tie‐ups

`

Various exhibitions and trade fairsKey

Trends

Increasing demand for refurbished devices

Focus on cost reduction and innovation


Use of plastics in medical devices

CDSCO have highlighted the areas of improvement for the medical devices market

•It is the authority regulating medical devices in India under Ministry of Health and Family Welfare (MoHFW)

Central Drug Standard Control Organization (CDSCO) The Central Licensing Approval Authority (CLAA)

Serves as the main regulatory body for medical devices that will classify medical d i d f t ki• It lays down rules, standards and approves import and

manufacturing of drugs, diagnostics, devices, and cosmetics• Establishes standards and regulations for drugs, blood and blood products, intravenous fluids, and vaccines

•Companies must register all their products with the d l f

devices, and any manufacturer seeking a less stringent classification must justify it to

the CLAA

p g pCDSCO before its products can be introduced into the Indian market

• It issued a Gazette Notification S.O. 1468 (2005) that declared 10 categories of sterile devices to be considered

Act and Regulatory status of CDSCO

The Drugs & Cosmetics Act (DCA)

as drugs under Section 3 (b) (iv) of the Drug and Cosmetic Act (DCA)

• In late 2008, Drugs Controller General of India (DCGI) prepared an expanded list of medical devices that require

Regulates the import, manufacture, sale, distribution of 10 medical devices classified as drugs and also provides licenses which are compulsory for the importers and

manufacturers to deal in the said devicesregistration• The list now includes over 160 medical devices

•Currently working on a road map to include current status review as well as guiding principles of medical devices and a regulatory process implementation phase

CLAA has also adopted and recognized BIS 15575 or its revisions & ISO 13485 in respect of the

specifications to be followed for quality in order for the manufacturer to demonstrate conformity with


devices and a regulatory process implementation phase to make it an all‐inclusive process

the manufacturer to demonstrate conformity with the relevant regulatory requirements

Competitive Benchmarking (2/5)

Key Ratios of Major 3 Companies – Operational Basis (FY 2012) (1/3)

6

% Net MarginOperating Margin

‐0.03

4.08

‐0.04‐0.04

1.85

‐2

0

2

4

6

‐3.44‐4

2

Company CCompany BCompany A

• xx


Public: Domestic Company – Player A (1/4)

Offices and Centres – India Company Information

Corporate Address xx

Tel No. xx

Fax No. xx

Website xx

Year of Incorporation xx

Ti k S b lTicker Symbol xx

Stock Exchange xx

Products and Services

Mumbai

Key People

Name Designation

Category Products/Services

Domestic Appliances xx

Head Office

Lighting Products xx

12

Note: Product list is not exhaustive

MICROWAVE OVENS MARKET IN INDIA 2013.PPT

SAMPLE i i l S h K i

Public: Domestic Company – Player A (2/4)

Financial Snapshot Key Ratios

Net Profit / LossTotal Income

27,565.740,000 1,50022,379.4

INR units INR units

31,123.3

Particulars y‐o‐y change (2012‐11)

2012 2011 2010 2009

Profitability RatiosOperating Margin ‐1.37 7.36% 8.73% 10.20% 10.15%

0

20,000

0

500

1,000

20‐‐

17,755.6

20‐‐ 20‐‐20‐‐

Net Margin ‐1.43 3.79% 5.22% 5.23% 5.02%

Profit Before Tax Margin ‐2.28 5.65% 7.93% 8.94% 7.87%

Return on Equity ‐6.69 16.84% 23.53% 23.69% 36.38%

Return on Capital Employed ‐5.65 30.15% 35.80% 41.23% 55.25%

Return on Working Capital ‐6.19 99.01% 105.20% 56.56% 95.34%

Return on Assets ‐1.89 11.74% 13.63% 16.90% 17.31%

Financial Summary

• The company earned a net profit of INR 1,178.8 mn in FY 2012, as compared to net profit of INR 1,437.9 mn in FY 2011

• The company reported total income of INR 31,123.3 mn in FY 2012 registering an increase of 12 9 per cent over FY 2011

Return on Fixed Assets ‐35.06 122.51% 157.57% 226.85% 185.65%

Cost RatiosOperating costs (% of Sales) 1.39 92.61% 91.22% 89.76% 89.81%

Administration costs (% of Sales)

1.22 13.04% 11.82% 12.36% 12.06%

Interest costs (% of Sales) 0.61 1.92% 1.32% 1.66% 2.33%2012, registering an increase of 12.9 per cent over FY 2011

• The company earned an operating margin of 7.36 per cent in FY 2012 a decrease of 1.37 percentage points over FY 2011

• The company reported debt to equity ratio of 0.30 in FY 2012, an increase of 36.04 per cent over FY 2011

(% )

Liquidity RatiosCurrent Ratio ‐1.25% 1.19 1.21 1.51 1.26

Cash Ratio 5.17% 0.08 0.08 0.12 0.12

Leverage RatiosDebt to Equity Ratio 36.04% 0.30 0.22 0.31 0.88

D b C i l R i

Indicators Value (21/01/2013)Market Capitalization (INR) xxTotal Enterprise Value (INR) xxEPS (INR)

Key Financial Performance Indicators Debt to Capital Ratio 27.74% 0.23 0.18 0.23 0.47

Interest Coverage Ratio ‐42.39% 3.84 6.67 6.16 4.37

Efficiency RatiosFixed Asset Turnover ‐7.66% 16.57 17.95 22.15 18.22

Asset Turnover 2.28% 1.59 1.55 1.65 1.70

Current Asset Turnover 5.04% 2.18 2.07 1.86 1.96

13

EPS (INR) xxPE Ratio (Absolute)‐09/01/2013 xx

Improved Decline

Working Capital Turnover 11.77% 13.39 11.98 5.52 9.36

Capital Employed Turnover ‐7.31% 3.41 3.68 3.45 3.84


SAMPLE Public: Domestic Company – Player A (3/4)

Key Business Segments Key Geographic Segments

100%

Others

Lighting

Engineering & Projects

Consumer Durables

100%

India

India has been the only

29.6% 33.1% 30.3% 26.8%

100%

50%

0%24.7%

48.4%

23.0%

46.6%42.8%42.7%

0%

50%

100%

100%

India has been the only revenue generating

segment for ‐‐ during 20‐‐

Key Recent Developments

0%

20‐‐20‐‐20‐‐20‐‐

0%

20‐‐

Description News

Overview • xx

Microwave Ovens Range • xx

14

Note: Business segments and Geographic segments are based on revenues


SAMPLE Public: Domestic Company – Player A – SWOT Analysis (4/4)

• xx• xx

S WS W

TO• xx

• xx

15MICROWAVE OVENS MARKET IN INDIA 2013.PPT

SAMPLE Appendix

Ratio Calculations

Operating Margin (Operating Income/Revenues)*100

Ratio Calculations

Current RatioCurrent Assets / Current Liabilities

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin (Income Before Tax / Revenues *100

(N I / Sh h ld

Cash Ratio{(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

Debt to Equity Total Liabilities / Shareholders E it

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

q yEquity

Debt to Capital Ratio{Total Debt / (Shareholders Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Return on Working Capital (EBIT / Working Capital) *100

Return on Assets (EBIT / Total Assets)*100

Return on Fixed Assets (EBIT / Fixed Assets) *100

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Operating Costs (% of Sales) (Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Sales / (Shareholders Equity +


Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Capital Employed Turnover Sales / (Shareholders Equity + Total Debt)

Thank you for the attentionThe Medical Devices Market – India report is part of Research on India’s Healthcare Series.For more detailed information or customized research requirements please contact:

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