See revenue from oncology segment to double over 5 years: Shivinder, Fortis Healthcare

See revenue from oncology segment to double over 5 years: Shivinder, Fortis Healthcare

In a chat with ET Now, Shivinder Mohan Singh, executive vice-chairman, Fortis Healthcare Limited, shares his business outlook. Excerpts:

ET Now: Do you think that, as is the case with the Indian economy, the pain is over and calendar 2015 looks pretty good?

Shivinder Mohan Singh: Well, as the sentiment is pretty much consistent around India, we certainly hope that clarity of direction is coming to play in the country. Pain is the function of a gradual decline.

I do not think it will decline immediately. Just like in our business as soon as you diagnose the problem, you start treating it and the problem starts going away in a while. The pain though starts dulling over the time. This is the phase we are in. I certainly believe that we are in good times going forward, though it will take a while for all the progress and all the reform to take into effect.

ET Now: Would you continue raising investments in the speciality facilities and is that an earnings and margins-accretive strategy or more a case of acquiring footprint for now?

Shivinder Mohan Singh: In the last 18 months, what we have done is reassigned and strategically looked at giving a direction to our business and clearly define where we want to be in, where we want to go.

Basically, we focussed now on our core strengths from a geography and portfolio perspective.

What we believe our (Fortis) strength is, and what we want to harness in the next three-five years is to build large multi-specialty hospitals and grow our investments in specialities that we believe are the future of the country. We look at our strength in the cardiac space with Escorts as our flagship, our mother-and-child space with La Femme as our flagship and we believe we have strengthened our oncology space. Therefore, we are looking at growing in all these three specialities apart from generic multi-specialty large facilities. We believe this is definitely an accretive strategy — an area that we are leveraging our strength and therefore the financial benefits will be much sooner than the long gestation period that healthcare facility generally have. Also the fact that we are very much core to what we believe is a strength for the organisation.

ET Now: Would oncology's revenue contribution increase from the current 3 per cent to healthy double digits in the next couple of years?

Shivinder Mohan Singh: Let me break that part into two parts — one in the short term and the next year or two.

I believe the segment is going to see at least double the space and speed of the organisation's growth simply because the investments we put into play in the last year or two. But if I look at it over the next five years, I would believe that this 5 per cent should pretty much double to almost 8-10 per cent just by virtue of the kind of focus and the kind of facility that we are investing in over the whole national footprint of the organisation. Definitely I see this as a core area of strength and focus, and I would assume that the margin of the total pie for oncology would be between 8 and 10 per cent over the four to five-year period.