Kovai Medical Center Hospital Ltd

Kovai Medical Center Hospital Ltd

BSE: 523323 NSE: KOVAI
ISIN: INE177F01017

Market Cap: [Rs.Cr.] 206
Face Value: [Rs.] 10

Industry: Healthcare

Kovai Medical Centre & Hospital (Kovai) a leading south Indian
850 bed city-based hospital  and reporting better-than- expected quartery results,
led by healthcare industrial growth.

Topline for the year 2012-13 is expected to growth by 44% from Rs 222Cr to Rs 319 Cr.
The bottomine is expected to post a growth of 123 % from Rs 12.1 Cr to Rs 27 Cr

Kovai`s profitability witnessed pressure mainly on the back of higher than expected
interest cost from Rs 28 Cr in 2013 to Rs 17 Cr in 2012.

EPS of Rs. 24.6 and at CMP as on 3/1/2013 Rs. 185  the stock trades
at forward PE of 7.5 x as against industrial PE of 34x

The book value shall be Rs 77.8 (after expected payout of Rs 2.6 per share)
Thus forward P/BV is  2.37x as against industrial PE of 4.7x

Considering the above a price target of Rs. 285 at PE 11.6x seems within reach by september 2013

The investment of  Rs 240 Cr made in 2011-12 for expansion plans, equipment and
providing specialty services has increased beds capacity by 200.

Kovai has also started medical college  providing all paramedical courses for post graduation programmes.

The institution serving to people of kerala as well as tamil nadu have mainitained good rapport with political heads of state and visibility in media

The loan book after implementation of expansion is Rs 208 Cr

http://www.kmchhospitals.com/about_us/press/2012/07/KMCHNABH-TheHindu11072012PGNo5.html

THE STOCK HAS MOVED FROM Rs 100 to Rs 185 since first review in March 2012

Updates Feb 2013

Span Diagnostics to excel in In-Vitro Diagnostics

Mr. Veeral Desai, Managing Director, Span Diagnostics, holds a bachelor degree in pharmacy and is associated with the company since 1991. He is driving force behind bringing in newer technologies and modernizations of manufacturing facility. He has been inspiring force behind many unprecedented decisions like implementing SAP, modernizing plant, introducing automation, upgrading manufacturing facilities to meet with US FDA standard, divisional sing marketing etc.

http://www.span.co.in/company/overview/milestones_history.htm

Span Diagnostics was reorganized in 1976, with an emphasis on in-house R&D to develop more and more products, keeping the customer needs in focus and quality under constant vigil. Dr. Pradip K. Desai, evolved into a start-up company in 1972, as Desai Laboratories. The goal was to indigenously develop and manufacture a comprehensive range of ready-made diagnostic reagents needed by clinical pathology laboratories. The initial efforts yielded success and SPAN became a private limited company in 1981.The company went public in 1994,to bring in more resources and expand further. Concurrently, Span Diagnostics Ltd. with a strengthened marketing & distribution network, emerged as a leader in Indian diagnostic market. Today, SPAN – a legendary name in the industry, is reckoned for its wide range of quality products and dedicated services under the purview of ISO 13485:2003 & ISO 9001:2000.The company operates through strategic marketing divisions, ensuring focused approach to specific customer segments. The company came up with 1:1 bonus issue in July 2010 rewarding the shareholders amply

About product portfolio & size of the industry

In-Vitro Diagnostics Industry (IVD) currently accounts for 2.5 % (Rs.18bn) of the Indian Healthcare market. The IVD Reagent market size is pegged at Rs 6bn and the IVD Instruments market size is worth Rs12bn. The IVD industry is growing at the rate of 18 % annually and is expected to continue to grow at the same rate for the next five years.

The company has strong presence in domestic market with Blood banking, Infectious disease, Clinical Chemistry and Hematology products and has more than 50% market share (in terms of number of tests) in HIV, HCV, Tuberculosis, Syphilis, Typhoid and Malaria. Span has significant market share in Blood Grouping reagents, Clinical chemistry reagents, Rheumatology and Hematology. Span Diagnostics is pioneer in taking initiative for developing and launching diagnostics for world's neglected diseases like Cholera, Filaria, Kala-azar, Plague and malaria.

Some of the new trends witnessing in this segment
The increasing awareness about health has brought about an increase in lifestyle-related diseases or symptoms diagnosis. Earlier, only in case of any visible symptoms patients were referred for diagnosis of specific symptoms. But now the diagnosis is performed routinely as a preventive measure.
http://www.span.co.in/Portal/News/2_1_Corporate%20India.pdf
Products giving  more revenues
Major revenue comes from infectious disease diagnosis (HIV, HCV, Tuberculosis, Syphilis, Typhoid and Malaria), followed by hematology (Blood Grouping reagents and Cell counter) and Clinical chemistry (Liquid stable reagents for auto analyzers). Currently, the company exports its products to more than 90 countries through its distributor network contributing 10% of the total revenue. Major export is in the region of Latin America, Africa and Russia.

About clients
The total number of clinical laboratories in India is between 38,000 and 40,000. Out of which more then 90% labs uses one or the other reagents manufactured by Span. Apart from these, Span also has been successfully making supply of HIV test kits for National AIDS Control program since last 8 years and Malaria test kits for Malaria Control program since last 5 years in various government programs.
http://www.span.co.in/company/resources/sales_distribution.htm

About recent capex and Plans
The major investment to the tune of Rs12 to 15 crore has been incurred mainly for modernization and capacity expansion of our plant and make it compliant to US FDA requirements. Part of it has been used for technology acquisition and export market development also.

Company plans to enter into high-end emerging technology platform of molecular biology, introduce novel and advanced rapid tests and enter physician labs with innovative Point of Care Tests based on monoclonal antibodies and recombinant antigens developed and manufactured in-house. Company has made significant investment for indigenous development & manufacture of instruments and the first product has been launch in financial year 2012.
http://www.span.co.in/company/resources/manufacturing.htm
Target for this year and for next five years
The company will continue its 20% growth trajectory for next  years and from FY2014,
the growth momentum will increase significantly due to the new products launched during that year.
http://www.span.co.in/downloads/Audited-financial-result-March-2011.pdf

Updates
Span Diagnostics Ltd has informed BSE that the Company has received a prestigious order worth Rs. 21.45 Crores from Ministry of Health & Family Welfare, Department of AIDS Control. National AIDS Control Organization, Government of India through RITES Ltd. for supply of HIV (Rapid) Test Kits. The deliveries are to be made within a period of 9 (Nine) Months.
http://www.bseindia.com/stockinfo/anndet.aspx?newsid=818503c1-f324-49f5-b660-0c35c835b213

Indian Health Care Sector to grow 20%

India healthcare
By 2011 India is INR 8861000 crore (US$ 1846 billion) economy of
which healthcare is a INR 240000 crore (US$ 50 billion) industry and is expected to grow up to INR 900000 crore (US$ 200 billion) by 2020.
Indian healthcare industry has distinct merits of clinical excellence and low costs. This sector tenders much potential to health careplayers as there are frequent lifestyle-related and other diseases in the country. The increasing elderly population and increase in income levels are also urging for betterfacilities in the industry.


Despite severe global recession and meltdown Indian economy seems to be doing reasonably well. Even at the height of recession the sectors like food, health and education were insulated and they havecontinued to grow. It is also interesting to note that the State and Central Government has realised led to the huge investments in the sectors during the last two budgets. It is expected that in the ensuing budget, lot ofimpetus will be given to health care.


According to a study by Mckinsey and the Confederation of Indian Industry, medicaltourism in India could become a US $2-billion industry by 2013. Credit Suisse estimates medical tourism to be growing at about 25-30 per cent annually. Indian hospitals are fastbecoming the first choice for an increasing number of foreign tourists.


According a report by Deloitte, a financial advisory, audit and consulting firm, in 2010, about 550,000 patients from abroad have visited India for medical treatment. Themain reason behind, would be cost-cutting because medical costs are four to five timeslesser in India than US. Anti-aging procedures such as neck lifts andface lifts and liposuction procedures are some of the most sought-after cosmeticprocedures in India and on an average, cost barely 25 per cent of what they cost in theUK.



Health Insurance
The earnings of the people in the business services sector goes up to US$ 20,000 a year while that of nearly 150 million Indians have annual income of more than US$1,000.
There is a tremendous scope for growth in the health insurance sector, as the sector atpresent covers only 10% of the entire Indian population. According to a study by theChamber of Commerce and Industry, the health insurance sector is expected to grow to US$6.75 billion by 2014.

Healthcare and IT
Hospitals have realised that information technology (IT) can be an effective tooltowards efficient systems. According to a report by Springboard Research, India has thefastest growing healthcare IT market in Asia, with an expected growth rate of 20 per cent,followed closely by China and Vietnam. In fact, the Indian healthcare technology market ispoised to be worth more than US$ 254 million by 2013.

Beyond Cost Advantage

However, the Indian healthcare is not about cost advantage only.
It has a high successrate and a growing credibility.
* Indian specialists have performed over 500,000 major surgeries and over a millionother surgical procedures including cardio-thoracic, neurological and cancer surgeries,with success rates at par with international standards.
* The success rate of cardiac bypass in India is 98.7 per cent against 97.5 per cent inthe U.S.
* India's success in 110 bone marrow transplants is 80 per cent.
* The success rate in 6,000 renal transplants is 95 per cent.
* India has the second highest number of qualified doctors in the world.


INVESTMENTS
According to a study of Confederation of Indian Industry (CM), the Indian healthcareindustry will need INR 24000 crore US$ 50 billion annually for the next 10 years. Similarly, the Technopak Advisor's report says it may require immediate investments of INR 39360 crore US$ 82 billion for making additional beds in the industry.

In order to meet the demand for healthcare in India and improve the availability of hospital beds and doctors, India's infrastructure will need to be improved significantly.CII-McKinsey also estimates that 20% of the additional beds will be required for specialty healthcare needs such as cancer and cardiac diseases in view of the growing incidence ofsuch diseases.
So which companies are to benefit from this
Apollo Hospitals Enterprise Ltd ISIN: INE437A01024
Kovai Medical Center & Hospital Ltd ISIN: INE177F01017

Fortis Healthcare (India) Ltd ISIN: INE061F01013
Indraprastha Medical Corporation Ltd ISIN: INE681B01017

Kochi Metro to boost property prices in Kochi

The Kochi Metro is a rapid transit system for the city of Kochi, India which is being set up
at an estimated cost of 5,146 crore (US$1.13 billion), and is expected to be completed in 2016.
The land requirement for the implementation of the project comes to an extent of 31.9216 hectares comprising  of 9.3787 hectares of government land and 22.5413 hectares of private land.
About 53% of the cost of the project will be finance obtained from Japan Bank for International Cooperation (JBIC).
A meeting of the District level Purchase Committee (DLPC) during Ist week of Febuary 2012, has recommended paying Rs. 31.35 lakh per cent of land to owners surrendering the land for the widening of the Banerjee Road and Jos Junction-South Railway Station Road ahead of the proposed Kochi metro rail.

Landowners had asked a week's time to respond to the land value promised by the DLPC held at the camp office of the District Collector . Land acquisition officials will convince owners in cases where land and buildings need to be acquired with  compensation  paid promptly to all those willing to surrender their land.

Land is being acquired for widening the Banerjee Road by 22 meters and the Jos Junction-South Railway Station Road by 18 meters. For this, 56.25 cents were being acquired on Banerjee Road and 37.5 cents in South. Officials will point out the land to be acquired in Banerjee Road on Wednesday, while in South it will be on February 14. Thereafter, the DLPC will meet again to finalise the matter.

In the meantime the Public Works Department (Buildings) had completed the assessment of the compensation to be paid for the portions of buildings to be demolished along these areas in connection with road widening.  As per the assessment, compensation varying between Rs. 10,000 and Rs. 2.89 crore, with an average of Rs. 1,000 for one sq.ft, had been fixed depending on the extent of demolitions. Age of the building had not been considered in determining the compensation. Building owners had been more or less satisfied about the rate of compensation.

Besides, a recommendation will be made to the State government to grant landowners surrendering land, relaxation in floor area ratio for buildings being constructed in the rest of their land. Efforts were also being made to give registration and stamp duty exemptions.

The Kochi Metro connecting Aluva-Petta will be completed in three stages and separate tenders will be awarded through bids. Each stage will be approximately 8 km. The advantage of this approach is that different contractors can take part in the work. It has decided to set up parking space at all metro stations.
The Ernakulam north overbridge is being pulled down as part of five Metro Rail-associated projects.
Other projects include construction of a new rail overbridge connecting Mullassery Canal Road and Salim Rajan Road and the widening of the road from Jos Junction to Ernakulam Junction Railway Station, renovation of MG Road and widening of Banerjee Road. Construction of the actual metro is expected to start in April 2012
Taillamp : Once government fixes base rate all the property transaction
will fetch price of about 50% more than the value fixed by government
http://www.kochimetro.org/index.php?option=com_content&view=article&id=63&Itemid=66

Indian Power project scenario 2012

The total Installed Capacity in the country at the end of 10th plan
(as on 31.03.2007) was 132330 MW
The actual power supply position during 2006-07 (end of 10th plan) was

The National Electricity Policy envisages “Power for all by 2012” and per capita
availability of power to be increased to over 1,000 units by 2011-12.
To achieve this, a total capacity addition of about 1,00,000 MW is required during
10th and 11th Plan period. After considering the actual capacity addition of 21,180 MW
in the 10th plan , a capacity addition of 78,577 MW  has been  proposed during 11th plan.

Of the above projects totalling to 48,955 MW (62.3% of the proposed capacity) are already
under construction. and for balance 29,402MW,Letter of Award is yet to be placed

The total thermal power plant capacity in 11th plan is 58,644 MW which is about 75% of
total capacity additions in 11th plan. The coal based capacity is about 90% of thermal capacity.
Due to uncertainty in availability of gas and its high price only about 4,289 MW gas based projects
have been included for benefits during 11th Plan.
These projectsare already under construction or have already tied up the gas supply.

Of the Hydro projects totaling 16,553 MW (21.0%) included in the 11th Plan. 14,431 MW
(87%) are under construction, 1,537 MW (9.5%) have been accorded concurrence
by CEA/State Government and are awaiting investment decision/work award and
585 MW (3.5%) the DPR is ready and concurrence of CEA/State

Nuclear projects totalling to 3,380 MW have been proposed for likely benefits during 11th plan.
Out of this, 220 MW (Kaiga U-3) has already been commissioned and the remaining projects
are under construction.


Non-Conventional Energy Potentials of India

India has significant potential for generation of power from Non- Conventional Energy
Sources such as Wind, Small Hydro, Bio mass, Tidal and Solar Energy which is ozone friendly
power. The total estimated medium-term potential (2032) for power generation from renewable
energy sources such as wind, small hydro, solar, waste to energy and biomass in the country is
about 1,83,000 MW. The details are given below:

The Installed Capacity at the beginning of the 10th plan was about 3500 MW.  A capacity addition of
about 6,750 MW had been achieved during the 10th plan making Installed Capacity 10, 256 MW.

Considering the progress made during the 10th plan, the Working Group for 11th Plan proposals for
New and Renewable Energy has proposed physical target of 14,000 MW Grid interactive renewable
power as furnished below.



Demand side updates
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Project implementation updates
---------------------------------

CHINA's GDP to grow at 8.6pc

Deteriorating demand from China's biggest trading partners in the European Union and the
United States has drags growth in the world's second-biggest economy down to its lowest-year 18.1 percent jump in retail sales. The GDP is expected to be in 8.6 pc for 2011-12

The pullback in activity has fuelled expectations that the government will take more forceful measures to bolster growth and save jobs, beyond the so-called fine-tuning it began to implement in October, in the face of a festering European debt crisis and a sharp slowdown in the domestic property sector.

Beijing reduced the amount of cash that banks have to hold as reserves in November for the first time in three years in a bid to shore up cooling economic activity and maintain a steady supply of credit to companies and consumers.

But official data has also shown a fall in fixed asset investment growth and a further slowdown
in the rate of property investment that has been a key driver of economic expansion.


Japanese manufacturers remained pessimistic about business conditions for the second straight month in January amid Europe's debt crisis and the slowing global outlook

India Inc to grow at the rate of 7 percent for 2011-12

Growth estimates for INDIA, Asia's third largest economy is expected to
expand at an annual rate of 7 percent this year 2011-12

the main reason for the deceleration in growth were

interest rate hikes by central bank to reign inflation

no solution visible for the harnessing the dirty borrower Greece and others from European union

the paralysis in government decision-making has harmed investment.

resulting in

Foreign fund inflows dried up in 2011 with net outflows in excess of $450 million,
from record inflows of more than $29 billion in 2010.

the rupee lost about 19 percent of its value against the U.S. dollar owing to the capital flight from the economy.

the BSE Sensex fell by almost 25 percent in 2011 making it among the world's worst performers.

the silverlining is still not visible

inflation in India, as measured by the wholesale price index, slowed to 7.47 percent in December,
but economists forecast prices to rise by an average 8.7 percent this fiscal,
before slowing to 6.5 percent in the year ending March 2013.

the RBI is expected to hold rates steady at 8.5 percent this quarter before cutting its benchmark
repo rate by 100 basis points this year, beginning with a 50 basis point reduction in the second quarter.

The lack of a final solution to the euro zone sovereign debt crisis is weighing on sentiment

The European Union is India's largest trading partner and accounted for trade in goods and services
worth over 60 billion euros in 2010, according to data from the European Commission.

TO block and unblock commercial SMS 1909

The Indian telecom Industry with nearly 900 million subscribers is the second largest wireless market
in the world. Low tariffs and direct reach to consumers has made SMS and direct calling one of the
most cost effective ways of selling services and products. However, telemarketing has brought with
 it serious issues of invasion of privacy and has become a major irritant to customers.


To holistically curb this growing menace and effectively regulate unsolicited commercial Calls and
messages, TRAI has notified "The Telecom Commercial Communication Customer Preference
Regulations, 2010". All the provisions of regulations come into force from 27th September, 2011.

The Telecom Commercial Communications Customer Preference Portal is a data base containing
a variety of information prescribed in "The Telecom Commercial Communications Customer Preference Regulations, 2010".
Customers- Customers (landline and mobile) who do not want to receive commercial communications
 can dial or SMS to 1909 (toll free) and register in either of the two categories:

HAVE YOUR REGISTERED YOUR MOBILE FOR RECEIVING / PREVENTING SMS
                               http://nccptrai.gov.in/nccpregistry/search.misc
Fully Blocked Category- stoppage of all commercial Calls/SMS

Partially Blocked Category- stoppage of all commercial Calls/SMS except SMS
from one of the opted preferences

For registering option using SMS, for 'fully blocked category', write "START 0" and send it to 1909.
For 'partially blocked category', send SMS 'START' with one or multiple options from the list of seven categories.

There are at present 7 preferences to choose from-
Banking/Insurance/Financial Products/Credit Cards-1,
Real Estate-2,
Education-3,
Health-4,
Consumer goods and automobiles-5,
Communication/Broadcasting/Entertainment/
IT-6,
Tourism-7.

For example: To receive messages relating to only Health products, then send SMS "START 4" to 1909. Similarly, for receiving messages relating to Real Estate and Education, send SMS "START 2,3" to 1909.

On successful registration, customer will receive an SMS confirming exercised options and a Unique Registration Number within 24 hrs. The registration will be effective within 7 days of placing the request
with the service provider. The customers can check the status of their registration by clicking on "Customer Registration Status".

Customer can also change the preferences after 7 days of registration or the last change of preference.
If customer receives UCC even after 7 days of registration, he can register a complaint with his service provider within 3 days of receipt of such UCC by dialing or sending SMS

Rasmussen Consumer Index

The Rasmussen Consumer Index, which measures the economic confidence of American consumers on a daily basis, gained a point-and-a-half  31 December 2011  to 78.8.

Just 49 % now have confidence in the stability of the U.S. banking system.

The latest Rasmussen Reports national telephone survey of homeowners shows that 21% now believe their home will be worth more in a year, up seven points from last month and the highest result measured since February 2011. Still, 27% say their home will be worth less in a year’s time, while 51% expect its value to remain about the same.

The Rasmussen Consumer Index and Investor Indexes are derived from nightly telephone surveys of 500 adults and reported on a three-day rolling average basis.

The baseline for the Index was established at 100.0 in October 2001. Readings above 100.0 indicate that confidence is higher than in the baseline month.

The Rasmussen Consumer Index reached its highest level ever at 127.0 on January 6, 2004. The all-time low was reached on March 10, 2009 at 54.7.

The Rasmussen Investor Index reached its highest level ever at 150.9 on January 7, 2004. The lowest level ever measured was 52.5 on March 9, 2009.

      The Rasmussen Index over years

UPDATES

The first Rasmussen Consumer Index of 2013, which measures consumer confidence on a daily basis, rose a point on Thursday to 98.3. Confidence is up half a point from a week ago, up four points from a month ago and up 14 points from three months ago.

Confidence has improved 16 points compared to the start of 2012. During this past year, the Rasmussen Consumer Index reached the highest levels of the past five years. However, it never topped 100, the baseline level of confidence measured in October 2001.