Market Research Report :Medical Devices Market in India 2013 by Netscribes, Inc.

Medical Devices Market India Medical 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:

Drivers & Challenges

Trends Trends

Government Government Involvement Competitive Landscape

Challenges:

 Improving health infrastructure  Increasing healthcare spending  Changing demographics and growing target consumer group  Increasing lifestyle diseases and therapies  Increasing medical tourism in India  Growing health insurance market

 Outsourcing/Relocating of manufacturing facilities  Increasing joint ventures and tie‐ups  Various exhibitions and trade fairs

 High dependency on imports  Lack of standard regulatory structure

 Increasing demand for refurbished devices  Focus on cost reduction and innovation  Use of plastics in medical devices

 Govt. bodies and associations such as MoHFW, CDSCO and AIMED are aiming to provide medical d i devices in India a regulatory structure in order to promote indigenous production i I di l i d i di d i  CDSCO has laid down registration and license mechanisms to regularize imports of drugs and devices Major Players

Company A

Company B

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

Company C

•Economic Indicators •Introduction •Market Market Overview Overview •Export Import •Distribution Channel •Drivers & Challenges •Drivers & Challenges •Trends •Government Involvement Government Bodies Government Regulations Government Initiatives

•Competitive Landscape •Recent Investments Strategic Recommendations Recommendations •Strategic •Appendix MEDICAL DEVICES MARKET IN INDIA 2013.PPT

SAMPLE

Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn 15 14

p1 o1 n1 m1

13 12 11

14.12 o3 n3 m3

p2 o2 n2 m2

o4 n4 m4

10 Q1

Q2 20‐‐ ‐ ‐‐

20‐‐ ‐ ‐‐

Q3 20‐‐ ‐ ‐‐

Inflation Rate: Monthlyy % b

1.0

08 0.8 0.6

Oct 20‐‐ ‐ Nov 20‐‐

Nov 20‐‐ ‐ Dec 20‐‐

0.4 0.2 0.0

Aug 20‐‐ ‐ Sep 20‐‐

Sep 20‐‐ ‐ Oct 20‐‐

PHARMACY RETAIL MARKET IN INDIA 2013.PPT

Dec 20‐‐ ‐ Jan 20‐‐ 4

Medical Devices are classified as per the risk level and their intended use Medical Devices – Definition • 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 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 A Low Risk • Includes devices such as thermometers and tongue depressors

Class B Low‐moderate Risk

Class C Moderate‐high Risk

• Hypodermic needles, Hypodermic needles suction equipment

• Lung ventilator, bone Lung ventilator bone fixation plate

Class D High Risk • Heart valves, Heart valves implantable defibrillator

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

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

Growing population along with a high growth economy will be instrumental in driving demand for medical devices Market Overview (1/3)

Market Size : Healthcare in India

• The healthcare market in India has huge potential to grow  India is home to more than 1.21 bn people I di i h t th 1 21 b l  Basic infrastructural facilities are lacking

• Medical devices market is marked by high value imports of expensive and sophisticated devices • In terms of technology – gy high end medical devices g are 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

• The various stakeholders in the medical devices industry include manufacturers, distributors, hospitals chains, pathology labs and diagnostic centers • In India, Town M has positioned itself as a medical d h d lf d l devices hub  Proximity to City N and having a large pool of technical staff helps Town M to maintain its edge

INR units A%

6 000 6,000

A 1

20‐‐

20‐‐e

4,000

A5 A4

2,000 0

20‐‐e

Market Size: Medical Devices INR units

500 400 300

X5 X4

200 100 0

20‐‐

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

20‐‐e

Segments in the Market (1/2) Imaging Devices

Market Size & Growth

• Products in this segment include ultrasound scanners, CT scanners, x‐ray equipment, MRI scanners, PET scanners, mammograms and fluoroscopes d fl • 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

INR units 60

20 0

20‐‐

Patient Monitoring

20‐‐

20‐‐e

Market Size & Growth

• Products in this segment include ECG and EEG monitors, surgical concentrators, multipara monitors, pulse oxymeters • Currently, it is the second largest segment in the medical devices market and is growing at an impressive rate of P% • Companies operating in this segment include P, Q, R and S

INR units 30

20‐‐

10 0

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

20‐‐e

Drivers & Challenges – Summary

Drivers Improving health infrastructure Increasing healthcare spending

Challenges

Changing demographics and growing target consumer group

High dependency on exports

IIncreasing lifestyle diseases and i lif l di d therapies

Lack of standard regulatory structure

Increasing medical tourism in India Growing health insurance market

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

Key Trends

SAMPLE Outsourcing/Relocation of manufacturing facilities

Increasing joint ventures and tie‐ups

Various exhibitions and trade fairs Key Trends

Increasing demand for refurbished devices

Focus on cost reduction and innovation

Use of plastics in medical devices MEDICAL DEVICES MARKET IN INDIA 2013.PPT

CDSCO have highlighted the areas of improvement for the medical devices market Central Drug Standard Control Organization (CDSCO) • It is the authority regulating medical devices in India under Ministry of Health and Family Welfare (MoHFW) • 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 p g p CDSCO 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 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 registration • 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 devices and a regulatory process implementation phase to make it an all‐inclusive process

The Central Licensing Approval Authority (CLAA) Serves as the main regulatory body for medical devices that will classify medical d i devices, and any manufacturer seeking a d f t ki less stringent classification must justify it to the CLAA

Act and Regulatory status of CDSCO d l f

The Drugs & Cosmetics Act (DCA) 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 devices 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 the manufacturer to demonstrate conformity with the relevant regulatory requirements

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

Competitive Benchmarking (2/5) Key Ratios of Major 3 Companies – Operational Basis (FY 2012) (1/3) Operating Margin

% 6

Net Margin

4.08

1.85

2 0

‐0.03

‐2 2

‐0.04

‐4

‐0.04 ‐3.44

Company A

Company B

Company C

• xx

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

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

Tel No.

Fax No.

Website

Year of Incorporation

Ti k S b l Ticker Symbol

Stock Exchange

Offices and Centres – India

Mumbai

Products and Services Category

Head Office

Products/Services

Key People Domestic Appliances

Name Lighting Products

Designation

Note: Product list is not exhaustive MICROWAVE OVENS MARKET IN INDIA 2013.PPT

SAMPLE

Public: Domestic Company – Player A (2/4) Financial Snapshot i i lS h Total Income INR units 40,000

17,755.6

22,379.4

20,000

K Key Ratios i

Net Profit / Loss INR units 27,565.7 1,500 31,123.3 1,000 500

20‐‐

Financial Summary

Particulars

y‐o‐y change 2012 (2012‐11)

2011

2010

2009

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

‐1.37

7.36%

8.73%

10.20%

10.15%

‐1.43

3.79%

5.22%

5.23%

5.02%

‐2.28

5.65%

7.93%

8.94%

7.87%

‐6.69

16.84%

23.53%

23.69%

36.38%

‐5.65

30.15%

35.80%

41.23%

55.25%

‐6.19

99.01%

105.20% 56.56%

95.34%

‐1.89

11.74%

13.63%

17.31%

‐35.06

122.51%

157.57% 226.85% 185.65%

1.39

92.61%

91.22%

89.76%

89.81%

1.22

13.04%

11.82%

12.36%

12.06%

0.61

1.92%

1.32%

1.66%

2.33%

‐1.25%

1.19

1.21

1.51

1.26

5.17%

0.08

0.12

36.04%

0.30

0.22

0.31

0.88

27.74%

0.23

0.18

0.23

0.47

‐42.39%

3.84

6.67

6.16

4.37

‐7.66%

16.57

17.95

22.15

18.22

2.28%

1.59

1.55

1.65

1.70 1.96

16.90%

Cost Ratios

• 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 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

Key Financial Performance Indicators Indicators

Value (21/01/2013)

Market Capitalization (INR) Total Enterprise Value (INR) EPS (INR) EPS (INR) PE Ratio (Absolute)‐09/01/2013

xx xx xx xx

Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) (% )

Liquidity Ratios Current Ratio Cash Ratio

Leverage Ratios Debt to Equity Ratio D b Debt to Capital Ratio C i lR i Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

5.04%

2.18

2.07

1.86

11.77%

13.39

11.98

5.52

9.36

‐7.31%

3.41

3.68

3.45

3.84

Improved

MICROWAVE OVENS MARKET IN INDIA 2013.PPT

Decline

SAMPLE

Public: Domestic Company – Player A (3/4) Key Business Segments

Key Geographic Segments

Consumer Durables

Lighting

Engineering & Projects

Others

India

100%

50%

42.7%

42.8%

46.6%

48.4%

29.6%

33.1%

30.3%

26.8%

23.0%

24.7%

20‐‐

0% 20‐‐

20‐‐

50%

100%

India has been the only India has been the only revenue generating segment for ‐‐ during 20‐‐

0% 20‐‐

Key Recent Developments Description

News

Overview

• xx

Microwave Ovens Range

• xx

Note: Business segments and Geographic segments are based on revenues MICROWAVE OVENS MARKET IN INDIA 2013.PPT

SAMPLE

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

• xx

MICROWAVE OVENS MARKET IN INDIA 2013.PPT

• xx

Appendix

SAMPLE

Ratio

Calculations

Ratio

Calculations

Operating Margin

(Operating Income/Revenues)*100

Current Ratio

Current Assets / Current Liabilities

Net Margin

(Net Profit / Revenues) *100

Cash Ratio

Profit Before Tax Margin

(Income Before Tax / Revenues *100

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

q y Debt to Equity

Total Liabilities / Shareholders E it Equity

Debt to Capital Ratio

{Total Debt / (Shareholders Equity + Total Debt)}

Interest Coverage Ratio

EBIT / Interest Expense

Fixed Asset Turnover

Sales / Fixed Assets

Asset Turnover

Sales / Total Assets

Return on Equity (ROE) Return on Capital (ROCE) Return on Working Capital

(Net Income / Shareholders (N I / Sh h ld Equity)*100 EBIT / (Total Assets – Current Liabilities)*100 (EBIT / Working Capital) *100

Return on Assets

(EBIT / Total Assets)*100

Return on Fixed Assets

(EBIT / Fixed Assets) *100

Operating Costs (% of Sales)

(Operating Expenses / Sales) *100

Current Asset Turnover

Sales / Current Assets

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Working Capital Turnover

Sales / Working Capital

(Interest Expenses / Sales) *100

Capital Employed Turnover

Sales / (Shareholders Equity + Sales / (Shareholders Equity + Total Debt)

Interest Costs (% of Sales)

MEDICAL DEVICES MARKET IN INDIA 2013.PPT

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