Mumbai, Apr 3 (IANS): Promising recovery trends have been witnessed for India's hospital sector as large players have gained market share, said HDFC Securities in a report.

Accordingly, the report cited secular growth, asset light models, India's huge demand-supply gap, rising health insurance penetration, high out-of-pocket spends, increase in medical tourism as compelling growth prospects for the industry.

The report said that adoption of "asset-light" models of expansion, enhanced focus on retail formats - pharmacy, diagnostics and digital initiatives - are expanding avenues of growth while keeping the balance sheet light.

"Post Covid, recovery trends are promising with large players gaining share after a severe impact in 1HFY21, the industry witnessed healthy recovery trends in the past quarter."

"Large players have gained market share as patients preferred visiting corporate chains or quality healthcare providers in the crisis time. We expect a gradual recovery in mature or flagship units of our covered companies as the international patient segment remains impacted."

Besides, the report said that other hospitals or new units in tier 1 or 2 locations have performed well and are expected to further gain traction.

"Other businesses received fillip during the crisis and their EBITDA are expected to grow at 20-30 per cent CAGR over FY20-23e."

Furthermore, the report pointed out that Capex trends are expected to remain moderated for the next two years.

"With headroom to operationalise beds at existing units and average occupancy at 60-70 per cent, we expect Capex trends to remain moderated for the next two years."

In addition, it said that pandemic has driven greater adoption of digital platforms but the customer behavior is still evolving.

"We believe the integrated offerings of digital platform (e-pharmacies, tele-consultation, diagnostics) and physical network could present meaningful synergies for players like Apollo (Apollo 24/7)."