Healthcare Is Poised For Consolidation, Says Karma Capital's Rushabh Sheth

India's economic trajectory is set to be distinctly more oriented towards domestic factors in comparison to China, according to Rushabh Sheth, co-founder of Karma Capital Advisors Pvt.

During China's phase of transitioning from a per capita income of $2,200 to $5,000, its economy was largely driven by a manufacturing-focused approach, Sheth said in an interview with BQ Prime's Niraj Shah.

"So, we are slightly different there in terms of the concept of the economy. However, we have multiple opportunities from multiple directions," he said.

India will always see a significant amount of consumer discretionary spends, which is significantly larger than those seen in some of the Southeast Asian economies, which went through a similar growth cycle, Sheth noted.

Healthcare

Sheth is bullish on the healthcare sector as it offers substantial potential for growth in the upcoming three to five years, driven by consolidation.

"My sense is it's a long way to go because there's a very long structural runway for growth for healthcare in the country," Sheth said. Karma Capital's largest exposure is to drug manufacturing but it is "positive" on the hospital sector as well.

Sheth predicts a phase of consolidation in the fragmented sector.

In the case of drug manufacturers, even the top 20 companies might collectively command only around 45% to 50% of the market, he said. That, according to him, represents an immense prospect given the considerable market size and potential for growth.

With a population of 140 crore to serve, it's imperative to address the healthcare needs of the masses, he said. It's clear that healthcare is poised to claim an increasingly substantial share of discretionary expenditures for the majority, he said. "I think healthcare will be one sector which will see significant delta in consumer spends."

Media

There is a huge opportunity in the media space as the screen proliferation continues, he said. The number of players now in the space to generate content which keeps people engaged is very limited, according to Sheth.

"So we think that this is inflection point for the whole media business," he said.