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It’s Not Gold or Crypto : THIS Sector Is Quietly WINNING in INDIA | Aditya Khemka | FWS 90

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It’s Not Gold or Crypto: THIS Sector Is Quietly WINNING in INDIA | Aditya Khemka | FWS 90

Key Finance-Specific Content Summary

Sector Focus: Indian Healthcare Sector

Returns & Growth

  • Over the last decade, investing ₹100 in Nifty50 would yield about ₹420-430 (~12% CAGR).
  • The same ₹100 invested in India-focused healthcare companies would yield ₹1,300 (~50% CAGR), roughly 3x faster growth than Nifty50.
  • Healthcare sector allocation in Nifty50 is very small (~3%), mostly in exporters like Sun Pharma, Dr. Reddy’s, Cipla, which have slow growth (1-2%) as they focus on mature Western markets.
  • Indian domestic healthcare companies focusing on branded generics and hospitals grow at 10-12%+.

Valuation Comparison

  • Largest food & beverage and clothing retailers trade at ~100x cash earnings.
  • Apollo Hospitals (largest hospital chain) trades at <50x cash earnings with ~17% ROE, just above cost of equity (~15%), indicating no supernormal profits.
  • Healthcare companies focused on Indian markets (e.g., Torrent Pharma) have shown extraordinary returns (Torrent Pharma up ~7x in 10 years vs. Sun Pharma ~30% growth).
  • Healthcare sector stocks are undervalued relative to their growth potential compared to other sectors.

Healthcare Subsectors

There are five main subsectors plus one ancillary sector:

  1. Unbranded Generics Examples: Sun Pharma, Cipla, Lupin, Cadila

  2. Branded Generics Examples: Torrent Pharma, Mankind Pharma, Mcure

  3. Hospitals (fastest growing subsector)

  4. Diagnostics (second fastest growing)
  5. API and CDMO (Active Pharmaceutical Ingredients and Contract Development & Manufacturing Organizations)
  6. Ancillary sectors: Healthcare insurance, medical devices, and related industries

Sector Growth Drivers

  • India’s healthcare spend has increased from 2.7% to 3.4% of GDP in the last decade.
  • Per capita GDP is ~$24,500 (India’s), and as income rises, spending on healthcare grows faster than food, clothing, or other essentials.
  • India is severely underpenetrated in hospital beds: 0.8 beds per 1,000 population vs. global average ~2.7 beds per 1,000 (27 per 10,000) and developed markets like South Korea with 12-13 beds per 1,000.
  • Hospitals face supply constraints due to shortage of doctors and nurses, many of whom migrate abroad for better pay.
  • Government insurance schemes (e.g., Ayushman Bharat) exist but pay low rates, limiting hospital profitability.
  • Healthcare insurance penetration is low but improving, recently made GST-free, which should increase affordability and penetration.

Key Companies & Investment Picks

  1. Healthcare Global Enterprises (HCG)

    • Oncology-focused hospital chain
    • Market cap ~₹9,500 crores
    • Cash flow ~₹320 crores
    • Trading at ~30x earnings vs. Apollo Hospitals at 50x
    • Oncology patients have high lifetime value (LTV) due to recurring visits

  2. Krishna Diagnostics

    • B2G (business-to-government) diagnostic lab operator managing government hospital labs via PPP (public-private partnerships)
    • Revenue growth from ₹8 crores in 2011 to ₹700 crores in 2025 (~100x growth)
    • Offers high-quality, subsidized diagnostics with advanced equipment at lower prices due to high volume utilization
    • Valuation ~10x earnings vs. Dr. Lal Pathlabs at 35-40x

  3. Thyrocare Technologies

    • B2B pathology diagnostics, operates in 3,500+ pin codes expanding to 9,500+
    • NABL certification rate of 97% (vs. Indian average 2%)
    • Focuses on backend processing, partnering with unorganized labs to reduce costs and increase accuracy

Investment Strategy / Portfolio Construction (Aditya Khemka’s Personal Portfolio)

  • Total capital divided into three main buckets:

    • 30% in gold and silver (physical, derivatives, ETFs) as protection against currency debasement
    • 30% in his own healthcare-focused equity funds (which have delivered 50%+ CAGR)
    • 30% in real estate, real assets, and other funds
    • 10% cash liquidity to take advantage of uncertain markets and potential asset calls

  • Equity allocation is ~40% of net worth, with 75% of equity in healthcare (~30% of total net worth).

  • Diversification is important despite healthcare being secular growth; also invests in NBFCs, infrastructure, and cement for cyclical exposure.

Macro & Risk Context

  • Inflation expected to rise in 18-24 months due to liquidity injection, favoring sectors that can pass on costs such as healthcare, consumer staples, oil & gas, and commodities.
  • Healthcare is recession-proof since demand is inelastic (people will seek healthcare regardless of economic downturns).

  • Currency debasement risk due to weakening US dollar and geopolitical shifts:

    • China has reduced US bond holdings from $1.2 trillion to ~$750 billion, moving funds into gold and silver.
    • India (households + RBI) hold 12,000-13,000 tons of gold, potentially making India very wealthy if a gold standard or currency debasement occurs.
    • Dollar dominance is challenged by BRICS currency initiatives and local currency trade agreements (e.g., India-Russia).

  • No international investing; all investments are India-centric due to currency and geopolitical risk and lack of suitable vehicles.

Other Sectors Mentioned

  • NBFCs and Microfinance Institutions (MFIs) poised for growth as Indian households deleveraged post-COVID and are ready for a credit upcycle.
  • Education sector is secular but lacks enough publicly listed companies to build a diversified portfolio.

Key Performance Metrics & Financials

Company Market Cap (₹) Revenue / Cash Flow (₹ crores) ROE (%) Valuation (P/E or Cash Earnings) Notes Apollo Hospitals 1 lakh crore Cash flow ₹2,100 crores ~17% ~50x Largest hospital chain Torrent Pharma 1 lakh crore - - 7x stock price growth in 10 years Focused on Indian branded generics Krishna Diagnostics - Revenue ₹700 crores (2025) - ~10x earnings B2G diagnostic lab operator Thyrocare Technologies - - - - 97% NABL-certified labs

Methodology / Investment Framework

  • Focus on secular growth sectors with structural tailwinds (healthcare, education, NBFCs).
  • Identify subsectors and companies with:
    • Strong growth potential (e.g., hospitals, diagnostics, API/CDMO).
    • Competitive advantages (e.g., specialization in oncology, B2G/B2B models).
    • Attractive valuations relative to growth and peers.
  • Multi-asset allocation for risk management: gold/silver as inflation hedge, real estate as real asset, cash for liquidity.
  • Avoid over-concentration; diversify across sectors and asset classes.
  • Prefer companies focusing on their core competency rather than trying to do everything.
  • Invest with a long-term horizon (5 decades runway in healthcare).
  • Consider macroeconomic and geopolitical risks, especially currency debasement and inflation.

Explicit Recommendations / Cautions

  • Healthcare is undervalued and underappreciated in India’s equity markets, presenting a unique opportunity.
  • Inflation will rise, favoring sectors with pricing power like healthcare.
  • Currency debasement risk justifies holding significant gold and silver.
  • Healthcare insurance penetration needs to improve for sustainable sector profitability.
  • Talent shortage in healthcare (doctors, nurses) is a bottleneck and a risk factor.
  • Sector rotation still relevant in cyclical sectors; secular sectors like healthcare require substantial but not exclusive allocation.
  • Avoid international equities due to currency and geopolitical risks.

Assets, Tickers, and Instruments Mentioned

Stocks / Companies

  • Sun Pharma (Sunfarma)
  • Dr. Reddy’s Laboratories (Dr. Eddies)
  • Cipla
  • Torrent Pharma (Torrent Farmer)
  • Apollo Hospitals
  • Healthcare Global Enterprises (HCG)
  • Krishna Diagnostics
  • Thyrocare Technologies
  • Dr. Lal Pathlabs

Sectors

  • Healthcare (subsectors: branded generics, unbranded generics, hospitals, diagnostics, API/CDMO, insurance, medical devices)
  • NBFCs and Microfinance Institutions (MFIs)
  • Education (limited listed opportunities)
  • Consumer Staples
  • Oil & Gas
  • Commodities (steel, aluminum)

Assets

  • Gold and Silver (physical, derivatives, ETFs)
  • Real Estate
  • Cash / Liquidity

Presenters / Sources

  • Aditya Khemka – Chief Investment Officer, InCred Asset Management, healthcare sector specialist with 50%+ CAGR track record.
  • Host: Name not explicitly mentioned; referred to as Shahan or Sharon in conversation.

Disclaimers

  • Not explicitly stated as financial advice but framed as personal investment strategy and views.
  • Emphasis on personal circumstances influencing asset allocation.
  • Acknowledges unpredictability of macro events and inflation timing.
  • Encourages long-term investment horizon and diversification.

Summary

Aditya Khemka presents a compelling case for Indian healthcare as a secular, high-growth, undervalued sector with structural tailwinds driven by rising incomes, underpenetration, and demographic trends. He highlights specific subsectors (hospitals, diagnostics, API/CDMO) and companies with strong growth and attractive valuations.

His personal portfolio balances healthcare equity (30%), gold/silver (30%), real assets (30%), and cash (10%) to manage inflation and currency risks amid geopolitical uncertainty. He advises caution on inflation, currency debasement, and talent shortages but remains bullish on healthcare’s multi-decade growth runway.

Other sectors like NBFCs and education are also noted but less investable currently. The conversation blends micro company analysis with macroeconomic and geopolitical context, offering a multi-dimensional investment framework focused on India.

Original video