‘Ayushman Bharat is a very big game changer’

BPL Medical Technologies, over the last half a century (established in 1967), has emerged as one of the pioneers in the Indian medical devices market. The company, since its acquisition by global investment bank Goldman Sachs five years ago, has been growing rapidly, says Sunil Khurana, CEO and MD in an interview with Mahesh Kulkarni of DH. Excerpts:

BPL has been making medical devices for 50 years now. How has been the progress so far?

BPL is now 51-years-old company and has been manufacturing ECG machines in India in collaboration with a Japanese company, when nobody thought of making them those days. Five years ago, Goldman Sachs invested around Rs 400 crore in this company and medical devices portfolio was taken out of the BPL Group and a new company - BPL Medical Technologies - was formed on August 10, 2013. Currently, BPL family owns 35% and 65% is held by Goldman Sachs.

What are the products you manufacture?

We have a complete range of medical devices. We have products like ECG machine, treadmills, defibrillators and a couple of other machines in cardiology. We also have entered into areas such as women and child care, imaging such as ultrasound, critical care for the hospital OTs, ICUs and we have invested a lot in this area. We have acquired a UK-based Penlon, a 75-year-old company in September 2015. Its a critical care products maker.

We bring their machines here and sell and we also produce some of their products here in India through a technology transfer. Vaporiser is a unique device in their range, which we make here.

Currently, where do you stand in the medical devices market?

Different products have different market share. We have a best market share, I would say like 30% in the ECG range, we may have 5% in some products like ultrasound. So 5% to 30% is our range. Since we have an establishment, a team, distribution network, knowledgeable staff, a clear vision and direction, it’s not a problem to gain market share in new products.

Can you elaborate on your growth?

We are growing at an average 25% annually. Today, we have a consolidated turnover of Rs 300 crore. With the average age of an individual increasing to 70 years compared to 35 years about seven decades ago, the population of senior citizens is growing in India. And that ageing population needs a lot of homecare medical devices like BP machine, small ECG machines, etc, which are connected to mobile apps. You cannot bring such aged people to hospitals every time. So, home care products market is set to grow rapidly and that is the market we are looking to address.

What is the accuracy level in homecare devices?

Accuracy is about 93% and it is not a diagnosis device. It is for homecare use only, which is typically suited for patients who have undergone a bypass surgery or there is a family history of cardiac issues and the family wants to check every month or 15 days. The product is available in the market and sold through our website also.

What is the price of these products?

These are very affordable products. An ECG machine is priced at Rs 18,000. We are targeting India and selected markets like Thailand. We are going to enter South East Asian countries and neighbouring countries. We want to build a network of distributors.

What is the opportunity for you with the government launching Ayushman Bharat project?

Ayushman Bharat, in our view, is a very big game changer for the healthcare side in India. About 40-50 crore people, who are underprivileged, are deprived of proper medical care. The government has taken a fundamentally very bold and major step, but this may take time to become a reality because healthcare is a state subject. Centre brings a policy and how that is adopted in states has to be seen.

What is the size of the medical devices market?

Medical device market is going to double in the coming years. The market is very fragmented and various kinds of products are available like hearing aid, vision device, syringe, CT scanner, etc. Today, it is estimated to be a $6 billion market in India. India has about 15% of global population, while the share of medical devices is only 2%. Even if you double it’s nowhere, it’s a long journey. Annual growth rate is 12-15%, and we feel it is going to witness much more.

Where do you stand in the medical devices market today?

Last year, we sold products worth Rs 110 crore on a standalone basis and this year, we are aiming at Rs 150-160 crore. Next year, it will grow much bigger.

We are adding a lot of new products. We hope to make Rs 250 crore next year. We want to bring more products from the portfolio of Penlon to the Indian market. This year, we plan to achieve a consolidated revenue of Rs 425 crore, which includes revenues from our Penlon subsidiary. We are going to introduce new products for infant care, baby warmers, incubators, photo-therapy machines and ultrasound scanners, among many others.