Hospitals, defence stocks set for multi-year growth as capex and orders rise: Mayuresh Joshi

India's economic landscape is currently witnessing a transformative phase, with specific sectors poised for multi-year growth. Among these, the hospital and defence sectors stand out, driven by a confluence of strategic government policies, increasing domestic demand, and a global push towards self-reliance. This projected growth, as highlighted by experts like Mayuresh Joshi, is not merely speculative but rooted in significant structural shifts and capital allocation.

Historically, India's defence sector has been heavily reliant on imports, making it one of the world's largest arms importers. This dependence created vulnerabilities in national security and drained significant foreign exchange reserves. Similarly, the healthcare sector, while robust in private offerings for a segment of the population, has grappled with issues of accessibility, affordability, and quality, particularly in rural areas. Public health expenditure has historically remained low, often below 2% of GDP, far short of global averages and the recommended 5% by the World Health Organization. The COVID-19 pandemic starkly exposed the existing gaps in India's healthcare infrastructure, prompting a renewed focus on capacity building and public health investment.

What we are witnessing now is a concerted effort by the Indian government to address these historical shortcomings. In the defence sector, the 'Make in India' initiative, launched in 2014, coupled with the 'Aatmanirbhar Bharat Abhiyan' (Self-Reliant India Campaign) since 2020, has provided a strong impetus for indigenous manufacturing. The Ministry of Defence has released several 'Positive Indigenisation Lists' (or Negative Import Lists), restricting the import of various defence items and mandating their procurement from domestic sources. The Defence Acquisition Procedure (DAP) 2020 further prioritizes Indian-designed, developed, and manufactured defence equipment. This policy push has led to robust order books for domestic defence companies, both public sector undertakings (like Hindustan Aeronautics Limited, Bharat Electronics Limited) and an increasing number of private players (such as Tata Advanced Systems, Larsen & Toubro, Adani Defence & Aerospace). The focus is not just on assembly but on design, development, and manufacturing of complex systems, from fighter jets and submarines to missiles and artillery.

Simultaneously, the healthcare sector is experiencing a significant uplift. The National Health Policy 2017 aimed to increase public health spending to 2.5% of GDP by 2025. Flagship schemes like the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY), launched in 2018, provide health insurance coverage to over 50 crore beneficiaries, creating massive demand for healthcare services and infrastructure. This has spurred capacity expansion by organized healthcare players, including private hospital chains, diagnostics centers, and pharmaceutical companies. India's burgeoning medical tourism sector, driven by high-quality treatment at competitive costs, further contributes to the growth of hospitals, attracting patients from across the globe. The National Digital Health Mission (now Ayushman Bharat Digital Mission) is also transforming healthcare delivery, making it more efficient and accessible.

Key stakeholders in the defence sector include the Ministry of Defence, the Defence Research and Development Organisation (DRDO), various Defence Public Sector Undertakings (DPSUs), and a growing number of private Indian defence manufacturers. Foreign Original Equipment Manufacturers (OEMs) are also stakeholders, as they are encouraged to partner with Indian firms for technology transfer and joint ventures. In healthcare, the Ministry of Health and Family Welfare, NITI Aayog, private hospital groups, pharmaceutical companies, medical device manufacturers, and health insurance providers are crucial players. The general public, as beneficiaries and consumers of these services, are also vital stakeholders.

This growth matters immensely for India. For defence, it signifies enhanced national security, reduced reliance on foreign powers, and the potential to become a net defence exporter, contributing to a stronger geopolitical standing. It also fosters job creation, skill development, and technological self-reliance, driving innovation in areas like aerospace, electronics, and advanced materials. Economically, it reduces the current account deficit by curbing imports and increasing exports. For healthcare, improved infrastructure and access align with the Directive Principles of State Policy, particularly Article 47, which mandates the State to improve public health. It directly impacts the quality of life, productivity, and human capital development, which are essential for long-term economic growth. The expansion of the healthcare sector creates numerous jobs, from medical professionals to support staff, and boosts ancillary industries. Medical tourism brings in foreign exchange and enhances India's global reputation as a healthcare destination.

Looking ahead, the future implications are profound. India aims to achieve 'Aatmanirbharta' in defence, becoming a major global player in defence manufacturing and exports. This will require sustained investment in R&D, greater private sector participation, and a robust defence industrial base. In healthcare, the vision is to achieve universal health coverage, leveraging digital health solutions and public-private partnerships. India could emerge as a global hub for medical innovation and affordable, quality healthcare. Both sectors will continue to attract significant domestic and foreign investment, contributing substantially to India's GDP and employment figures, solidifying its position as a major economic power on the global stage. The sustained policy support and capital allocation are critical for realizing these ambitious goals.