Case Challenge for Deloitte

1. Deloitte Maverick @ Campus
Team Déjà vu
» Puneet Rastogi
» Vikram Tuli
» Rishi Choubey

2. Investment objectives:
• Invest in various healthcare sectors that are outside of
the core business of drugs and vaccine.
• High growth rate for the portfolio of the companies.
• Invest in portfolio of 2/3 companies over next one year
which is also the investment horizon.
 Investment target should meet the funds guideline.
 Have an innovative technology/ business model.

3. 1. Identifying investment segment
• Layout a framework to identify segments for investment.
• Prioritize the segments on basis of data & research.
• In the healthcare domain there are 7 major sectors, in
consideration, which are listed below :
– Healthcare IT software.
– Tele Health Devices.
– Wellness Clinics.
– Point of Care Diagnostic.
– Clinical Research Organization.
– Healthcare training.
– Accountable Care Organization Solutions.

4. The framework mode used by
pharmaceuticals companies to identify key
dimensions
Fav. Industry
Trend
Quality of
Offering
Product
Potential/Mkt Potential
Share Revenue
Mktg Strategy
of Offering
Progress of Technology
Big players Potential
Potential
Innovation in Industry Market Size
Industry Maturity

5. Key Dimensions
From previous framework, we have identified
future growth rate, diversification & segment size
as key decision dimensions.
Future
growth
Diversification rate
Segment
Size
Key dimensions to identify
segments for Investment

6. Framework to assess to key dimension
Sector
Sector Score
Healthcare IT software 0.43
Tele Health Devices 0.16
Wellness Clinics 0.11
Point of Care Diagnostic 0.40
Clinical Research Organization 1.12
Sector Score Healthcare training 0.10
Accountable Care Organization
Solutions 0.13

7. Mean sector scores and
• Clinical Research
prioritized sectors
Mean
Organization
Sector Priorit
Sector Score y
• Healthcare
Healthcare IT
IT software
software 0.30 2
• Point of Care Tele Health Devices 0.12 5
Diagnostic Wellness Clinics 0.06 6
Point of Care
• Accountable Care Diagnostic 0.21 3
Organization Clinical Research
Solutions Organization 0.56 1
Healthcare training 0.06 6
Accountable Care
Organization
Solutions 0.20 4

8. 2. Screen the Investment segments
Experience of
Book Value per the
Share (BVPS )
Management
Innovative
Return on Product and Huge market
Net Sales Invested Capital
(ROIC)
Business Potential
Model
Expected Rate of
Earnings per Current Debt-to-Net Profit Appeal to
share (EPS) Ratio Mass Market future growth of
Performance company
performance
Metrics to assess company’s Metrics to assess company’s
current performance expected future performance.

9. 3. Target screening - Framework
Innovative Experience of
Product the
Management
Rate of
Experience of Innovati growth
the ve Busines of Financ
Expected Management. Product s Model company ials
future Alpha High High High High High
performance Beta Medium High Medium High Low
Gamma Medium High High Medium High
Mediu
Business Growth rate of Sigma Low Low Medium Low m
Model company
Delta Medium High Low High Low
Financials

10. Conclusion
Various healthcare sectors which are outside core
business and suitable for Investment are (in priority order):
• Clinical Research Organization
• Healthcare IT software
• Point of Care Diagnostic
• Accountable Care Organization Solutions
Portfolio of companies (in which the client was interested
in) having innovative technology/business model and high
growth rate along with financial alignment should
comprises of Alpha, Beta & Gamma.

11. Appendix