Target: ₹621
CMP: ₹503.50
HealthCare Global (HCG) is positioned for growth over the next 2-3 years through a strategic mix of organic expansion, brownfield projects, and acquisitions. The company is set to increase its operational capacity from 2,154 beds in Q3FY25 to 2,800 beds by FY27 by adding approximately 900 beds.
To capitalize on its existing centers, HCG is planning to expand in high-demand markets such as Bengaluru. While the international patient segment, which currently contributes 3.5-4 per cent of total revenue, has faced challenges due to geopolitical issues in countries like Bangladesh, a recovery is expected to begin in Q4FY25.
Although there has been a temporary decline in EBITDA margins due to lower operating leverage, the recent acquisition of a 54 per cent stake by KKR is anticipated to bring operational improvements under new management. Leveraging KKR’s expertise in healthcare investments, HCG is expected to see a significant rise in EBITDA margins, from 17 per cent in FY25 to 21 per cent in FY27 as it realigns its revenue streams.
Revenue and EBITDA are projected to grow at a CAGR of 19 per cent and 28 per cent, respectively, from FY24-27. This growth will be driven by a focus on high-margin oncology treatments, operational enhancements from KKR’s stake acquisition, and the increasing significance of oncology in India’s healthcare landscape.
Published on February 28, 2025.
