HealthCare Global Enterprises (HCG IN) – Q2FY27 Result Update – Growth to sustain despite trade margin cap – BUY
Published on 09 Nov 2026
HealthCare Global Enterprises’ (HCG) Q2 consolidated EBITDA adjusted for new unit losses grew by 17% YoY to INR 1.42bn; in line with our estimates. Mgmt reiterated higher EBITDA growth than historical growth in coming years. HCG’s asset-light approach with a focus on partnerships has made its business model more capital efficient and scalable, in our view. We believe the recent strategic investment by KKR and exit from low margin fertility business will bring in more operational and financial efficiency. Currently, HCG enjoys ~14% PRE IND-AS margin, which is lower than its peers. We expect KKR to drive growth through bed expansion largely brownfield, better payor mix, focused marketing initiatives and scale up of margins. Our FY28 and FY29E EBIDTA stands reduced by 2-4%. We expect ~22% EBITDA CAGR over FY26-29E. At CMP, the stock trades at attractive valuations of 15x EV/EBITDA adjusted for rentals and minority based on Sept 2028. Recommend ‘BUY’ rating with a TP of Rs800/share valuing at 20x on Sept 2028E EV/EBITDA.
