Stock to buy for short-term: Building on an over 45% upside in the last one year, shares of healthcare stock Healthcare Global Enterprises can jump another 10%, predicts Axis Securities, led by strong operational efficiency, capacity expansion and sectoral tailwinds.
The domestic brokerage has a target price of ₹600 on Healthcare Global Enterprises shares, predicting a 10% gain from the last closing price of ₹544.
Industry Tailwinds
HCG is one of India’s leading cancer care providers, operating 21 comprehensive centres dedicated to advanced treatment. HCG has outpaced the cancer industry, which is growing at a CAGR of 17%, the brokerage said.
“The company plans to add 900 incremental beds over the next 4 to 5 years to capitalise on emerging opportunities. Several margin improvement levers are in place, as most emerging centres have matured with margins exceeding 20%,” it further opined.
The recent entry of new investors such as KKR, replacing CVC, signals confidence in the company’s strategic vision and growth prospects, according to the brokerage.
Solid Financials
HCG‘s strong Q4FY25 results also reinforce Axis Securities’ positive view on the counter.
It saw a revenue growth of 18.3%, driven by a 3.5% YoY increase in average revenue per occupied bed (AROPB) and ~16.7% growth in occupied days. Occupancy improved to 67%, marking a 310 bps YoY increase.
The company reported EBITDA margins of 18.1%, down 50 bps YoY but increased by 220 bps QoQ. The company reported EBITDA of ₹106 crore, which grew by 15% and 20% YoY and QoQ, respectively. Adjusted EBITDA margins stood at 18.7%, while PAT rose to ₹7 crore.
Capacity Expansion Plans
To further strengthen its financial position, HCG recently acquired MG Hospital in Vizag, a comprehensive care provider with 196 operational beds and healthy margins of 35%.
Additionally, it is adding 125 beds in North Bangalore through a brownfield capacity expansion, after inaugurating a 200-bed comprehensive cancer care center in Ahmedabad last year.
The company’s digital initiatives have significantly boosted the patient funnel. The company plans to increase digital channel revenue YoY to 25% from 15% over the next 3-5 years.
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