HealthCare Global Enterprises (HCG) reported a 13.4% year‑over‑year increase in revenue for the first quarter of FY27, matching the analysts' expectations. The growth reflects steady demand across its hospital network. This performance confirms the company's solid market position.
However, the company incurred a cost of INR 70 million due to the new North Bangalore facility, which houses 56 beds. This expense has slightly dented profitability for the quarter. The facility is expected to contribute to future earnings.
Strong performance was seen in the South and East regions, with revenue rises of 16% and 21.8% respectively. These gains offset a 1.5% dip caused by the discontinuation of several high‑value chemotherapy drugs. The regional growth highlights HCG's expanding footprint.
Out of 25 hospitals, 16 recorded their highest-ever quarterly revenue. This milestone underlines the network’s increasing efficiency. It also boosts investor confidence.
During Q1FY27, HCG added 121 beds, 65 of which were brownfield expansions. The company plans to increase total bed capacity to about 3,670 by FY30, up from 2,734 in FY26. This expansion aims to capture more patients and revenue.
The divestiture of Milann centres may reduce revenue growth by 2‑3%, but it is expected to lift margins. By shedding less profitable assets, HCG can focus on higher‑margin services. This strategy aligns with long‑term profitability goals.
Management forecasts an expansion of EBITDA margins by 300 to 400 basis points over the next two years. This improvement will come from cost controls and revenue growth. Investors view this as a positive sign for future returns.
ICICI Securities maintains a BUY rating for HCG and raises the target price to INR 800. The new valuation is based on a 17‑times FY28E EV/EBITDA multiple. The recommendation reflects confidence in the company's growth trajectory.