HCG - Health.Global

📊 NSE: HCG 🏢 Healthcare 📅 Last Updated: 12/13/2025 22:51

💰 Financial Performance

Revenue Growth by Segment

Consolidated operating income grew 12.8% YoY to INR 1,912.1 Cr in FY2024 from INR 1,694.4 Cr in FY2023. The Milann (fertility) segment saw a significant revenue increase from INR 9.1 Cr in FY2023 to INR 43.3 Cr in FY2025, representing a 119% CAGR. International operations (Kenya) contributed INR 57.8 Cr in FY2025, though this declined at a -4% CAGR from FY2020 levels of INR 70.1 Cr.

Geographic Revenue Split

Based on FY2025 revenue potential, the West region is the largest contributor at INR 989.9 Cr (44.5%), followed by the South region at INR 874.6 Cr (39.3%), and the East region at INR 254.8 Cr (11.5%). The company operates in 19 markets and holds a leading position in 16 cities.

Profitability Margins

Profit After Tax (PAT) margin improved from 1.0% (INR 17.6 Cr) in FY2023 to 2.1% (INR 40.9 Cr) in FY2024, and further to 2.5% (INR 41.2 Cr) in 9M FY2025. Operating margins (OPBDIT/OI) remained stable at 17.2% in 9M FY2025 compared to 17.3% in FY2024.

EBITDA Margin

Consolidated EBITDA margin stood at 17.2% for 9M FY2025, with H1 FY2025 margins specifically improving to ~19%. Mature centers generating >INR 100 Mn monthly revenue demonstrate a strong EBITDA margin profile of 25%+, while mid-tier centers (INR 50-100 Mn) operate at 20% margins.

Capital Expenditure

Total capital expenditure over the last five years reached INR 659.4 Cr, comprising INR 353.3 Cr for maintenance, INR 186.1 Cr for bed and equipment expansion, and INR 120 Cr for shifting the Ahmedabad Center of Excellence (COE).

Credit Rating & Borrowing

The company maintains an [ICRA]A+ (Stable) rating for long-term fund-based facilities (INR 655.09 Cr) and [ICRA]A1 for short-term non-fund based limits (INR 43.52 Cr). Interest coverage ratio was 3.0x in FY2024.

⚙️ Operational Drivers

Raw Materials

Medical consumables, pharmaceutical drugs (chemotherapy agents), and surgical implants represent the primary operational costs, though specific percentage breakdowns are not disclosed.

Capacity Expansion

Current capacity includes 2,500 beds and the largest LINAC installation base in India with 38 units. Planned expansion includes the shifting and upgrading of the Ahmedabad COE (INR 120 Cr) and the integration of the Vizag acquisition (INR 206 Cr first tranche).

Raw Material Costs

Procurement is identified as a key lever for margin improvement over a 4-5 year journey, aiming to bring all centers to mature-level margins.

Manufacturing Efficiency

Average Occupancy Rate (AOR) was 65.6% in H1 FY2025. Average Revenue Per Occupied Bed (ARPOB) increased to INR 45,188 in H1 FY2025, a significant rise from the FY2020 level of INR 19,901 (15% CAGR).

📈 Strategic Growth

Expected Growth Rate

18%

Growth Strategy

The strategy focuses on migrating 11 centers currently in the INR 50-100 Mn monthly revenue bucket (20% margin) into the >INR 100 Mn bucket (25%+ margin) through volume growth in the high teens. This is supported by KKR's acquisition of a 54-77% stake, providing access to global expertise and long-term capital for accretive acquisitions like Vizag (INR 206 Cr) and Indore (INR 45 Cr).

Products & Services

Radiation oncology, surgical oncology, medical oncology, PET-CT diagnostics, and IVF/fertility treatments (Milann).

Brand Portfolio

HCG (Healthcare Global), Milann.

New Products/Services

Expansion of sub-specialization in oncology and adoption of advanced treatment techniques; Milann fertility centers are expected to contribute more significantly following a 119% revenue CAGR.

Market Expansion

Recent acquisitions in Vizag (INR 206 Cr) and Indore (INR 45 Cr) to consolidate leadership in Tier 1 and Tier 2 cities.

Market Share & Ranking

Market leader in 16 out of 19 cities of operation; possesses 3x the LINAC base of its closest competitor.

Strategic Alliances

Definitive agreement signed with KKR Group to become the largest shareholder (54-77% stake), replacing CVC Group (Aceso Company Pte Ltd).

🌍 External Factors

Industry Trends

The industry is shifting toward comprehensive, specialized cancer centers. HCG is positioned as a leader with 38 LINACs and 400+ oncologists, benefiting from an 18% CAGR in mid-tier center revenue as they mature.

Competitive Landscape

Faces competition from multi-specialty hospital chains, though HCG's specialized focus provides a 'right to win' in oncology.

Competitive Moat

Durable moat built on 'clinical density' (2x oncologists vs competitors) and 'technology leadership' (3x LINAC base). This scale creates a high barrier to entry and attracts top oncology talent.

Macro Economic Sensitivity

High sensitivity to cancer incidence rates in India and the demand-supply gap for high-quality oncology care.

Consumer Behavior

Increasing preference for specialized oncology platforms over general hospitals for complex cancer treatments.

Geopolitical Risks

Operations in Kenya (HCG CCK Cancer Centre) expose the company to regional political and economic stability risks.

⚖️ Regulatory & Governance

Industry Regulations

Subject to restrictive pricing regulations by central and state governments (e.g., NPPA drug price caps) and clinical establishment standards.

Legal Contingencies

The transfer of the oncology business of HCG NCHRI Oncology LLP to the company was carried out at other than fair value to comply with specific laws; no other major pending court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Regulatory intervention in healthcare pricing (high impact), integration risks of new acquisitions in Vizag and Indore, and the transition of control to KKR.