Healthcare Global Enterprises: HCG shares in focus on report buyout funds eyeing controlling stake

Healthcare Global Enterprises Ltd (HCG) shares will be in focus on Monday morning as global buyout funds KKR, EQT (formerly Baring PE Asia-EQT) and TPG Capital were evaluating the acquisition of a controlling stake held by CVC Capital in the Bengaluru-based specialty cancer hospital chain Healthcare Global Enterprises (HCG), ET reported.

HCG recently announced its December quarter results and suggested its plans to add 350 beds over three years including Ahmedabad and Whitefield project. Prabhudas Lilladher said it expects HCG's margins to improve, as benefit of ramp up in occupancy across centres should aid better operating leverage along with scale up in new centres.

"The company’s asset light approach with focus on partnering has made its business model more capital efficient and scalable, in our view. Our FY25/FY26E Ebitda stand reduced by 5 per cent/1 per cent and we expect 20 per cent Ebitda CAGR over FY24-26E. At CMP, the stock trades at 14 times FY26E EV/Ebitda adjusted for rentals. Maintain ‘Buy’ rating with a target of Rs 420  per share valuing at 16 times on FY26E EV/EBITDA as we roll forward," PL suggested in  February 12 note.

In its analyst call, HCG said it added 59 beds in the December quarter across its network hospitals. Its YoY Ebitda grew 7 per cent to Rs 82.60 crore while its contribution margin for the quarter improved, driven by a better revenue mix.

"However, due to the seasonal nature of the quarter, operating leverage did not come into full effect," HCG said.

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