Healthcare Global Enterprises Q1 FY27 earnings call

Healthcare Global Enterprises Limited commenced FY27 on a strong note, reporting a revenue of ₹695.1 crores, an increase of 13% year-on-year. Adjusted EBITDA grew by 20% year-on-year to ₹133.9 crores, with EBITDA margins expanding to 19.4% from 18.2% in Q1 FY26. This performance was broad-based, with 16 out of 25 centers achieving their highest-ever quarterly revenues, reflecting robust patient demand and improved operational execution.

The company completed the divestment of its Fertility business at the end of June '26, sharpening its strategic focus on oncology. Other foundational initiatives include strengthening the balance sheet through a successful rights issue, expanding the leadership team, and commissioning the North Bangalore hospital. HCG's priorities for FY27 include delivering sustainable, profitable growth, driving operational excellence, improving asset utilization, and enhancing patient experience.

The South cluster delivered a strong 16% year-on-year revenue growth, supported by healthy patient volumes and realizations, with the newly commissioned North Bangalore hospital contributing ₹6.7 crores. The West cluster grew by 9%, led by a 14% increase in Maharashtra, though Gujarat's growth was moderate due to a deliberate reduction in low-margin scheme business. The East cluster showed robust performance with 22% revenue growth, driven by strong volume growth across the region.

The newly operational North Bangalore hospital, commissioned in May '26, contributed ₹6.7 crores in its first quarter. Management is encouraged by the early traction, with over 550 new patient registrations and more than 300 admissions. The hospital is expected to achieve monthly breakeven this year and optimal utilization of 60-65% within its third to fourth year of operation, with losses projected to come down reasonably in the next few quarters^⏳.

HCG continues its capacity expansion, adding 121 operational beds across its network in Q1 FY27. Future plans include adding 65 beds in FY27, 520 beds in FY28, 230 beds in FY29, and 230 beds in FY30. Approximately 60% of this planned capacity expansion will come from brownfield projects, with 3 greenfield projects in the pipeline, including one in Whitefield (South cluster) and another in Maharashtra (West cluster).

The company is strengthening its clinical capabilities by investing in advanced technologies, including commissioning a new LINAC in Rajkot and enhancing robotic surgery with two new systems. HCG's multidisciplinary expertise is reinforced by successfully managing complex oncology cases, including advanced CAR-T therapies and minimally invasive procedures. Efforts are also underway to improve operational efficiency through cost optimization, productivity enhancements, and an improved patient experience.

In Q1 FY27, HCG incurred approximately ₹75 crores in capex, split between ₹35 crores for growth and ₹40 crores for maintenance. The full-year maintenance capex is projected to be around ₹100 crores. Proceeds from the rights issue were utilized for debt repayment of ₹170 crores, increasing shareholding in the Vizag hospital from 51% to 85% (₹150 crores), and general corporate purposes. The company expects interest costs to moderate compared to the previous year.

HCG's long-term aspiration is to achieve 24-25% EBITDA margins, targeting 21-22% in the next two years and 25% in the next 4-5 years. Key levers for margin expansion include continued improvement in payor mix, strategic investments in clinical and technological capabilities, and operating leverage from maturing centers. The reduction of losses from the North Bangalore hospital as it ramps up will also contribute significantly to margin improvement.