Healthcare Global Enterprises Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

HealthCare Global reported a strong Q3 FY26 with 13.4% YoY revenue growth and 20% YoY adjusted EBITDA growth, driven by robust patient volumes and margin expansion. The company's digital strategy is yielding significant results, and regional clusters are performing well despite some temporary disruptions. HCG remains focused on leveraging existing capacity, brownfield expansion, and calibrated greenfield additions to achieve its long-term growth and margin targets, supported by a planned equity infusion.

Highlights

  • Q3 FY26 Revenue of INR 633 crore, up 13.4% YoY, demonstrating resilient demand for oncology care.

  • Adjusted EBITDA margin expanded 100 bps to 17.5% in Q3 FY26, driven by operating leverage and improved utilization.

  • Digital engine showed strong performance with 26% YoY revenue growth and significant increases in outpatient (26%) and inpatient (37%) volumes.

  • West cluster delivered strong revenue growth of 17% YoY, supported by robust patient inflows and expanded capacity in Ahmedabad.

  • Company maintains a long-term revenue growth guidance of 15%+ and an EBITDA margin aspiration of 23-24%+ in 3-4 years.

Concerns

  • Q3 is typically seasonally softer for the healthcare services industry.

  • Temporary disruptions in Andhra Pradesh related to a state-sponsored scheme impacted volumes in the South cluster, though resolved within the quarter.

  • East cluster ARPP declined 3% YoY due to transition in the Odisha state government scheme and a case mix change, partially offset by strong volume growth.

Key financials

2 periods

Headline

  • Revenue
    ₹633 Cr
    YoY +13.4%
  • Revenue (ex-fertility)
    ₹618 Cr
  • Adjusted EBITDA
    ₹111 Cr
    YoY +20%
  • EBITDA Margin
    17.5%
  • ARPP
    ₹84,000
    YoY +5%

9M

  • FY26 Revenue
    ₹1,893 Cr
    YoY +16%
  • FY26 Adjusted EBITDA
    ₹346 Cr
    YoY +20%
  • FY26 EBITDA Margin
    18.3%

What they filed

Q1 FY27: revenue up 13.4%, net profit up 166.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue554 559 585 613 647 +17%633 +13%652 +11%695 +13%
EBITDA102 88 106 108 123 +21%110 +25%125 +18%122 +13%
Net profit21 8 7 6 21 +0%-8 −200%4 −43%16 +167%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenue GrowthVolume Growth
South Cluster9%—
South Cluster (ex-AP)—11%
West Cluster17%11%
East Cluster12%16%

Capital allocation

high confidence
  • Capex ₹275 Cr
    For capex this year, our expected closure is about INR 275 crore - INR 280 crore of capex and next year, probably about 10% - 12% higher than that.
  • Debt Net ₹680 Cr · 1.5× EBITDA
    And probably if the kind of growth guidance that we have, we should be landing at a pre-Ind AS EBITDA of upwards of INR 500 crore probably next year, which is, I mean, less than 1.5x of net debt to EBITDA
  • Liquidity Cash ₹200 Cr Cash available for further growth capex, ranging from INR 200 crore to INR 300 crore.
    And still leave you with at least INR 200 crore to INR 300 crore of cash available for further growth capex.

Guidance & targets

Revenue

  • Long-term Revenue Growth Revenue · long-term · High confidence 15%+
    We believe a 15%+ growth should definitely be achievable. But of course, we will gun for our ambition is or aspiration is to do more than that.

    — Manish Mattoo

EBITDA Margin

  • EBITDA Margin Aspiration EBITDA Margin · three-to-four-year period · High confidence 23-24%+
    So, our aspiration, of course, is to be 23% - 24% plus in the three-to-four-year period, and we are very confident of delivering that.

    — Manish Mattoo

ROCE

  • ROCE Target ROCE · next four to five years · High confidence 20%
    So, we feel we are confident of delivering the ROCE margins that we have committed in our Investor Day deck of about 20% in the next four to five years.

    — Manish Mattoo

Bed Capacity

  • Total Operational Bed Capacity Bed Capacity · three to four years · Medium confidence 3,500 beds

    From 2,000 beds today

    So, cumulatively, if I see the operational bed where we are probably 2,000-odd to the overall bed capacity that we will increase to probably about 3,500 that could be about close to almost over three to four years

    — Aliasgar Shakir (referencing company plan)

ARPP

  • ARPP Growth ARPP · long-term · Medium confidence 5-7%
    plus ARPP growth, as you have mentioned, about 5% - 7%.

    — Aliasgar Shakir (referencing company plan)

Sales Growth Composition

  • Volume Growth (part of 15%+ sales growth) Sales Growth Composition · long-term · High confidence 10%
    So, our the breakup for the 15%+ is about 10% will come from volume growth and about 5% will come from ARPP growth.

    — Manish Mattoo

  • ARPP Growth (part of 15%+ sales growth) Sales Growth Composition · long-term · High confidence 5%

    — Manish Mattoo

Medical Tourism

  • Medical Tourism Revenue Contribution Medical Tourism · next four years · High confidence 7%

    From 3.5% today

    Currently, it is about 3.5%, Rajat, and our endeavour is to take it to about 7% in the next four years.

    — Manish Mattoo

Capex

  • FY26 Capex Capex · FY26 · High confidence INR 275-280 crore
    For capex this year, our expected closure is about INR 275 crore - INR 280 crore of capex and next year, probably about 10% - 12% higher than that.

    — Manish Mattoo

  • FY27 Capex Capex · FY27 · High confidence 10-12% higher than FY26

    — Manish Mattoo

What to watch in Q4 FY26

North Bangalore Facility Operations Commencement

end of Q4 FY26
Current Progressing well, clinician hiring largely completed
Target Commencement of operations

Why it matters

This new 120-bed facility with MR-LINAC technology is a key greenfield expansion expected to drive future growth and clinical differentiation.

On the growth front, preparations for launch of our North Bangalore and Whitefield Green projects are progressing well. The North Bangalore facility with a planned capacity of over 120 beds is expected to commence operations by the end of Q4 FY '26, with clinician hiring largely completed.

Risks & concerns

  • Temporary disruptions from state-sponsored schemes

    medium

    Temporary disruptions in Andhra Pradesh related to a state-sponsored scheme impacted volumes for about 20-25 days in Q3 FY26, though resolved.

    Management acknowledged

  • ARPP decline in East cluster

    medium

    ARPP in the East cluster declined 3% YoY due to transition in the Odisha state government scheme and a case mix change, though offset by strong volume growth.

    Management acknowledged

  • Seasonally softer quarter for healthcare services

    low

    Q3 is typically seasonally softer for the health care services industry, impacting overall performance.

    Management acknowledged

  • Impact of CGHS norms and GST changes

    low

    Marginal impact on top line and margin from GST and some immediate impact from CGHS norms, but largely offset by internal initiatives and consumption pattern changes.

    Management downplayed

Q&A highlights

7 direct
Conservatism of Growth Guidance (15%+ vs. 22-25% potential) Direct
I think our, of course, ambition is obviously to grow higher than what we have committed. But looking at historical trajectory, looking at the competitive intensity, the expansion will not happen at once. I mean, it will be in a phased manner. Looking at the pricing sensitivity around cancer care, we believe a 15%+ growth should definitely be achievable. But of course, we will gun for our ambition is or aspiration is to do more than that.

Analyst questioned if the 15%+ growth guidance was conservative given the 60% utilization of existing facilities and planned 1,000 bed additions, suggesting a potential for 22-25% annual growth. Management reiterated 15%+ as achievable but acknowledged higher aspirations.

Asked by Aliasgar Shakir

Potential for EBITDA Margin Improvement (to 25%+) Direct
So, Ali, as I said earlier also, if you see the trajectory this year, the fact is that we started at 17.5%, are trending at 18.5% for the year so far. And the trajectory will continue to be upwards. So, our aspiration, of course, is to be 23% - 24% plus in the three-to-four-year period, and we are very confident of delivering that.

Analyst inquired about the potential for margins to reach 25%+ like competitors. Management confirmed an aspiration of 23-24%+ within 3-4 years, noting current trajectory and mature centers already achieving 26-27%.

Asked by Aliasgar Shakir

Rationale for Rights Issue despite Comfortable Leverage Partial
So, Ali, we believe that an equity infusion at this stage will strengthen the company's balance sheet and the capital structure. And that is directionally why the rights issue is there. But at this point in time, that is all I can divulge. But very shortly, we will share the specifics after our Board meets.

Analyst questioned the need for a rights issue given the company's comfortable net debt of ~INR 680 crore and net debt to EBITDA below 1.5x. Management stated it would strengthen the balance sheet but deferred specific details until after the Board meeting.

Asked by Aliasgar Shakir

Slower Growth in Southern Cluster in Q3 FY26 Direct
As I mentioned, our growth, excluding the normalizing for the AP effect, was 11% year-on-year. Bangalore cluster did really well. The strike did impact our volumes because the Vizag market is a big market for us where we are the dominant players. The strike continued for twenty- twenty-five days, and it did impact the subsequent month volumes as well because for cancer, that is the kind of nuance we have.

Analyst sought clarification on the reasons for slower growth in the Southern cluster compared to H1. Management attributed it to a 20-25 day strike in Andhra Pradesh impacting November volumes, noting that growth is now returning.

Asked by Devang Patel

Decline in Gross Profit Margin from 75% to 72% Direct
So, Devang, it is largely driven by our case mix change, which is favouring medical oncology. The ramp-up in medical oncology and pharmacy costs has been slightly margin dilutive, but we are working towards increasing our case mix and improving our payor mix, which should offset that in the ensuing quarters.

Analyst asked about the reason for the gross profit margin trending down. Management explained it was due to a case mix shift favoring medical oncology, which has higher pharmacy costs, but expects operating leverage to offset this.

Asked by Devang Patel

Impact of CGHS Norms and GST on Q3 FY26 Direct
So, I would say as far as GST is concerned, there was a marginal impact on the top line as well as margin and we were able to offset that by some initiatives that we took within the organization around pricing and consumption. So that's been offset because of that. As far as CGHS is concerned, yes, there was some immediate impact, but we have been able to offset that too by changing consumption patterns in our hospitals.

Analyst inquired about the impact of new CGHS norms and GST cuts on Q3 financials. Management stated both had a marginal impact on top line and margin but were largely offset by internal initiatives and consumption pattern changes, resulting in a neutral impact at the company level.

Asked by Gaurav Tinani

ROCE Improvement and Maturity Threshold Direct
So, we have seen that when a centre crosses INR 10 crore per month revenue, the ROCE impact improves significantly. And we have seen that trend in the last year as well. So, going forward, as more and more centres mature, I feel from a current 13.5%, we should be progressively moving towards 20% margin at a company level. By maturity, I mean the revenue threshold, not the age of the hospital.

Analyst questioned the historically lower ROCE compared to multi-specialty hospitals. Management clarified that mature centers achieve 28-29% ROCE and that ROCE improves significantly once a center crosses INR 10 crore/month revenue, targeting 20% company-level ROCE in 4-5 years.

Asked by Sumukh

Low Contribution of Medical Tourism (3.5%) and Future Plans Direct
Currently, it is about 3.5%, Rajat, and our endeavour is to take it to about 7% in the next four years. The way that we are thinking about is that there are some traditional markets which have channelled into HCG hospitals. And today, oncology comprises about 25% - 30% of our overall - of the overall medical value travel in the country.

Analyst pointed out the relatively low medical tourism contribution (3.5%) compared to other hospitals. Management acknowledged this, stating a target to reach 7% in the next four years by leveraging oncology's share in medical value travel and expanding presence in metros like Bombay and Kolkata.

Asked by Rajat Srivastava

3 min read 6 chapters

Detailed narrative

Robust Q3 FY26 Financial Performance

HealthCare Global reported a strong Q3 FY26 with revenues of INR 633 crore, marking a 13.4% year-on-year growth. Excluding the fertility business, revenues stood at INR 618 crore, supported by an 8% YoY patient volume growth. Adjusted EBITDA for the quarter was INR 111 crore, reflecting a 20% YoY growth, with EBITDA margins expanding 100 basis points to 17.5% from 16.5% in Q3 FY25. Average revenue per patient (ARPP), including the fertility business, was approximately INR 84,000, a 5% YoY increase.

Strong 9M FY26 Performance and Margin Trajectory

For the nine months ended December 31, 2025, HCG achieved a revenue of INR 1,893 crore, representing a 16% YoY growth, and an adjusted EBITDA of INR 346 crore, a 20% YoY growth. The EBITDA margin for the 9M period improved by 60 basis points to 18.3%. Management expressed confidence in continued operating momentum into the March quarter, expecting it to be the best quarter of the financial year, and reiterated an aspiration to achieve 23-24%+ EBITDA margins within the next three to four years.

Clinical Excellence and Digital Engine Driving Growth

HCG highlighted its advanced clinical capabilities, including complex radiation oncology cases using Cyberknife, personalized medical oncology treatments, and robotic surgeries for complex conditions. The company's digital engine significantly contributed to growth, with digital revenue increasing 26% YoY. The website accounted for 67% of digital contribution, while the mobile app scaled 4.5x to contribute 13%. Outpatient volumes grew 26% and inpatient volumes 37%, demonstrating effective patient engagement and referral strategies, alongside a reduction in aggregator dependence from 12% to 9%.

Regional Cluster Performance and Expansion

The South cluster delivered 9% YoY revenue growth, with volumes (excluding Andhra Pradesh) growing 11% YoY, despite temporary disruptions from a state-sponsored scheme. The West cluster showed strong performance with 17% YoY revenue growth and 11% YoY volume growth, driven by patient inflows in Gujarat and Maharashtra. The East cluster reported 12% YoY revenue growth and 16% YoY volume growth, though ARPP declined 3% YoY due to scheme transitions. Strategic expansions include the North Bangalore facility (120 beds) commencing operations by Q4 FY26, 20 additional beds at the existing Bangalore COE, and 60 beds at Cuttack Hospital by end of FY27.

Capital Allocation and Rights Issue

The company's pre-tax ROCE stood at 13.3% for 9M FY26, with a target to reach 20% in the next four to five years as centers mature and achieve a revenue threshold of INR 10 crore per month. Planned capex for FY26 is INR 275-280 crore, with a 10-12% increase projected for FY27. Management announced a Board meeting for a Rights Issue, stating that an equity infusion would strengthen the balance sheet and capital structure, with specifics to be shared shortly. The company currently holds INR 200-300 crore in cash available for further growth capex, with net debt around INR 680 crore and a net debt to EBITDA ratio below 1.5x.

Focus on Medical Tourism and Patient Mix

HCG currently derives about 3.5% of its revenue from medical tourism, with an endeavor to increase this to 7% in the next four years. Oncology constitutes 25-30% of the overall medical value travel in India, presenting a significant growth opportunity. Historically, the company focused on domestic patients, but post-COVID, it aims to leverage this channel, supported by expansions in metros like Bombay and Kolkata. Approximately 45% of HCG's patients come after seeking initial opinions at multi-specialty hospitals, highlighting its position as a trusted referral center.

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