Detailed Narrative
Strong FY26 Performance Driven by Strategic Focus
Health.Global delivered a robust FY26, with revenues growing 15% YoY to ₹2,545 crores. Excluding the fertility business, revenue growth remained 15%, supported by a 12% increase in patient volumes and a 3% improvement in average revenue per patient. Adjusted EBITDA for the full year grew 19% YoY to ₹471.1 crores, with margins expanding by 70 basis points to 18.5%, reflecting benefits of scale, maturing centers, and improved network productivity. The company's pre-tax ROCE improved to 14%.
Strategic Divestment of Milann Fertility Business
The company announced the strategic divestment of its fertility business, Milann, to Inviga Healthcare Fund. The transaction, valued at an enterprise valuation of ₹63 crores, includes an equity consideration of ₹37.6 crores, with 75% payable upfront and the remainder over 18 months. This decision aligns with HCG's sharpened focus on its core oncology platform, as Milann's operating footprint had declined, and it operated at a low EBITDA margin requiring significant capital and management bandwidth.
Strengthened Financial Position and Capital Allocation
HCG successfully completed a rights issue of ₹425 crores, which, combined with sustained cash generation, significantly strengthened its financial position. Net debt reduced favorably from 2.2x-2.3x to 1.4x, providing ample headroom for future investments. The company maintains an internal ceiling of 2.5x for net debt to EBITDA. The average interest cost stands at 8%, with expectations for further reduction post debt repayments.
Capacity Expansion and Network Optimization
The company commenced operations at its new North Bangalore facility, a strategically important addition featuring MR-Linac technology, adopted on a pay-per-use model for asset-light growth. HCG plans to add over 200 beds across brownfield expansions in Cuttack (75 beds), Ranchi (30 beds), Vizag (50 beds), and Bhavnagar (20+ beds) over the next 24 months, with an average cost of ₹45 lakh per bed. The long-term target is to add 1,000 beds by FY30, comprising 400 Greenfield and 600 Brownfield beds.
Focus on Profitable Growth and Margin Expansion
HCG is committed to profitable growth, aiming for a 15% revenue growth in the medium term and targeting a 20% ROCE over the next four to five years. Management is confident in achieving a 100 basis points improvement in EBITDA margin in FY27, driven by operating leverage, better utilization, throughput optimization, and disciplined cost management. Margin expansion opportunities are particularly strong in the West and East clusters, while the South cluster already boasts margins above 25%.
Clinical Differentiation and Digital Initiatives
The company continues to emphasize its clinical differentiation, managing complex and unique cases across its network, including advanced robotic procedures and personalized immuno-radiation strategies. HCG also added 23 oncologists in Q4 FY26. Concurrently, HCG is strengthening its digital layer to improve patient acquisition, conversion, and experience, aiming to reduce dependence on external channels and leverage digital platforms in urban and semi-urban catchments.