1
Please refer to important disclosures at the end of this report
1
1
HealthCare Global Enterprises Limited(HCG) is engaged in managing cancer
hospitals, cancer centers and medical diagnostic services, including scientific
testing and consultancy services in the pharmaceutical and medical sector .In
FY17, existing centers’ revenue grew by 11% and EBITDA growth was at 24%,
aided by scale-up in its flagship center at Bengaluru and healthy growth at
Ahmedabad, Cuttack & Vijaywada centers. HCG continues to see strong
momentum in FY18, led by improving payee mix, reduction in average length of
stay (ALOS) and adoption of new technologies. Further HCG has completed its
expansion at its Ahmedabad and Cuttack centers, which should further boost
growth. Existing centers reported EBITDA of Rs 30.9cr (up 17% YoY). EBITDA
breakeven for newer hospitals is now happening at relatively faster pace (<12
months) and losses from new centers continued to decline to Rs 0.9cr versus Rs
1.4cr in Q3FY17. Capex doubled sequentially to Rs 80.9cr (Rs46.6cr in Q3FY17)
and net debt now stands at Rs 307cr. HCG business model focuses on specialty
healthcare, with emphasis on cancer and infertility. We see this model scalable
and quicker EBITDA break-even, given it offers one-stop solution, partnering with
eminent oncologists and follows asset-light model. Further, experienced
management and pan-India focus lends comfort to its long-term business
outlook. The company has a RoCE 5.62% and is trading at a valuation
EV/EBITDA of 20.88x of FY17 TTM earnings. Hence BUY.
BUY
CMP `269
0.3
Reuters Code
HEAC.NS
HCG:IN
10
BSE Sensex
31,759
Nifty
9,979
Face Value (`)
Healthcare Facilities
Market Cap (` cr)
2,313
52 Week High / Low
289/181.5
Avg. Daily Volume
2,071
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
HealthCare Global Enterprises Ltd
Others | Healthcare Facilities
August 09, 2017
2
HealthCare Global Enterprise Ltd | Healthcare Facilities
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Healthcare Global
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)