HealthCare Global Enterprises Ltd (NSE:HCG) (Q1 2027) Earnings Call Highlights: Strong Revenue
GuruFocus News
Mon, 10 August 2026 at 6:31 am GMT+5:30
6 min read
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This article first appeared on GuruFocus
For the complete transcript of the earnings call, please refer to the full earnings call transcript
Positive Points
HealthCare Global Enterprises Ltd (NSE:HCG) delivered strong Q1 FY27 results with revenue of INR 6,951 million, a 13% year-on-year increase, driven by an 11% rise in patient volumes
Adjusted EBITDA (excluding North Bangalore losses and one-off costs) grew 20% year-on-year to INR 1,339 million, with margins improving to 19.4% from 18.2% in Q1 FY26
The company’s strategic focus on improving payer mix is yielding results, with non-institutional revenue growing 17% year-on-year and its contribution rising from 67% to 69%
The newly commissioned North Bangalore hospital showed a promising start, generating INR 67 million in its first quarter with over 550 new patient registrations and 300 admissions
Management expressed confidence in achieving long-term EBITDA margins of 24-25% within the next 4-5 years, supported by improving payer mix, operational leverage, and clinical differentiation
Negative Points
Revenue growth was impacted by the discontinuation of certain high-value, low-margin chemotherapy drugs, which reduced top-line growth by approximately 1.5% in Q1
ARPP (Average Revenue Per Patient) growth was modest at only 2%, as benefits from price hikes and payer mix were largely offset by an unfavorable case mix, including a higher share of lower-revenue medical oncology cases
The West cluster’s growth was muted at 9%, partly due to a deliberate reduction in low-margin institutional <a href="https://todaytrendnews7.com/houston-restaurant-claims-doordash-scammer-hurt-business/” title=”Houston restaurant claims DoorDash scammer hurt business”>business, which declined by more than 16% year-on-year
The North Bangalore hospital is still in its ramp-up phase and is expected to incur losses, with management noting that peak EBITDA losses were reached in Q1 and will take several quarters to reduce
The company faces headwinds from price capping on certain government schemes (e.g., CGHS), which negatively impacted revenue, and the full-year impact of these price revisions remains a concern
Q & A Highlights
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Q: What is the company’s long-term EBITDA margin guidance, and what are the key levers to achieve it?A: Dr. Manish Mattu, Executive Director and CEO, stated that the company aims to reach 21-22% EBITDA margins in the next two years and is confident of achieving 24-25% margins in the next four to five years. The primary levers include improving the payer mix (which improved by 200 basis points this quarter), investing in advanced clinical technology (such as tomotherapy, MR-Linac, and surgical robots) to handle more complex cases, onboarding specialized oncologists (20 added in the last 4-5 months), and benefiting from operating leverage as existing centers mature. Additionally, the reduction of losses at the North Bangalore hospital will contribute to margin expansion.
