Buy Healthcare Global Enterprises, target price Rs 575 : Axis Securities

Axis Securities has a buy call on Healthcare Global Enterprises with a target price of Rs 575. The current market price of Healthcare Global Enterprises is Rs 502 . Healthcare Global Enterprises, incorporated in 1998, is a Small Cap company with a market cap of Rs 6921.25 crore, operating in Hospitals & Allied Services sector.

Healthcare Global Enterprises' key products/revenue segments include Income from Medical and Healthcare Services, Pharmaceuticals, Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 564.67 Crore, up 5.67 % from last quarter Total Income of Rs 534.39 Crore and up 15.16 % from last year same quarter Total Income of Rs 490.34 crore. The company has reported net profit after tax of Rs 20.71 Crore in latest quarter.

The company's top management includes Dr.B S Ajai Kumar, Ms.Geeta Mathur, Mr.Pradip Kanakia, Mr.Jeyandran Venugopal, Mr.Rajiv Maliwal, Mr.Amit Soni, Mr.Siddharth Patel, Ms.Anjali Ajaikumar Rossi, Mr.Raj Gore, Mr.Rajagopalan Raghavan. Company has B S R & Co. LLP as its auditors. As on 30-09-2024, the company has a total of 14 crore shares outstanding.

Investment Rationale
The cancer industry is growing at a CAGR of 17% and HCG is outpacing the industry growth. The company plans to add 900 incremental beds over the next 4-5 years to capture upcoming opportunities. Axis Securities anticipates a 1,000bps improvement in RoIC for HCG over the next three years, driven by increased operating profitability. Currently, the stock trades at 13x and 11x EV/EBITDA for FY26E and FY27E, respectively. The brokerage recommends a BUY with a target price of Rs 575/share, implying an upside potential of 14% from CMP.

Promoter/FII Holdings
Promoters held 71.23 per cent stake in the company as of 30-Sep-2024, while FIIs owned 4.3 per cent, DIIs 11.63 per cent.