Global brokerage house Goldman Sachs has upgraded Healthcare Global Enterprises to buy from hold and raised its target price to Rs 355 from Rs 270 per share, citing solid growth story. The stock rallied 6 percent intraday Thursday.
The cancer care provider has been delivering consistently in an underserved cancer market.
"We gain more confidence that HCG will maintain EBITDA (earnings before interest, tax, depreciation and amortisation) growth pace based on upcoming capacity and pricing power," the research house said.
It expects EBITDA to grow at a CAGR of 26 percent over FY17E-20.
The research house said positives are pricing power and good management track record.
Healthcare Global Enterprises has been able to expand capacity with little dilution to margins.
For the quarter ended September 2017, the company's profit more than doubled to Rs 9.82 crore compared with Rs 4.9 crore in year-ago. Revenue during the quarter increased 21.3 percent to Rs 211.07 crore year-on-year.
Meanwhile, last week, the board has approved the proposal for issuance of 11,66,667 shares at a price of Rs 300 per share on preferential allotment basis, to Indgrowth Capital Fund 1.
At 10:33 hours IST, the stock price was quoting at Rs 292.90, up Rs 10.85, or 3.85 percent on the BSE.
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