Buy Healthcare Global Enterprises; target of Rs 310: Edelweiss

Edelweiss' research report on Healthcare Global Enterprises

Healthcare Global (HCG) reported in-line Q4FY17 with revenue and EBITDA growing 18% and 20% YoY, respectively. Existing oncology centers posted 17% YoY growth in revenue, while the new centres continued strong ramp up thereby reducing their EBITDA loss to INR 9mn (INR 14mn loss in Q3FY17).

Outlook

We expect debt and capex to peak at INR 2bn and INR 5.1bn, respectively, by FY18 to fund expansion plans. In our view, HCG is positioned for robust EBITDA growth owing to strong therapy tailwind and EBITDA margin levers. We maintain ’BUY’ with a target price of INR 310 (18x FY19E EV/EBITDA).