Prabhudas Lilladher's research report on HealthCare Global Enterprises
We broadly maintain our FY24/FY25E EBIDTA estimates. HealthCare Global Enterprises (HCG) Q3 consolidated EBIDTA was in-line with our estimates at Rs 755mn (22% YoY growth, flat QoQ). The company’s asset light approach with focus on partnering has made its business model more capital efficient and scalable, in our view. Furthermore, most of the Comprehensive Cancer Centers (CCC) operate on lease/rental basis with investment only in equipments, wherein only 4 out of 25 CCC are owned lands.
Given HCG’s current consolidation mode along with reducing capex intensity, we expect 17% EBIDTA CAGR over FY23-25E after adjusting for IND AS. At CMP, the stock trades at 13.9x FY24E EV/EBITDA adjusted for rentals. Maintain ‘Buy’ rating with TP of Rs375 valuing at 15x FY25E EV/EBIDTA.
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