Buy HealthCare Global Enterprises; target of Rs 555: Prabhudas Lilladher

Prabhudas Lilladher's research report on HealthCare Global Enterprises

With 51% stake in HCG, KKR has become the largest shareholder. We believe the strategic investment by KKR will bring in more operational and financial efficiency. Currently, HCG enjoys 15% pre IND AS margin, which is lower than its peers. We expect KKR to drive growth through bed expansion, rationalization of existing assets and scale up of margins. The company’s asset-light approach with a focus on partnerships has made its business model more capital efficient and scalable, in our view. Our FY26/FY27E EBITDA stands reduced by 6%/1%. We expect 23% EBITDA CAGR over FY25-27E.

Outlook

At CMP, the stock trades at 17x FY27E EV/EBITDA adjusted for rentals and minority stake. Maintain ‘BUY’ rating with a revised TP of Rs 555/share as we roll forward, valuing at 18x on FY27E EV/EBITDA (17x earlier).