HealthCare Global Enterprises (HCG) Q4 15/16 earnings summary

Executive summary

• FY16 consolidated revenue from operations rose 12% YoY to Rs. 5,819.77 million; EBITDA increased 17.6% to Rs. 896.48 million, while PAT was Rs. 12.21 million.

• Listed on BSE and NSE on March 30, 2016; the IPO comprised 11.6 million fresh shares and 18.2 million offer-for-sale shares, for a total issue size of Rs. 6,496.4 million.

• Operated 17 cancer centres, three diagnostic centres, one day-care chemotherapy centre and two multispecialty hospitals; treated 37,315 new cancer patients in FY16.

Financial highlights

• Total revenue was Rs. 5,854.28 million, up 11.68% YoY; revenue from operations grew 12.05% to Rs. 5,819.77 million.

• EBITDA was Rs. 896.48 million versus Rs. 762.40 million; EBITDA margin expanded 70 bps to 15.4% from 14.7%.

• PBT before exceptional items rose to Rs. 110.71 million from Rs. 75.76 million; reported PAT increased to Rs. 12.21 million from Rs. 8.34 million.

• Exceptional items were Rs. 60.69 million, including Rs. 44.28 million from the BNH closure and Rs. 16.41 million loss on disposal of HCG TVH investments.

• Standalone operations revenue increased 12% to Rs. 4,702.13 million; standalone EBITDA before exceptional items was Rs. 704.29 million, with a 15% margin.

Outlook and guidance

• Targeting 26 cancer care centres and nine fertility centres by FY18; nine new comprehensive cancer centres were under development, with operations expected by end-FY18.

• Plans to expand cancer services through new centres, capacity additions, partnerships and acquisitions; Ahmedabad centre expansion included LINAC, PET-CT, MRI and gamma-camera equipment.

• Plans to establish African cancer centres, initially in Kenya, Tanzania and Uganda; a definitive agreement with CDC provides for investment in HCG Africa.

• Milann expansion planned through greenfield centres, partnerships and selective acquisitions; Indian IVF cycles forecast to rise from 100,000 in 2015 to 260,000 by 2020.

• Ind AS financial reporting was scheduled to begin April 1, 2016; IT plans included private-cloud infrastructure and a centralized EMR integrated with HIS and ERP systems.