HealthCare Global Enterprises Limited

Financial Performance Overview (Q2 FY27)

All financial figures presented exclude the divested Milann Fertility business (divested June 2026), with prior-year figures adjusted for like-for-like comparison.

Revenue: Consolidated revenue stood at ₹7,318 million, representing 16% year-on-year growth. Excluding the new North Bengaluru hospital, growth was 14% year-on-year.

Volume and Realization: Growth was driven by a 9% increase in patient volumes and a 7% increase in Average Revenue Per Patient (ARPP). The ARPP improvement was supported by a favorable payor mix and increasing contribution from high-complexity oncology treatments, including a 37% year-on-year increase in robotic surgeries.

Revenue Mix: Non-institutional revenue grew by 21% year-on-year, improving its revenue share by over 300 basis points to 69%.

Profitability: EBITDA for the quarter was ₹1,425 million (including North Bengaluru loss of ₹61 million), representing 17% year-on-year growth. EBITDA margin improved to 19.7% from 19.2% in Q2 FY26. The margin expansion was partly moderated by an incremental employee cost of approximately ₹60 million due to a revision in the Karnataka Wage Act 2026. Excluding this wage revision impact, EBITDA growth was over 20% year-on-year.

Financial Performance Overview (H1 FY27)

Revenue: Consolidated revenue stood at ₹14,100 million, representing 15% year-on-year growth.

EBITDA: Adjusted EBITDA stood at ₹2,740 million, registering 18% year-on-year growth. Adjusted EBITDA margin improved by 84 basis points to 19.7% from 18.8% in H1 FY26.

Other Expenses: The company recognized a non-cash ESOP expense of ₹29.8 million arising from a grant in September 2026. Depreciation and amortization expenses stood at ₹1,365 million, up 16% year-on-year, reflecting investments in capacity expansion. Finance costs declined by 11% year-on-year to ₹775 million, supported by debt repayments of ₹1,700 million during the first half.

Profit After Tax: Adjusted PAT (after normalizing the impact of extraordinary expense) was ₹287 million, representing 30% year-on-year growth.

Operational and Cluster-wise Performance

North Bengaluru Hospital: The newest hospital continued its ramp-up, reducing its EBITDA loss to ₹61 million in Q2 from ₹75 million in Q1. The focus remains on accelerating clinical ramp-up and achieving monthly EBITDA breakeven by the end of Q4 FY27.

South Cluster: Revenue stood at ₹2,941 million (18% YoY growth), contributing 40% of overall revenue. Growth was driven by a 14% improvement in ARPP and a 4% increase in patient volumes.

West Cluster: Revenue stood at ₹3,147 million (10% YoY growth), contributing 43% of overall revenue. Growth was driven by a 7% increase in volumes and a 3% ARPP improvement. The Maharashtra region delivered mid-teens growth, partially offset by moderated growth in Gujarat due to deliberate rationalization of institutional mix.

East Cluster: Revenue stood at ₹928 million (23% YoY growth), contributing 11% of overall revenue. Growth was led by an 18% increase in volumes and a 5% ARPP improvement.

Kenya Operations: Revenue stood at ₹302 million, registering approximately 54% year-on-year growth, supported by a new radiation therapy machine and the addition of 13 new beds.

Key Developments and Capacity Expansion

Capacity Addition: The company added 25 operational beds in Q2 (13 in Kenya, 7 in Kolkata, 5 in Nagpur), bringing the H1 FY27 total to 146 beds.

Technology Investments: The company operationalized an MR-LINAC system at North Bengaluru and a cardiac surgical robotic system in Ahmedabad.

Clinical Milestones: Key procedures initiated included the first CAR T-cell therapy at Ahmedabad, robotic breast surgery in Bengaluru, robotic spine surgery in Rajkot, and transoral robotic surgery in Vadodara. The company also launched a 1,212-gene liquid biopsy panel and introduced two new nuclear medicine tracers in Bengaluru.

Regulatory Update and Impact Assessment

Trade Margin Caps: The management addressed recent regulatory developments concerning trade margins on 137 non-scheduled anti-cancer drugs, effective November 2026. Based on their assessment, the company estimates a mid-to-high single-digit percentage impact to EBITDA on an annualized basis. The impact is expected to be seen from Q3 FY27 onwards. The management expressed confidence in mitigating the near-term impact through trade channel optimization, volume expansion, improved asset utilization, revenue mix optimization, and operational efficiencies.

Balance Sheet and Capital Allocation

Net Debt: Net debt excluding capital leases stood at ₹5,751 million as of September 30, 2026.

Capital Expenditure: Capex incurred in H1 FY27 was ₹1,279 million, primarily directed towards capacity expansion, medical equipment, and infrastructure upgrades.

Right Issue Proceeds Utilization: The proceeds from a recent right issue (₹400 crore) were utilized as follows: ₹150 crore for the acquisition of an additional 34% stake in MG Vizag, ₹170 crore for debt repayment, and ₹100 crore for general corporate purposes.

Other Material Items

EPCG Provision: The company recognized an exceptional expense of ₹116 million towards provisioning related to Export Promotion Capital Goods (EPCG) obligations. This followed a detailed assessment, and no further material provisions are anticipated in the near term. The provision was attributed to a reassessment of export obligations impacted by geopolitical disturbances in the Middle East and Bangladesh. There is no immediate cash impact from this provision.

Cash Flow: The CFO to EBITDA conversion ratio for H1 was 54%, lower than the historical 80%+. Management attributed this to: 1) ₹35 crore received from the Andhra Pradesh Government under the Aarogyasri scheme being classified under financing activities; 2) an extended credit period from a major supplier; and 3) a tax expense of ~₹30 crore in H1 FY27 versus a deferred tax asset recognition of ~₹99.6 crore in H1 FY26. Normalized conversion is expected to return to historical levels.

Guidance and Outlook

Management reaffirmed its guidance for mid-teens revenue growth and high teens to 20% EBITDA growth. The North Bengaluru hospital is on track to achieve monthly EBITDA breakeven by Q4 FY27. The Gujarat cluster is anticipated to return to mid-teens growth by Q4 FY27. The company expects to maintain a tax rate of approximately 30%-35% in the near term.