Prabhudas Lilladher recommends buying HealthCare Global with Rs 820 target

HealthCare Global Enterprises (HCG) reported a consolidated EBITDA of INR 1.27 billion for the first quarter, after adjusting for one-off costs. This figure marks an 18 percent year-on-year increase and aligns closely with estimates provided by brokerage Prabhudas Lilladher. In its research report, the brokerage highlighted the company’s continued push for higher EBITDA growth in the years ahead, reflecting management’s reiterated guidance for sustained outperformance relative to historical averages.

HCG, one of India’s leading cancer care providers, has adopted an asset-light business model that emphasizes partnerships over direct ownership. According to the report, this approach has made HCG’s operations more capital efficient and scalable, enabling the company to grow without taking on significant capital risk. The company’s model positions it to make the most of expansion opportunities with less direct investment, a strategy increasingly favored within the healthcare sector as firms aim to balance growth with financial discipline.

A key factor in HCG’s current operating strategy has been the recent strategic investment by global private equity giant KKR. Prabhudas Lilladher believes that KKR’s backing, coupled with HCG’s exit from its lower-margin fertility business, is expected to bring added discipline and efficiency to the company’s operations and financials. Currently, HCG is delivering a pre-Ind AS margin of around 14 percent, below that of prominent industry peers. The brokerage sees significant scope for improvement as new management and investor involvement may help drive changes across the business.

Future growth is expected to be led by multiple initiatives. KKR is anticipated to play a major role in expanding HCG’s bed capacity, largely through brownfield projects that add to existing facilities. The report also sees scope for an improved payor mix, focused marketing campaigns, and margin expansion as HCG leverages its scalable, partnership-driven model. Prabhudas Lilladher forecasts that EBITDA could register a compound annual growth rate of roughly 24 percent over financial years 2026 to 2028.

At its current market price, HCG’s stock is trading at an attractive valuation of 19 times enterprise value to EBITDA, after adjusting for rentals and minority interests. Citing these drivers, Prabhudas Lilladher has assigned a ‘Buy’ rating to the stock, with a target price of Rs 820 per share, based on a valuation of 22 times FY28 projected EV/EBITDA.

As the company looks ahead, investor focus will likely remain on the pace of expansion, the impact of recent strategic shifts, and the potential for margin improvement, particularly given the involvement of a major private equity partner. All investment opinions and recommendations expressed are those of the brokerage, and Moneycontrol strongly advises readers to consult with a certified investment adviser before making decisions.