Health Care Global – the value unlocking story

(Bhaskar Jain) #21

(salil) #22

Thanks for the post . An unethical management negate every other positive aspects of the business.

(AvinashMb) #23

Thanks for starting this thread. I have been waiting for this stock to correct itself. But it does not seem to oblige. Having seen this brand and also experienced it closely as one of my friend’s mother was diagnosed with brain tumor. I can say that they are focussed on the niche and this is very much needed for cancer treatment. With their CCC model which leverages the local specialists expertise i see a risk in operation as any chain wanting to get into cancer treatment will want to replicate the model and that will mean all of them wooing the same specialist.

Expansion to Africa is another risk which i am seeing this stock. As regards Fertility treatment i think this is a big area of growth but i see that this is now currently driven by local-specialists rather than big chains. Milan has been around in Bangalore since the last 3-4 years but every other hospital in Bangalore has a fertility offering. Given that this is more of a referral business hence it may not be easy for Milaan centers to establish themselves in other cities.

Entry by Monish Pabrai is interesting as he never enters a stock which does not have a 5x-10x growth. But it is very hard to see much more growth than what is already factored in the current price.

(Krishnendu) #24

(AvinashMb) #25

This is a unusual moved , though stem cell services will complement the fertility business as the main customers for stem cell storage (the only monetization possible now). Given the high cost and involvement with doctors this will be a easy up sell. Wonder if there is more to it than just stem cell storage. Will be worth to find out.

(Krishnendu) #26

Well ISSL also provide stem cell therapies, and vaccine therapies for cancer patients. So in my opinion the move is very strategic , but I yet to have any specific quantifiable data of it’s growth potential or monetization aspect. I will be grateful if any one can share some quantifiable insight. As far as I know stem cell therapies for cancer is a very niche segment mainly used for bone marrow and blood cancer as on date. Apart from that I do not have much information.

(AvinashMb) #27

Great did not realize that stem cell is used for cancer.Would love to see more inputs and information on the same.

(saurabhshares) #28

What does CCC mean?
Apologies for this basic question.

(Krishnendu) #29

(Krishnendu) #30

HealthCare Global Enterprises Limited (“HCG”) has announced its financial results for the quarter (“Q4 FY18”) and fiscal year (“FY18”) ended March 31, 2018.

Highlights for quarter ended March 31st, 2018

  • Consolidated Income from Operations (“Revenue”) was INR 2,223 mn as compared to INR 1,824 mn in the corresponding quarter of the previous year, reflecting a year-on-year increase of 21.8%.

  • Operating EBITDA for existing centers was INR 343 mn as compared to INR 309 mn in the corresponding quarter of the previous year, reflecting a an Operating EBITDA margin of 19.6% as compared to margin of 19.3% in the previous year.

Highlights for year ended March 31st, 2018

  • Consolidated Income from Operations (“Revenue”) was INR 8,307 mn as compared to INR 7,001 mn in the previous year, reflecting a year-on-year increase of 18.7%.

  • Consolidated Profit Before Depreciation and Amortization, Finance Costs, Exceptional Items and Taxes (“EBITDA”) was INR 1,316 mn as compared to INR 1,147 mn in the previous year, reflecting a year-onyear increase of 14.8%.

  • Operating EBITDA for existing centers was INR 1,278 mn as compared to INR 1,119 mn in the previous year, reflecting a margin of 18.7% as compared to margin of 17.6% in the previous year.

  • Consolidated Profit Before Other Income, Depreciation and Amortization, Finance Costs, Exceptional Items and Taxes (“Operating EBITDA”) was INR 1,188 mn as compared to INR 1,050 mn in the previous year, reflecting a year-on-year increase of 13.2%.

  • Consolidated Profit after Taxes and Minority Interest (“PAT”)(4) was INR 205 million as compared to INR 222 mn in the previous year.

Business Updates for Q4 FY18

  • Completed business combination of Triesta unit with Strand Life Sciences
  • Creates India’s leading specialty diagnostics and precision medicine company with added expertise spanning bioinformatics, genomics and research

  • Combined Strand - Triesta business received investment of growth capital from healthcare focused VC investors HealthQuad / Quadria Capital to drive expansion

  • Sustained reduction in losses from new centers
  • Gulbarga, Vizag and Baroda continue to show strong scale-up

  • Nagpur and Borivali centers ramping-up well with growth in volumes / revenues

  • Exited Kanpur center on account of market dynamics, stake sale to partner completed

  • Consolidated operations in Vijayawada with acquisition of surgical practice of Dr. Gopichand

  • Announced center in Rajkot in partnership with reputed local doctors

  • Center in Nairobi and international operations in Africa showing positive momentum

Commenting on the results, Dr. B.S. Ajaikumar, Chairman and CEO, HealthCare Global Enterprises Ltd. said, “We are pleased to report Q4 and full year FY18 results with strong performance across our verticals and multiple strategic initiatives in our core businesses. With respect to oncology, existing centers are consistently showing margin improvement as they mature while new centers scale-up as per plan, a testament to our focus on execution. This is particularly important with marquee projects coming-up in the next few quarters across South Mumbai, Jaipur and Kolkata. Milann, our fertility vertical, is at the cusp of several exciting growth opportunities and we have the potential to create leadership in the country in IVF. At Strand, the foremost integrated diagnostic and precision medicine platform, we aim to redefine patient care and outcomes across our chosen specialities. We have seen some early success in our international operations in Kenya and are looking to grow the same further as we address underserved markets. Overall, we continue to focus on efficient execution of current plans, while investing in strategic initiatives towards continued future value creation for all stakeholders.”

(MHS) #34


Thank you very much for all the valuable feedback on Hospitals in Apollo Hospitals thread.

Appreciate u r feedback on Health Care Global and its business model and promoters and how the business shaping up…

(Karthik) #35

Gives a pretty good idea on why some of investors have invested in him.

(krrish seth) #36

Thanks for sharing, passionate & patriotic businessman

(AvinashMb) #37

Really insightful interview of Ajaikumar. They will go a long way due to the fact that they a focus on solving the problem for India.

(Binu) #38

Any idea what is the trigger for price action of 12% up move on Monday? I could not find any news/corporate actions.

Is it a sign of a reverse trend in mid-cap corrections?

(stockhunter) #39

Revenue projections (cr)

900+ 2019
1100+ 2020
1350+ 2021

Pat. EPS
-20 2019. 0
30+ 2020. ~4
70+ 2021. ~8
120+ 2022. ~ 15
200+ 2023. ~24

My rough estimate of how the performance of HCG might look over the years, with matured centres doing opm of 20-25% approx now , with more and more centres going to that stage in the next 2-3yrs overall margins might improve to 18-19% with debt peaking this year and hopefully they will stop aggressive debt dependent growths after that, also assuming similar cap utilisations though there is also scope for improvement of utilisations in their matured centres as well, apart from this excellent quality of timely disclosures , belief in a quality promoter, also the IVF part of the business might show good turnarounds with the new CEO.


Hopefully no excessive aggressive expansions in the future and they manage this well.

It raid was seen on their major partner in IVF area Mrs Kamini Rao, though she seems to be sidelined after the incident with new CEO etc.

How the new healthcare policies of the govt , Ayushman etc might impact the company

Disclosure: invested and significant bias, also accumulating on dips, believe il be accumulating at these levels till June 19 when it might show signs of turning around.