Release Date: November 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HealthCare Global Enterprises Ltd (NSE:HCG, Financial) reported a robust 14% year-on-year revenue growth for Q2 FY25, reaching INR553.5 crores.
- The company's adjusted EBITDA crossed INR100 crores for the first time, showing a strong growth of 21% year-on-year.
- HCG's oncology business experienced impressive 20% growth after adjusting for the exited center in MSR, Bangalore.
- The company has successfully operationalized a new state-of-the-art 200-bedded comprehensive cancer care center in Ahmedabad.
- Digital initiatives have significantly boosted patient acquisition, with digital channel revenue rising to 14% of overall revenue in Q2 FY25, up from 4% in Q2 FY23.
Negative Points
- International revenue declined by 17% due to geopolitical challenges in markets like Bangladesh.
- The South Mumbai center faced challenges due to a decline in international business, impacting overall performance.
- The company incurred a loss of INR3.8 crores to INR4 crores in the South Bombay hospital for the first half of FY25.
- There was a one-time other income of INR5 crores, which will not continue in future quarters.
- The company is facing challenges in achieving double-digit ROCE in emerging centers, particularly in South Mumbai.
Q & A Highlights
Q: What was the loss in Bombay Hospital in the first half?
A: The South Bombay hospital posted a loss of approximately INR3.8 crores to INR4 crores in the first half. - Meghraj Gore, CEO
Q: Can you explain the rationale behind the slump sale or divestment of the business to a wholly-owned subsidiary?
A: The transaction involves moving our Triesta and Cyclotron business out of the HCG fold into a separate entity to allow for expansion beyond the HCG network. This realignment focuses on diagnostics and lab business growth. - Ruby Ritolia, CFO
Q: When will the emerging centers achieve double-digit ROCE?
A: Kolkata is showing positive ROCE and is expected to be in high teens. Borivali is generating decent ROCE in single digits. South Mumbai is the challenge, but we expect a turnaround in a couple of quarters. - Meghraj Gore, CEO
Q: What is the strategic importance of increasing digital sales, and how does it impact profitability?
A: Digital initiatives are crucial for reaching a wider market, especially in non-metro areas. The cost of acquiring patients through digital channels is lower, enhancing profitability. We aim to achieve 25% of revenue through digital platforms in the next three to five years. - Meghraj Gore, CEO
Q: How should we look at growth for MG Hospital acquisition and its impact on margins?
A: We plan to add beds and leverage synergies between our existing and acquired centers to drive growth. MG Hospital's current occupancy is around 70-75%, and we aim to debottleneck and improve growth. - Meghraj Gore, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
