Healthcare Global To Focus On Hybrid Expansion To Keep Margins Stable

Healthcare Global Enterprises Ltd. aims to maintain around 20% EBITDA margin despite its medium-term expansion plans of adding nearly 1,000 beds over the next three years, Founder and Chairman BS Ajaikumar said on June 9.

Speaking to NDTV Profit, Ajaikumar noted that the bed expansion plan will be a mix of greenfield and brownfield projects. He said the company has adopted a hybrid innovation model for this purpose, which will ensure margins are not significantly impacted.

“As we move forward, there may be an impact, but we are trying to keep our margins close to 19-20%. In Bengaluru, for example, we are doing the greenfield in a hybrid model. We have gone into Whitefield and North Bengaluru, which actually supplements our growth in our main centre in Bengaluru. So, this is how we are looking forward, creating infusion centres, which again can be considered brownfield cum greenfield,” he said, expressing optimism on minimal pressure on margins.

In the infrastructure sector, greenfield projects begin entirely from scratch, while brownfield projects involve working with or upgrading existing properties or sites.

For FY26, the company plans to add 150 beds to its portfolio. While the full expansion plan is still being finalised, it has already been budgeted for. According to Ajaikumar, HCG closely monitors occupancy rates and typically considers further expansion once occupancy reaches 70-75%.

When asked about what is driving the increased capex infusion in the health sector, the renowned oncologist linked the trend with not just hospital expansion, but technological advancements too. HCG is also adopting innovative models such as "pay for use" to reduce upfront capex, while maintaining access to cutting-edge tech. 

“Capex expansion is going to happen across all hospitals, primarily because of two reasons: hospital expansion and technology advances in treatment. Various technologies have emerged, requiring us to acquire them, which, of course, will be capex intensive,” he explained.

The company expects overall revenue growth of around 15% over the next three years. According to Ajaikumar, as more centres mature, margins are expected to improve.

“Our mature centres will grow around 12–15%. Our new centres will grow 20–25%. So, there will be combined growth of around 15%. We expect this to continue significantly. And one of the most important things for HCG is our mature centres as they come on board. I think our margin will significantly improve. What we are looking at in the next three to four years is improvement in the margin to the low 20s,” the Chairman said.

In Q4FY25, Healthcare Global Enterprises reported consolidated revenue from operations of Rs 585 crore, up 18% from Rs 495 crore in Q4FY24. Adjusted EBITDA rose 14% YoY to Rs 107 crore from Rs 94 crore a year ago. However, the adjusted EBITDA margin declined slightly to 18.3% from 19%. Profit after tax (PAT) fell by 65% to Rs 7.35 crore, compared to Rs 21.3 crore in the corresponding quarter of FY24.

On June 9, shares of Healthcare Global Enterprises closed 0.23% higher at Rs 553.75 apiece on the NSE. In comparison, the benchmark Nifty 50 settled with a gain of 100.15 points, or 0.4%, at 25,103.2.