HealthCare Global Enterprises, an oncology-focused hospital chain that previously reported consecutive losses, saw its profits rebound in FY22.
According to Dr BS Ajaikumar, HCG Hospitals Executive Chairman, the hospital’s balance sheet has been positively impacted by the reduction in debt and Capex. HCG operates 22 cancer care centres in cities including Bengaluru, Hubli, Kalaburagi, Shimoga, Vijayawada, Visakhapatnam, and more, apart from one in Nairobi. Additionally, it has three multi-specialty hospitals in India.
The hospital currently has a debt of ₹190 crore. In FY22, HCG posted a net profit of ₹38.25 crore, compared to losses of ₹191.54 crore in FY20 and ₹53.30 crore in FY19.
Historically, cancer centres have required significant capital investment, says Ajaikumar. “We had negative PAT for a while due to high Capex investment, depreciation, and new centres ramping up. In fact, around the time COVID broke, we had substantial debt of ₹700 crore,” he added.
HCG received a round of funding about two years ago. Additionally, the chain of hospitals has also entered into a revenue share model in 2019, which has helped in cutting the Capex. BS Ajaikumar told BusinessLine: “About 27 months ago, we received ₹600 crore funding from CVC Capital. The debt has greatly decreased as of late. Going forward, this will only continue to get better.”
The hospital plans to increase its bed capacity to 2,004, with 100 beds in Ahmedabad and 25 in Bengaluru, by 2024. It currently has 1,979 beds spread across its centres.
The investment for the Ahmedabad centre will be ₹85 crore (excluding real estate). In Bengaluru, it is developing a comprehensive centre, primarily a daycare with a radiation facility, which will be ready in 18 months and will cost ₹25 crore, said the company.
While the cancer care hospital is open to exploring brownfield expansion, it will restrict any form of greenfield expansion. Ajaikumar elaborated, “We are not present in Uttar Pradesh and Punjab, where there is a significant number of cancer patients. Next year, we are looking to expand in those areas. We will look at more brownfield instead of greenfield.”
Aside from the expansion, it intends to form more partnerships with doctors. The chairman said, “We have a strong history of running partnership models with doctors as partners. We intend to form more of these collaborations.” HCG runs partnership models in cities such as Nasik, Ahmedabad, Nagpur, and Vijayawada. The Hindu BusinessLine