HealthCare Global Enterprises HCG is stepping up its turnaround under new management following KKR’s acquisition of a 54 percent controlling stake in 2025 for around $400 million or Rs 3,465 crore at Rs 445 per share. The stock was trading at around Rs 706 on the afternoon of August 17.

Since taking control, KKR and HCG’s management have focused on simplifying the business, strengthening the balance sheet and improving operational efficiency. Dr Manish Mattoo, who joined HCG as executive director and chief executive officer in June 2025, has led the operational and financial restructuring.

The company’s first priority was financial housekeeping. HCG divested its non core fertility business Milann and completed a rights issue, using around Rs 170 crore of the proceeds to reduce borrowings. According to an Axis Direct report, HCG’s debt to equity ratio declined from 2.0 in FY25 to 1.3 in FY26, providing greater financial flexibility for future expansion.

Operational improvements are also beginning to support profitability. HCG’s adjusted EBITDA margin increased to 19.4 percent in the June quarter from 18.2 percent a year earlier, while adjusted EBITDA grew 20 percent. Management indicated that margins have improved from around 17.2 percent to 17.3 percent when Mattoo took charge to approximately 19.2 percent to 19.4 percent currently.

The improvement has been driven primarily by operational initiatives rather than pricing, particularly as oncology remains subject to regulatory oversight and price controls on certain therapies. HCG has increased its outpatient to inpatient conversion rate to around 20 percent from 12 percent to 13 percent earlier. The proportion of cash and insurance patients has also increased to nearly 69 percent from around 66 percent, supporting revenue quality.

HCG has additionally strengthened patient experience and complaint resolution teams while working to reduce operational leakages. Investments in technology, equipment and clinical talent have accompanied these initiatives. The company has added surgical robots, digital PET scanners and MR LINAC systems and strengthened its capabilities in bone marrow transplants, precision diagnostics and cell therapies. Around 20 oncologists have also been recruited in recent months.

The company is seeking to build a broader oncology platform rather than remain primarily associated with radiation oncology. Radiation currently contributes around 21 percent to 22 percent of HCG’s business, while medical oncology accounts for nearly 38 percent and surgical oncology contributes around 18 percent to 19 percent. The expansion of surgical oncology is also supporting higher average revenue per occupied bed.

HCG is now pursuing both organic expansion and selective acquisitions. The company recently opened a new cancer hospital in North Bengaluru and plans additional projects over the coming years. It is targeting around 1,000 additional beds by FY30, with nearly 60 percent expected to come through brownfield expansion.

The company continues to assess acquisition opportunities that can expand its geographical presence and add value to the existing network. However, management believes significant growth can still be generated from the current asset base. Patient volumes increased 11 percent year on year in the June quarter, while revenue rose 13 percent to Rs 695 crore. Sixteen of HCG’s 25 centres reported their highest ever quarterly revenue during the period.

HCG is targeting EBITDA margins of around 21 percent to 22 percent over the next two years and eventually aims to reach 24 percent to 25 percent. Management expects a better payer mix, increasing clinical complexity, new hospital ramp ups and operating leverage to support the improvement.

KKR’s growing healthcare presence is not currently expected to create direct operational synergies with HCG. Management said KKR’s oncology and newer multi specialty healthcare platforms are being operated as separate businesses with distinct operating models and geographical footprints.