The Cancer Hospital That’s Learning to Make Money

Welcome to Oncology’s Most Awkward P&L Statement

Healthcare Global Enterprises (HCG) operates the largest private cancer care network in India — 22 comprehensive cancer centres, 4 multi-specialty hospitals, and 7 fertility centres under the Milann brand. In a sector where 1-in-8 Indian women will face breast cancer in their lifetime, and incidence rates are climbing 2–3% annually, HCG is theoretically sitting on a goldmine. The problem? Accounting works differently when you’re building hospitals.

Q3 FY26 delivered a quarterly net loss of ₹1.17 crore. Yes, net loss. The stock P/E is listed as 298x. Yes, 298x. The balance sheet shows ₹1,768 crore in debt. The bed capacity is ramping from 1,923 at FY25 year-end to 2,600+ beds by FY27. Management is guiding 15%+ revenue growth. The company is simultaneously raising ₹425 crore via rights issue and launching two greenfield hospitals in Bangalore. If this sounds chaotic, it’s because KKR just took control in June 2025, and everyone is still figuring out what happens next.

But here’s the thing: EBITDA margins expanded to 17.5% in Q3 (from 16.5% in Q3 FY25). Adjusted EBITDA grew 20% YoY despite the PAT loss. Patient volumes climbed 8% YoY, with oncology network demand described as “resilient” by management. Digital revenue surged 26% despite cutting paid media spend by a “meaningful” amount. Medical talent recruitment went full steam. The Centre of Excellence in Bangalore is deploying MR-LINAC technology — India’s first outside of a handful of metro tertiary centres.

This is a company in transition. No longer a startup running loss-making growth. Not yet a mature operator with clean 15%+ net margins. Somewhere in the middle, capex-heavy, debt-fuelled, capacity-addition phase, building the infrastructure for the next decade of returns. The Feb 2026 concall transcript is gold — management broke down cluster-by-cluster performance, quantified operational hits (Andhra Pradesh scheme losses cost them exactly 25 days of revenue in November), and articulated a path to 20% ROCE and 23–24% EBITDA margins in 3–4 years. That’s specific. That’s measurable. That’s what you pay attention to.

Why Cancer is Boring For Hospitals (But Incredibly Profitable)

HCG’s business is deceptively simple: patients come, get diagnosed, receive treatment (chemo, radiation, surgery, immunotherapy), pay, and go. Unlike general hospitals (where average length of stay oscillates with flu seasons and COVID waves), cancer treatment is remarkably predictable. Longer patient relationships. Higher per-episode spend. Repeat visits over months or years. Superior margin profile when utilisation is consistent.

Revenue mix in H1 FY26: chemotherapy sessions (43%), in-patient bed occupancy (23%), OPD visits (18%), radiation (LINAC) sessions (16%). Geographic mix: Karnataka 27%, Gujarat 28%, Maharashtra 18%, East India 11%, Andhra Pradesh 11%. The company operates across 10 states with major clusters in high-income regions (Bangalore CoE seeing “exceptionally high growth” in immunotherapy and CAR-T therapies; Mumbai brownfield expansion “on the cards”). Fertility treatment under Milann contributes incrementally (H1 FY26: ~2,901 new registrations, 549 IVF cycles).

The capex story is the moat. HCG has deployed over ₹1,564 crore on capex in H1 FY26 alone, expanding from 1,923 operational beds (Mar FY25) to 2,189 beds (Sep 2025). Two mega-greenfields are under construction in North Bangalore (120+ beds, MR-LINAC technology, clinicians mostly hired) and Whitefield (125 beds, expected operational by early FY27). Brownfield expansions across Cuttack (+60 beds by end-FY27), Kolkata, Ranchi, and Vizag. This is capital intensity on a scale that smaller chains cannot compete with. BACC (Milann subsidiary) is also expanding fertility capacity — currently 7 centres, aiming for growth in metros.

Q3 FY26: The EBITDA Story (Ignore the PAT)