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Healthcare Global Enterprises Ltd.

BSE: 539787 Sector: Health care
NSE: HCG ISIN Code: INE075I01017
BSE LIVE 15:51 | 22 Aug 274.05 6.10
(2.28%)
OPEN

270.10

HIGH

274.50

LOW

270.10

NSE 15:31 | 22 Aug 274.65 3.30
(1.22%)
OPEN

268.60

HIGH

276.00

LOW

268.60

OPEN 270.10
PREVIOUS CLOSE 267.95
VOLUME 730
52-Week high 289.00
52-Week low 202.05
P/E 108.75
Mkt Cap.(Rs cr) 2,349
Buy Price 0.00
Buy Qty 0.00
Sell Price 274.05
Sell Qty 7.00
OPEN 270.10
CLOSE 267.95
VOLUME 730
52-Week high 289.00
52-Week low 202.05
P/E 108.75
Mkt Cap.(Rs cr) 2,349
Buy Price 0.00
Buy Qty 0.00
Sell Price 274.05
Sell Qty 7.00

Healthcare Global Enterprises Ltd. (HCG) - Chairman Speech

Company chairman speech

Dear Stakeholders

I would like to thank you for your support and trust in HCG and participating in thiswonderful journey.

This year has been a remarkable year for healthcare in India particularly for HCG.Your Company has become one of the specialty-focused tertiary care providers in thecountry to successfully list on the BSE and NSE. We are now amongst an elite group ofhealthcare organizations who are listed on the stock exchanges. This is a significanthistoric event in the journey of HCG and this milestone would not have been accomplishedwithout the unstinted support and cooperation of all our stakeholders. On behalf of theBoard of Directors I would like to extend my gratitude to each and every one of you.

The healthcare services landscape in India along with its demographics is dynamicwith great opportunities. The industry is growing at a tremendous pace owing to itsstrengthening coverage services and increasing expenditure by public as well as privateplayers. The expectations of patients have also changed as there is a significant portionof society that stands poised to move from a lower socio-economic group to themiddle/upper-middle class group. As this move takes place people will expect high qualityhealthcare centers closer to their towns. This is encouraging as it allows healthcaredelivery to become accessible and affordable.

The prevalence of cancer in India was reported to be 3.9 million people in 2015 with1.1-1.5 million reported new cancer cases during the year. The real incidence of cancer inIndia could be significantly higher than the reported figure. The reported incidence ofcancer in India is based on data collected from the cancer registries which covers lessthan 10% of the population resulting in a significant margin of error in estimation. Thegap between reported and real cancer incidence can primarily be attributed to theunder-diagnosis of cancer in India. If you look at the rate of cancer incidence in Indiawe anticipate the number of new patients to increase from 1.5 million to 2.5-3 million(approximately) in the next five years. Also the number of patients living with cancerwill increase from 3.9 million cases today to over 7 million cases by 2020.

HCG is uniquely positioned to address this issue by being a cancer care focussed group.We believe that every cancer is as unique as the person fighting it. Cancer has theability to adapt mutate and change; and our sole focus is on precision medicine. Thisincludes identifying as many genetic mutations as possible in different cancers fasterand more effective techniques for sequencing tumors new methods to accurately matchtreatments to patients and developing more targeted therapies.

Our cancer care experts treat cancer committing their time and talent to treatingevery stage of the disease with a collaborative approach state-of-the-art technologiesand innovative treatment options. We have a multi-disciplinary team dedicated to treatingcancer while using evidence-based therapies to help patients manage cancer as a chronicdisease. The expert team of doctors and other clinicians take time to understand thepatient’s unique diagnosis and needs; after which they all work together under oneroof to develop an integrative treatment plan tailored to suit the patient.

The Company’s multi-disciplinary approach focuses on outcomes patient safety andpatient-centric cancer care. Its formidable leadership team its presence in tier 2 and3-tier cities its hub-and-spoke model adoption of cutting-edge technologiespartnerships with clinical experts value systems with the highest ethics transparencyand corporate governance strong operating systems and robust processes gives us anextremely strong competitive advantage.

Our extensive network and many new centers in the pipeline will ensure cancerpatients whose treatment could continue over months and maybe even years do not have totravel long distances to get high quality care. Our sole focus has not only been inbuilding world-class cancer care infrastructure and providing comprehensive services butalso in addressing this huge gap in the ‘end-to-end value chain’ in thetreatment of cancer in India.

Additionally HCG has a presence in the emerging field of reproductive sciences underthe brand ‘Milann’ where we offer highly specialised and comprehensive In VitroFertilization (IVF) and related services. This is an unorganised and underserved marketwith huge growth potential. The prevalence of infertility in India has been rising owingto demographic changes lifestyle changes prevalence of several known clinical factorsand ethnicity. We plan to expand our Milann network by setting up greenfield centers andalso by entering into partnership arrangements and undertaking selective acquisitions. Webelieve that in expanding our Milann network we are positioned well to leverageHCG’s successful track record of growing through partnerships with specialistphysicians and hospitals.

The consolidated income from operations for FY16 was Rs. 5819.77 millions as comparedto Rs. 5193.75 millions in the previous fiscal year reflecting a growth of 12%. EBITDAin FY16 was Rs. 896.48 millions compared to Rs. 762.40 millions in FY15 reflecting ayear-on-year increase of 17.6%. EBITDA margin for the year was 15.4% compared to 14.7% inFY15 reflecting an increase of 70 basis points. PAT in the fiscal year was Rs. 12.21millions compared to Rs. 8.34 millions in FY15 reflecting a year-on-year increase of47.6%.

The revenue growth was driven by a 12% growth from HCG centers (which includes cancercare centers and multi-specialty hospitals) while Milann centers contributed to a growthof 14%. HCG centers constituted 92% of the consolidated revenues for the Company and theremaining 8% of the consolidated revenues was contributed by Milann centers.

The key takeaway from the financial results is that your Company demonstrated stronggrowth in revenues EBITDA and a healthy PAT with overall margin improvements for theyear.

Looking at the operations across centers in India Karnataka continues to report asteady increase in the number of international patients. Hubli and Gulbarga are exhibitingthe fastest growth within the Company. The Bhavnagar a multi-specialty hospital whichstarted in April 2015 is performing well. Additionally we have many new centers in thepipeline. Under ‘Milann’ we added new centers in Bengaluru in the currentfiscal. In addition to a center in Delhi we intend to have a presence in AhmedabadCuttack and Chandigarh to tap the potential opportunities in this space.

Your Company expects to grow to 26 cancer care centers and nine fertility centers bythe end of FY18. This will make your Company one of the largest specialty-focussedproviders across India delivering the highest quality care.

Over the past decade your Company redefined the ecosystem in cancer care treatment andfertility to that of an ecosystem of hope in line with its motto of ‘adding life toyears’.

It is this ecosystem of hope that energizes us on our journey. I would like to thankall our stakeholders - our investors trusted patients partners vendors bankersauditors advisors and indeed our network of doctors and employees. We value yourcontribution that has helped HCG build trust add life to the way a patient is treatedand made us a leader in this space. We are committed to focusing on delivering qualityaccessible and affordable cancer care of global standards and creating sustainable valuefor all the stakeholders.

I look forward to your continued support in our journey.

Sincerely

Dr. BS Ajaikumar

Chairman & CEO