Buy Healthcare Global, target price Rs 156: ICICI Securities

ICICI Securities has given a buy rating to Healthcare Global Enterprises with a target price of Rs 156. The share price moved down by 0.19 per cent from its previous close of Rs 129.55. The stock’s last traded price is Rs 129.30.

Healthcare Global Enterprises Ltd., incorporated in the year 1998, is a Small Cap company (having a market cap of Rs 1614.03 Crore) operating in Hospitals & Allied Services sector.

For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 193.46 Crore, down 28.45 % from last quarter Sales of Rs 270.37 Crore and down 28.05 % from last year same quarter Sales of Rs 268.88 Crore. The Company reported net profit after tax of Rs 43.69 Crore in latest quarter.


Investment Rationale
The brokerage factors in impact of COVID-19 in the estimates and hence, cut its revenue/EBITDA estimates by 6-13/10-26%. However, it raises target EV/EBITDA to 13x from 11x as the balance sheet strengthens with falling leverage which was the key overhang on valuations. It maintains BUY with a revised target of Rs156/share based on 13xFY22E EBITDA (earlier: Rs148). Key downside risks: Higher competition in oncology, and delay in operational turnaround of new centres.

Promoter/FII Holdings
Promoters held 23.9 per cent stake in the company as of June 30, 2020, while FIIs held 23.6 per cent, DIIs 24 per cent and public and others 27.5 per cent.