The Bengaluru-based cancer care provider was in scale-up mode until FY19, when it was struck by covid-related headwinds just as it was attempting to ramp up operations at additional centres. With the effects of the epidemic fading, HCG is seeing significant growth and profitability. The firm stated that it plans to increase its return on capital employed from 14% to 18-20% in the next 2-3 years. In H1FY23, HCG increased by 23% year on year to 828 crore
To increase profitability, Healthcare Global Enterprise (HCG), India’s biggest specialist cancer hospital chain, is concentrating on increasing footfalls, boosting asset utilisation, and expanding margins.
The Bengaluru-based cancer care provider was in scale-up mode until FY19, when it was struck by covid-related headwinds just as it was attempting to ramp up operations at additional centres. With the effects of the epidemic fading, HCG is seeing significant growth and profitability. The corporation stated that it plans to increase its return on capital employed from 14% to 18% in the next 2-3 years. HCG increased by 23% year on year to 828 crore in H1FY23.
“Between 2016 and 2020, we established ten additional facilities, but those new hospitals couldn’t fully scale up during the covid epidemic,” Raj Gore, CEO of HCG, told ET in an interview.
“Approximately 60% of cancer patients are diagnosed by general practitioners and other specialists rather than oncologists. With covid decreasing, we initiated a number of measures to raise cancer awareness and other marketing operations in our catchment regions, which assisted us in obtaining new patient registrations “Gore said.
Gore, who formerly worked at Apollo and Fortis, joined HCG as CEO in early 2021.
According to him, new patient registrations are a crucial operating statistic for HCG, which is tied to outpatient income, which accounts for one-fifth of overall revenue. Chemotherapy or medical oncology (35%), radiation (20%), and surgery (25%), are the other revenue streams for HCG.
HCG is pursuing asset light expansion through day care beds, hub & spoke operations, and pay per use for equipment to guarantee that its cancer care centres run at full capacity. In addition, the business is establishing local centres near its hubs to cut travel and logistical expenses for patients who come for follow-ups.
On expenditure, Gore stated that HCG is expecting to build 6 LINACS for its own use as well as pay-per-use over the next 1-2 years to augment capacity in high growth zones, as well as adding 125 beds through ongoing greenfield development in Ahmedabad and Bengaluru. HCG, established by oncologist Dr. BS Ajaikumar, has 22 comprehensive cancer centres in 18 locations, with a total of 2037 operating beds.
Healthcare Global Enterprise will concentrate on footfalls and asset utilisation to enhance profit.
