A brokerage has recommended a 'buy' rating for HealthCare Global Enterprises' shares and set a target price of ₹600 in a 6-9 month timeframe.
Positive signals have once again emerged for investors in the healthcare sector. Axis Securities, a brokerage firm, has expressed confidence in HealthCare Global Enterprises (HCG), a well-known company in the small-cap segment. The brokerage believes that this stock can generate good returns for investors in the next 6 to 9 months.
Axis Securities has given a 'BUY' rating to HCG's stock and set a target price of ₹600. Compared to the current market price, this indicates a potential increase of approximately 10 percent. Currently, the company's shares are trading around ₹549, while its 52-week high is ₹636. This means the stock is still trading about 14 percent below its upper level.
Reasons for the Rise
Analysts at Axis Securities say that HCG is steadily strengthening its foundation. The company has not only improved its infrastructure but has also expanded its network through new investments and acquisitions. This has also strengthened long-term growth prospects.
The broker report also stated that the new campuses started by the company have now reached a position to generate profits. Most of these units are now operating at margins of over 20 percent.
Benefiting from Market Growth
HealthCare Global is one of the few companies in the country that has special experience and infrastructure in cancer treatment. The brokerage says that the cancer treatment market in India is growing at a rate of around 17 percent annually. HCG is growing at a faster pace than this growth rate.
The company has planned to add 900 new beds in the next 4-5 years. The aim is to increase the reach of healthcare services in different parts of the country. These expansion plans can impact the company's revenue and profits.
Support from New Investors
A major investment has also been seen in HCG recently. A renowned global private equity firm like KKR has purchased CVC's stake. This change indicates that global investors are also showing confidence in the company's strategy and future prospects.
The brokerage says that KKR's investment will not only strengthen the company at the capital level but will also support its management and growth strategy. This is a positive sign for the company's long-term stability and return prospects.
Excellent Returns in the Last Three Years
If we talk about HCG's performance in the last few years, this stock has been consistently giving better returns to investors. The share has risen by about 15 percent in the last six months. It has recorded a rise of about 45 percent in a year. Furthermore, in the last two years, it has given a return of about 72 percent.
In the three-year period, the company's share has almost doubled, which is rarely seen in small-cap stocks. During this time, the company improved its margins and adopted a policy of expansion to new locations, which strengthened its business.
What Technical Analysis Says
From a technical indicator perspective, the share is currently trading above the 20-DMA and 50-DMA. The immediate support for the stock is seen around ₹530 and the resistance around ₹575. If a breakout occurs, it could touch the ₹600 mark.
The volume of the share is increasing continuously, which indicates the interest of institutional investors in it. In addition, the increase in delivery-based trading also indicates that long-term holdings in the stock have increased.
Fundamental Points Related to the Stock
- Market Cap: Approximately ₹7,500 crore
- 52-Week High: ₹636.80
- 52-Week Low: ₹345.25
- Promoter Holding: Approximately 65 percent
- Return on Equity (ROE): Around 12 percent
- EBITDA Margin: Over 20 percent
The company's current focus is on providing quality healthcare services in the premium segment. HCG has gained a special recognition due to its specialized treatment for serious diseases, especially cancer.
