HCG profit falls 43.80% QoQ despite better operating margin
Revenue rose 5.28% QoQ, but negative other income and a higher tax rate more than offset the operating improvement.
Filed 05 Nov 2026, 20:09 IST · after market close · Healthcare Global Enterprises Ltd (HCG)
Key takeaways
- Management said Q2FY27 revenue growth was led by 9% YoY volume growth and 7% ARPP growth, while consolidated revenue rose 5.28% QoQ.
- Operating margin improved 0.64 percentage points QoQ as revenue grew 5.28% and expenses grew 4.46%, but remained 3.43 percentage points below the 81-peer healthcare median.
- Net profit fell 43.80% QoQ as other income moved from Rs 13.06 cr to negative Rs 8.68 cr and the tax rate rose 15.73 percentage points.
Price around the results
Volume and pricing lifted Q2 revenue
Consolidated revenue increased 5.28% QoQ, with management attributing the growth to 9% YoY volume growth and a 7% rise in ARPP. The company said robotic surgeries grew 37% YoY, alongside increased use of other advanced treatments. Growth was led by Maharashtra, while management said Gujarat was moderated by rationalisation of the institutional mix.
Operating leverage did not reach reported profit
Revenue grew faster than expenses, which helped operating profit increase 9.10% QoQ and lifted operating margin by 0.64 percentage points. Interest fell 3.64% and depreciation declined 3.72%, but profit before tax still dropped 26.13% QoQ. Other income was negative and represented -46.94% of pre-tax profit, while the 15.73-percentage-point rise in the tax rate further reduced net profit. HCG's 18.23% operating margin was 3.43 percentage points below the 21.66% median for 81 healthcare peers that had reported.
Capacity additions and advanced-care rollout continue
Management said HCG added 25 operational beds in Q2FY27, taking first-half additions to 146. It also said the company plans to add 1,000 beds by FY30, with 60% of that expansion led by brownfield projects. The presentation said HCG operationalised adaptive radiation therapy, a LINAC in Africa and cardiac robotic surgery at HMS Ahmedabad, while also performing its first CAR-T therapy at HCC Ahmedabad.
Results were filed after market close
The consolidated results were filed after market close on 5 Nov 2026. The immediate share-price response is not covered in this note.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹732 cr | ₹695 cr | +5.28% |
| Other income | ₹-9 cr | ₹13 cr | — |
| Expenses | ₹598 cr | ₹573 cr | +4.46% |
| Operating profit | ₹133 cr | ₹122 cr | +9.10% |
| Operating margin (%) | 18.23% | 17.59% | — |
| Interest | ₹38 cr | ₹40 cr | -3.64% |
| Depreciation | ₹68 cr | ₹70 cr | -3.72% |
| Profit before tax | ₹18 cr | ₹25 cr | -26.13% |
| Tax | ₹9 cr | ₹9 cr | +7.82% |
| Net profit | ₹9 cr | ₹16 cr | -43.80% |
| EPS (₹) | ₹0.32 | ₹0.92 | -65.22% |
Operating margin of 18.23% compares with a Healthcare sector median of 21.66% across 81 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q2 FY27 revenue growth was led by 9% year-on-year volume growth and 7% growth in ARPP.
- Robotic surgeries increased 37% year-on-year in Q2 FY27.
Guidance & outlook
- HCG plans to add 1,000 beds by FY30, with 60% of the expansion led by brownfield projects.
Expansion
- HCG added 25 operational beds in Q2 FY27, taking total bed additions to 146 in H1 FY27.
New initiatives
- HCG operationalised an adaptive radiation therapy system, a LINAC in Africa and a cardiac robotic surgery system at HMS Ahmedabad.
- HCG performed its first CAR-T cell therapy at HCC Ahmedabad.
- HCG introduced robotic breast surgery, robotic spine surgery and Transoral Robotic Surgery at specified centres.
- HCG launched a 1,212-gene liquid biopsy panel and introduced two new nuclear medicine tracers at KR.
Problems & risks
- HCG's margin expansion was partly affected by a provision for revised wages under the Karnataka Wage Act.
- Growth in Gujarat was moderated due to rationalisation of the institutional mix.
- The North Bangalore facility incurred start-up losses in Q2 FY27.
What to watch
- Whether operating margin holds above 18.23% after the provision for revised Karnataka wages.
- Whether revenue growth can build on the 5.28% QoQ increase and the reported 9% YoY volume growth.
- Progress toward management's stated 1,000-bed FY30 plan, including the 60% brownfield mix.