HCG profit falls 55% after Rs 11.59 crore provision

HealthCare Global Enterprises Limited, referred to as HCG, reported consolidated profit of Rs 9.25 crore for the quarter ended 30 September 2026, down 55% year on year, as a Rs 11.59 crore Export Promotion Capital Goods (EPCG) duty provision offset a 13% increase in revenue from operations to Rs 730.16 crore.

Why did HCG’s September-quarter profit fall?

HCG’s reported profit fell because it recorded a Rs 11.59 crore EPCG provision as an exceptional item in the quarter ended 30 September 2026. The EPCG scheme provides customs-duty exemptions on imported capital goods subject to specified export obligations. HCG evaluated the likelihood of meeting those obligations, estimated a shortfall, and provided for the estimated customs-duty liability and applicable interest.

Profit before exceptional items and tax rose 52% to Rs 30.08 crore from Rs 19.82 crore in the quarter ended 30 September 2025. However, the provision reduced profit before tax to Rs 18.49 crore, compared with Rs 19.82 crore a year earlier. Tax expense was Rs 9.24 crore, against a tax credit of Rs 0.84 crore in the prior-year quarter, leaving reported profit at Rs 9.25 crore.

HCG’s profit also declined from Rs 16.46 crore in the preceding quarter ended 30 June 2026, when no exceptional item was reported. Revenue from operations increased 5% from Rs 693.39 crore, while profit before exceptional items and tax rose from Rs 25.03 crore. The September-quarter charge therefore separated reported earnings from the increase in profit before exceptional items.

How did HCG’s revenue and costs change?

HCG increased revenue from operations by Rs 85.00 crore year on year to Rs 730.16 crore in the September 2026 quarter. Total income rose to Rs 733.71 crore from Rs 649.47 crore. Government-grant income was Rs 1.64 crore against Rs 1.69 crore a year earlier, while other income declined to Rs 1.91 crore from Rs 2.62 crore and from Rs 12.13 crore in the June 2026 quarter.

Total expenses increased 12% to Rs 704.63 crore from Rs 629.96 crore. Medical consultancy charges rose to Rs 160.74 crore from Rs 136.60 crore, employee-benefit expense increased to Rs 114.48 crore from Rs 94.18 crore, and purchases of medical and non-medical items rose to Rs 190.22 crore from Rs 181.22 crore. Other expenses increased to Rs 129.00 crore from Rs 115.61 crore.

Finance costs declined to Rs 38.42 crore from Rs 43.62 crore, while depreciation and amortisation increased to Rs 67.80 crore from Rs 62.80 crore. HCG reported one operating segment, setting up and managing hospitals and medical diagnostic services, and did not provide a separate hospital and diagnostics revenue or profit split. Its share of profit from the joint venture increased to Rs 1.00 crore from Rs 0.31 crore.

What changed in HCG’s cash flow and balance sheet?

HCG generated Rs 139.29 crore of net operating cash flow in the six months ended 30 September 2026, compared with Rs 192.25 crore in the corresponding six months of 2025. Trade receivables increased by Rs 74.49 crore, loans, financial assets and other assets increased by Rs 58.64 crore, and net income taxes paid were Rs 40.70 crore, compared with Rs 12.05 crore a year earlier.

Net cash used in investing activities was Rs 269.69 crore, compared with Rs 58.00 crore in the prior-year six months. HCG spent Rs 130.49 crore on property, plant and equipment and other assets, and paid Rs 154.50 crore towards settlement of a put option exercised by the non-controlling interest in a subsidiary. Financing activities used Rs 224.66 crore, against Rs 80.65 crore, including Rs 226.83 crore of long-term borrowing repayments.

At 30 September 2026, HCG reported cash and cash equivalents before bank overdrafts of Rs 120.18 crore, compared with Rs 536.05 crore at 31 March 2026. Total assets were Rs 3,729.86 crore, down from Rs 3,922.54 crore, while total equity increased to Rs 1,434.22 crore from Rs 1,410.21 crore. Current liabilities declined to Rs 870.47 crore from Rs 982.72 crore and non-current liabilities decreased to Rs 1,425.17 crore from Rs 1,495.17 crore.

What corporate actions will affect HCG after the quarter?

HCG completed the divestment of its entire interest in BACC Healthcare Private Limited on 29 June 2026 for Rs 37.64 crore. BACC, which managed infertility-treatment hospitals, ceased to be an HCG subsidiary on that date. HCG recognised a Rs 2.96 crore gain in other income in the preceding June quarter, received Rs 28.23 crore upfront, and stated that Rs 9.41 crore is receivable within 18 months of the sale date.

On 13 April 2026, HCG completed the acquisition of an additional 34% equity interest in Vizag Hospital And Cancer Research Centre Private Limited for Rs 154.50 crore. HCG had acquired 51% on 1 October 2024 for Rs 206.32 crore. Consideration for the remaining 15% interest will be determined under the shareholders’ agreement.

On 5 October 2026, HCG’s Kenyan step-down subsidiary acquired 10 additional ordinary shares in Advanced Molecular Imaging Limited, increasing its stake from 50% to 50.10%. Amendments to the joint venture agreement shifted key operating and financial decisions to the board, where HCG has majority representation. HCG said Advanced Molecular Imaging Limited will become a step-down subsidiary and be consolidated from 5 October 2026.

Conclusion

HCG’s September 2026 quarter combined higher revenue and higher profit before exceptional items with lower reported profit. Revenue rose 13% to Rs 730.16 crore and profit before exceptional items and tax increased 52% to Rs 30.08 crore, but the Rs 11.59 crore EPCG provision and Rs 9.24 crore tax expense reduced consolidated profit by 55% to Rs 9.25 crore.

The next disclosed items to watch are receipt of the Rs 9.41 crore BACC sale balance within 18 months of 29 June 2026, determination of the consideration for the remaining 15% interest in Vizag Hospital And Cancer Research Centre Private Limited, and the consolidation of Advanced Molecular Imaging Limited from 5 October 2026. The filing also leaves the eventual outcome of the EPCG export-obligation assessment open beyond the provision recognised in the September quarter.