Healthcare Global Enterprises Limited June 2016 Disclaimer THIS - - PowerPoint PPT Presentation

Healthcare Global Enterprises Limited June 2016

2

Disclaimer

THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. This presentation has been prepared by HealthCare Global Enterprises Limited (the "Company"). These materials are not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia). These materials are not an offer

• f securities for sale into the United States, Canada or Japan. Any securities of the Company have not been and will not be registered under the U.S. Securities Act of

1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of any securities of the Company is being made in the United States. The information contained in this presentation is for information purposes only and does not constitute or form part of an offer or invitation for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto in India, the United States or any other jurisdiction. No person accepts any liability whatsoever for any loss howsoever arising from the use of this document or of its contents or otherwise arising in connection therewith. The information set out herein may be subject to updating, completion, revision, verification and amendment without notice and such information may change materially. Financial information contained in this presentation has been derived from the restated consolidated and standalone financial statements of the Company and have been rounded off to the next integer, except percentages which have been rounded off to one decimal point. This presentation contains certain "forward looking statements". Forward‐looking statements are based on certain assumptions and expectations of future events. Actual future performance, outcomes and results may differ materially from those expressed in forward‐looking statements as a result of a number of risks, uncertainties and

• assumptions. Although the Company believes that such forward‐looking statements are based on reasonable assumptions, it can give no assurance that such expectations

will be met. Neither the Company nor any of its advisors or representatives assumes any responsibility to update forward-looking statements or to adapt them to future events or developments. This presentation includes certain industry data and projections that have been obtained from industry publications and surveys. Industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance that the information is accurate or complete. Neither the Company nor any of its advisors or representatives have independently verified any of the data from third-party sources or ascertained the underlying economic assumptions relied upon therein. No representation or claim is made that the results or projections contained in this presentation will actually be

• achieved. All industry data and projections contained in this presentation are based on data obtained from the sources cited and involve significant elements of subjective

judgment and analysis, which may or may not be correct. For the reasons mentioned above, you should not rely in any way on any of the projections contained in this presentation for any purpose. This presentation is based on information regarding the Company and the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this presentation, which neither the Company nor its advisors or representatives are under an obligation to update, revise or affirm.

3

Snapshot of the Business

 Specialty healthcare provider with a focus on cancer and fertility  Largest1 provider of cancer care in India under the “HCG” brand  Leading provider of fertility treatment in India under the “Milann” brand  FY16 Financials - Revenue: INR 5,819 mn; EBITDA: INR 897 mn  NABH, ISO 9001, NABL and CAP accredited5

Key Services and Brands

Introduction to HCG

1 In terms of the total number of cancer treatment centres licensed by the AERB as of March 31, 2015 (Source: Government of India, Atomic Energy Regulatory Board) 2 Discontinued operations 4 Post minority Interest of INR 36mn 5 NABH accreditation for HCC Bengaluru, HMS Ahmedabad; ISO 9001 certification for pathology laboratory at HMS;

NABL and CAP accreditations for Triesta

6 As of June 30, 2015 HCG was in the process of registering the trademark “HCG HOSPITALS”

Overview of HCG

 Comprehensive cancer diagnosis and treatment services  17 comprehensive cancer centres, three freestanding diagnostic centres and one day care chemotherapy centre as of May 31, 2016  Comprehensive reproductive medicine services  Five fertility centres in Bengaluru and one in Delhi as of May 31, 2016  Clinical reference laboratory with specialization in oncology  Undertakes clinical trial management and R&D services for pharmaceutical and biotech companies  Two multispecialty hospitals in Gujarat state as at May 31, 2016 Cancer Care Fertility Treatment Clinical Reference Laboratory Multi- specialty Hospital

6

Future Outlook

 9 new comprehensive cancer centres under development across India  Expansion of Milann fertility centres across India  Expansion into Africa in partnership with CDC, UK to set up cancer centres

www.hcgel.com

4

Evolution of HCG as a Provider of Speciality Healthcare and India’s Largest Provider of Cancer Care¹

1st cancer centre in the HCG network was set up Awarded Oncology Leader

• f the Year by Frost &

Sullivan Entry into the clinical laboratory business through acquisition of Triesta Entry into Gujarat through acquisition of Medi-Surge Hospital Entry into fertility business through the acquisition of 50.1% in BACC Healthcare Pvt Ltd  India’s largest provider of cancer care¹  #1 Rank nationally in Fertility2  Partnered with CDC to enter Africa  IPO in March 2016

¹ In terms of the total number of cancer treatment centres licensed by AERB as of March 31, 2015 (Source: Government of India, Atomic Energy Regulatory Board)

2 Times Health All India Critical Care Hospital Ranking Survey, 2016

2005 2007 2011 2013 1989 Today

First Private Equity Financing (IDFC PE)

2006 Introduction to HCG www.hcgel.com

5 Introduction to HCG

1 As of 30-May-2016

HCG’s Cancer Care Network in India

Bengaluru

Delhi Ahmedabad Bhavnagar Shimoga Hubli Nasik Mumbai Mangalore Chennai Trichy Ongole Vijaywada Cuttack Ranchi

Centre of Excellence (CoE) (1) Day Care Chemotherapy Centre (1) Freestanding Diagnostic Centre (3) Comprehensive Cancer Centre (17)2 Cancer Centres Under Development (12)

Gulbarga Baroda Vishakhapatnam Kanpur Kochi Jaipur Kolkata Nagpur Bengaluru M S Ramaiah Nagar Kalinga Rao Road Double Road Koramangala

Network of Existing and New Centres In Development¹

 1,291 Beds  21 Linear Accelerators  12 PET-CT Scanners  200+ oncologists  38 Operation Theatres

Infrastructure¹ New Patients 37,315 Radiotherapy Patients 12,220 PET CTs 22,555 Chemotherapy Admins 52,052 ARPOB (INR per day) 26,846 ALOS 2.87 Key Operating Metrics (FY 2016)

www.hcgel.com

6

Partnership driven growth strategy

Location: Bangalore Partners (Business): M.S. Ramaiah Hospital Teaching Hospital Nature of Partnership: Revenue Share Location: Nasik Partners (Business):

• Dr. Raj Nagarkar

Surgical Oncologist Nature of Partnership: Profit Share Location: Chennai Partners (Business): Kauvery Hospital Multi-Speciality Hospital Nature of Partnership: Revenue Share Location: Cuttack Partners (Business):

• Dr. K.S. Panda

Surgical Oncologist Nature of Partnership: Fee for service and Rent Location: Hubli Partners (Business): NMR Medical Institute Pvt. Ltd. Diagnostics Centre Nature of Partnership: Rent Location: Ahmedabad Partners (Business): Astha Oncology Private Ltd. Group of Surgical Oncologists Nature of Partnership: Joint Venture www.hcgel.com

7 Investment Thesis

1 Commencement of Operation (Calendar year) 2 Utilizes the neonatal ICU facilities of partner

Milann Well Positioned to Capture Market Potential

Entry Into High Potential Fertility Treatment

 Registered 3,753 new patients (couples) and performed 1,311 IVF cycles in FY2016

Overview of BACC Healthcare and Milann Milann’s Fertility Centres as on FY 2016 Highly Qualified Team Led by Dr. Kamini Rao

 In 2013, HCG acquired a 50.1% stake in BACC Healthcare Pvt Ltd.  Pursuant to the acquisition HCG operates fertility centres under the “Milann” brand  Milann fertility centres provide comprehensive reproductive medicine services, including assisted reproduction, gynaecological endoscopy and fertility preservation  Founded BACC in 2002  Has over 25 years of experience and track record in providing fertility treatment  Pioneer in the field of assisted reproduction in India  Awarded Padma Shri by President of India in 2014 for contribution to the field of assisted reproduction  Leads day to day clinical operations of Milann and key contributor to its growth  A post-graduate fellowship program for fertility specialists and training programs for fertility specialists and embryologists Location in Bengaluru Year¹ Number of Beds IVF Endoscopy Operation Theatre Embryology Laboratory Neonatal ICU Shivananda Circle 1989 38

   

Jayanagar 2010 26

   

Indiranagar 2012 6

 –  –

MS Ramaiah Nagar 2015 6

   ²

Greater Kailash, Delhi 2016 4

   –

Future Strategy and Outlook

 Fragmentation of the infertility field presents an

• pportunity to leverage the experience of

building a national brand  Pan-India expansion plan underway, leveraging HCG’s partnering strategy and Dr. Kamini Rao’s reputation and expertise  Standardized clinical protocols and quality standards

www.hcgel.com

8 Strategy and Outlook

Strategy and Outlook

Expand the Reach of Cancer Care Network in India  9 new CCCs in development, scheduled to commence operation in FY 2017 and FY 2018  3 new CCCs commenced operation (as of May 31, 2016)  Expansions underway at Hubli, Cuttack and Ahmedabad Strengthen HCG Brand to Reach More Cancer Patients  Invest in strengthening the HCG brand, enhancing market presence, brand image and visibility  Strengthen patient support groups comprising cancer survivors to spread awareness and educate patients  Grow the base of referring physicians Expand Cancer Care Network to Africa  Planning to establish a network of specialty cancer centres in Africa through partnership arrangements and acquisitions  Entered into an agreement with CDC, pursuant to which CDC will invest in our subsidiary, HCG Africa, which has been formed to establish a network of CCCs in Africa Upgrade and Strengthen Information Technology Infrastructure  In the process of significantly upgrading IT infrastructure to enhance quality of care delivered to patients  IT infrastructure is based on a private-cloud computing system and will include a centralised EMR system seamlessly integrated with RIS/ PACS, biorepository, HIS and ERP Expand Milann Network

• f Fertility Centres

Across India and Build Milann Brand  New Milann centres in 3 new cities scheduled to commence operation in FY 2017  Milann centre in Delhi launched  Invest in building the Milann brand, enhancing market presence and visibility

www.hcgel.com

9

Q4 FY16 & FY2016 – Financial performance

www.hcgel.com

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Strong Growth in Revenue, EBITDA and PAT

Financial Highlights: Q4 FY16

• Revenue grew 16.3% y-o-y
• HCG(1) centres: +15.5% y-o-y
• Milann(2) centres: +25.7% y-o-y
• EBITDA margin improved to 16.9%
• EBITDA from existing centres: INR

271.2 Mn

• EBITDA margin of existing centres:

18.1%

• EBITDA loss from new centres

launched in FY16: INR 11.6 Mn INR million except per share data

Growth Period ended March 31 Q4-FY16 Q4-FY15 (y-o-y) Income from Operations 1,537.5 1,321.7 16.3% EBITDA(1) 259.6 174.9 48.4% EBITDA Margin (%) 16.9% 13.2% PAT(2) 36.4 (2.5) NM PAT Margin (%) 2.4%

• 0.2%

Earnings Per Share 0.49 (0.04) NM

(1) EBITDA before Other Income and Exceptional Items (2) Profit after taxes and minority interests 1) Centres operated under the “HCG” brand – 15 comprehensive cancer centres, 2 multispeciality hospitals, 3 diagnostic centres and 1 day care chemotherapy centre, as at March 31, 2016. 2) 5 fertility centres operated under the Milann brand, as at March 31, 2016.

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Growth in revenues and margins across centres

Financial Highlights: FY 2016

• Revenue grew 12.1%
• HCG(1) centres: +11.9%
• Milann(2) centres: +14.4%
• EBITDA margin improved to 15.4%
• EBITDA from existing centres: INR

930.1 Mn

• EBITDA margin of existing centres:

16.2%

• EBITDA loss from new centres

launched in FY16: INR 33.5 Mn INR million except per share data

Growth Period ended March 31 FY16 FY15 (y-o-y) Income from Operations 5,819.8 5,193.8 12.1% EBITDA(1) 896.6 762.5 17.6% EBITDA Margin (%) 15.4% 14.7% PAT(2) 12.4 8.4 47.6% PAT Margin (%) 0.2% 0.2% Earnings Per Share 0.17 0.12 41.7%

(1) EBITDA before Other Income and Exceptional Items (2) Profit after taxes and minority interests 1) Centres operated under the “HCG” brand – 15 comprehensive cancer centres, 2 multispeciality hospitals, 3 diagnostic centres and 1 day care chemotherapy centre, as at March 31, 2016. 2) 5 fertility centres operated under the Milann brand, as at March 31, 2016.

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Revenue Break-up (FY2016)

Operating Highlights

Karnataka 49% Gujarat 26% East India 8% Tamil Nadu 5% North India 5% Maharashtra 4% Andhra Pradesh 3% Fertility Centres 8% HCG Centres 92%

Consolidated FY16 Revenue: INR 5,820 Mn HCG Centres FY16 Revenue: INR 5,358 Mn

• 1. Centres operated under the “HCG” brand – 15 comprehensive cancer centres, 2 multispeciality hospitals, 3 free standing diagnostic

centres and 1 day care centre, as at March 31, 2016.

• 2. 5 fertility centres operated under the Milann brand, as at March 31, 2016.

(1) (2)

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Strong Growth From Centres Across India

HCG Centres

INR million except per share data

Growth Period ended March 31 Q4-FY16 Q4-FY15 (y-o-y) Karnataka 695 606 14.7% Gujarat 381 291 31.0% East India 109 86 26.9% Tamil Nadu 69 55 26.0% North India 66 68

• 3.8%

Maharashtra 49 45 8.4% Andhra Pradesh 49 36 33.9% Centres exited in FY16(1)

• 39

NM 1,417 1,226 15.5%

(1) Diagnostic centre in Chennai: Q3-FY16; BNH cancer centre in Mumbai: Q2-FY16 INR million except per share data

Growth Period ended March 31 FY16 FY15 (y-o-y) Karnataka 2,613 2,415 8.2% Gujarat 1,363 1,095 24.5% East India 414 318 30.2% Tamil Nadu 249 205 21.8% North India 276 289

• 4.5%

Maharashtra 205 177 15.6% Andhra Pradesh 182 147 24.1% Centres exited in FY16(1) 57 146 NM 5,359 4,790 11.9%

(1) Diagnostic centre in Chennai: Q3-FY16; BNH cancer centre in Mumbai: Q2-FY16

Q4 – FY16 FY 2016

• Continuing strong ramp at several cancer centres in Q4

FY16

• Ahmedabad: +32% y-o-y
• Cuttack: +40% y-o-y
• Chennai: +27% y-o-y
• Vijaywada and Delhi centre being revamped
• New centres added INR 33 Mn in Q4-FY16
• Strong ramp at several cancer centres in FY16:
• Ahmedabad: +29%
• Cuttack: +38%
• Chennai: +38%
• Vijayawada and Delhi centre revamp underway
• Excluding centres exited in the year, growth in revenue
• f 14% over prior year

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Operating Metrics

HCG Centres

• 1. Includes 15 Comprehensive Cancer Centres and 2 multispeciality hospitals operated under the HCG brand.
• 2. New hospitals that commenced operation in FY16. Q1-FY16: Bhavnagar (33 beds), Q4-FY16 : Gulbarga (85 beds)
• 3. During FY16, the Company exited from its CCC at BNH in Mumbai and a diagnostic centre in Chennai.
• 4. No of beds is as at the last day of the period.
• 5. Occupied Bed Days is calculated based on mid-day occupancy of beds.
• 6. Average Occupancy Rate is calculated as Occupied Bed Days divided by the Available Bed Days.
• 7. Average Revenue per Occupied Bed (ARPOB( is calculated as Operating Revenue divided by the Occupied Bed Days.
• 8. Average Length of Stay (ALOS) is calculated as Occupied Bed Days divided by number of Admissions.

Q4-FY16 Results

• Occupied Bed Days: +11%
• 3.9% increase in ARPOB
• Ahmedabad, Cuttack, Chennai and

Vijayawada centres primary drivers of growth in occupancy FY 2016 Results

• Occupied Bed Days: +4%
• 7.6% increase in ARPOB
• KR-DR refocus primary driver of increase in

ARPOB and lower occupancy

INR million except per share data

Growth Growth Period ended March 31 Q4-FY16 (y-o-y) FY16 (y-o-y)

• No. of Centres

17 17 Beds 1,146 15.4% 1,146 15.4% Occupied Bed Days 53,422 11.2% 2,01,513 3.9% Average Occupancy Rate 51.2% 51.0% ALOS 2.97

• 8.5%

2.93

• 4.5%

ARPOB (Rs./Day) 26,523 3.9% 26,592 7.6% Revenue (INR mn) 1,417 15.5% 5,359 11.9% EBITDA Margin (%) 21.1% 20.2%

15

 Established in 1989. Centre of Excellence created in 2006.  83 oncologists, 50+ other specialist physicians

Improving trend with Q4 ROCE above 20%

Bangalore – KR and DR Centres

Key Facilities  4 Linear Accelerators (incl. Cyberknife and TomoTherapy radiotherapy systems)  2 PET-CT Scanners; Cyclotron to manufacture radioisotopes  daVinci Robotic surgery system; 11 Operation Theatres  317 Beds  Bone Marrow Transplant Unit

Overview

(1) ROCE calculated as EBIT divided by average Capital Employed (2) Capital Employed = Net Block + Operating Current Assets - Operating Current Liabilities

• Shift in payer mix in FY16:
• Government payers decreased from 15.1 % to

9.0 % of total revenue in FY16

• Revenue from international patients increased

by 29% in FY16

• ROCE(1) in Q4-FY16 increased to 20.2% as

compared to 16.6% in FY16.

INR million except per share data

Growth Growth Period ended March 31 Q4-FY16 (y-o-y) FY16 (y-o-y) Beds 317 317 Occupied Bed Days 14,533 3.8% 57,299

• 9.1%

Average Occupancy Rate 50.4% 48.5% ALOS 3.02

• 1.4%

2.91

• 5.7%

ARPOB (Rs./Day) 38,180 9.0% 37,278 18.8% Revenue (INR mn) 555 13.2% 2,136 8.0% EBITDA Margin (%) 26.6% 24.9%

16

Milann commences national expansion

Operating Highlights

Q4 FY 16 Q4 FY 15 Growth (y-o-y) New Registrations 1,122 1,023 9.7% IVF cycles 340 284 19.7% Revenue 119 96 24.5% FY 16 FY 15 Growth (y-o-y) New Registrations 3,753 3,533 6.2% IVF cycles 1,311 1,111 18.0% Revenue 461 403 14.4%

• First centre outside Bangalore opened in

South Delhi in Q4-FY16

• Milann Ranked #1 Fertility Sciences in

India

• Milann’s 4th centre in Bangalore launched in

FY16

• New centres in Chandigarh and Cuttack in

advanced development

17

Expansions and New Centres primary drivers of FY16 CapEx

Capital Expenditures

(INR Million)

FY15 FY16 Cancer Centres Existing Centres 362 339 Expansions 173 528 New Centres 480

(1)

1,250 1,015 2,117 Fertility Centres Existing Centres 11 48 Expansions 99

• New Centres

23 64 133 112 Grand Total 1,148 2,229

(1) (2) Capital expenditures include security deposits

Includes INR 253 million of assets at HCG Regency as a result of consolidation

• Expansions, technology enhancements

completed at Hubli, KR/DR, Cuttack and Ahmedabad.

• Invesment of INR 1,250 Mn in new centres,

including 3 new centres that have commenced

• peration as of May 31, 2016

18

Year of capex / expansion along with reduction of debt through IPO proceeds

Net Debt Position – FY 2016

• IPO proceeds of INR

2,364 Mn

• Bank term loan retired

from IPO proceeds of INR 1,470 Mn.

• INR 764 Mn in new

vendor finance against CapEx for New Centres

• Net Debt of 2,106 Mn

at 31-Mar-06. As at As at As at As at As at INR Million 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 Net Debt Bank Debt 1,983

(1)

1,983 2,199

(1)

2,145

(1)

694

(1)

DPO 650 683 1,050 1,350 1,558 Capital Leases 600 599 600 600 599 Other Debt 190 174 150 130 137 Less: Cash and Equivalents (270) (257) (270) (206) (882)

(2)

Net Debt 3,153 3,181 3,729 4,019 2,106 Debt in New Projects Bank Debt 150 165 211 253 315 Vendor Finance

• 77

444 534 764 150 242 656 787 1,079 Net Debt (Excl. New Projects) 3,003 2,939 3,073 3,232 1,027

(1) (2) Includes 635 mn investment in mutual fund as at Marach 31, 2016 Net of bank balance held as margin money, INR 67 mn as at March 31, 2015, INR 66 min as at Jun 31, INR 71 min as at Sep 30, 2015, INR 85 min as at Dec 31, 2015 and INR 70 mn as at March 31, 2016

19

Project Update

3 New Cancer Centres operational as of May 2016 Additional 3 Cancer Centres will be operational by March 2017 3 New Milann Fertility Centres will be

• perational by March 2017

Location Bed Capacity Project Cost Expected Start Date Gulbarga, Karnataka 85 245 Q4-FY16 Vishakhapatnam, A.P. 88 295 Q1-FY17 Baroda, Gujarat 60 412 Q1-FY17 Kanpur, U.P. 90 842 Q3-FY17 Borivali, Maharashtra 105 586 Q4-FY17 Nagpur, Maharashtra 115 442 Q4-FY17

Location Start Date Delhi Q4-FY16 Chandigarh Q2-FY17 Cuttack Q3-FY17

INR in millions

20

Appendix

www.hcgel.com

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Appendix A : Investment Thesis

Industry trends and backdrop Largest provider of cancer care in India with a proven track record High quality care provided at a competitive price Strong management team with successful track-record

1 2 3 4

Investment Thesis www.hcgel.com

22

 Cancer prevalence in India estimated to be 3.9mn in 2015 — Estimated 1.1mn new cancer cases reported in 2015  Real incidence could be 1.5x to 2.0x times higher than reported incidence — Difference between reported and real cancer incidence due to under-diagnosis — Reported incidence of cancer in India based on data from the cancer registries, which cover < 10% of the population — Late stage disease presentation due to lack of awareness and participation in screening programs  For example, women³ participation in breast screening mammograms4: USA (65%), China (30%) and India (<1%)

¹ Call for Action: Expanding cancer care in India dated July 2015, published by Ernst & Young; 2 ASR-W is a weighted mean of the age-specific incidence rates . The weights are taken from the population distribution of the ‘World Standard Population‘ defined by WHO, and the estimated incidence rate is expressed per 100,000 population for comparisons between different geographies, as age is a key determinant of cancer incidence; 3 Age Group 40-69 years; 4 Breast screening mammograms once in 24 months

Investment Thesis

Growing Cancer Incidence in India…

Industry Trends and Backdrop

0.9 1.1 1.6-2.2 3.4 1.7 Africa India (Reported) India (Real) China US 94 150-200 174 318 123 Estimated incidence of cancer in 2015 (mns) ASR-W2 (per ’00,000) 62% 71% 31% 81% 70% 30% 72% 91% 19% 43% 10% 8% Breast Cancer Cervical Cancer Head and Neck Cancer USA UK China India

Cancer Diagnosis at Early Stages (Stage I or Stage II)

 Cancer incidence increases with age - India’s population >50+ years to increase from 228m (2015) to 262mn (2020)  Demographic factors alone are expected to result in an increase in cancer incidences of 100,000 to 350,000 cases a year  Tobacco use, alcohol consumption, use of processed food and air pollution  These factors are expected to result in an increase in cancer incidences of 350,000 to 450,000 cases a year  Growing awareness and greater public emphasis

• n screening and improvements

 Expected to result in increased reported cancer rates

Incidence of Cancer Across Countries¹ Comments1 Key Drivers of Cancer Incidence Under Diagnosis of Cancer in India¹

Demographic Changes Exposure to Risk Factor Narrowing Diagnosis Gap

www.hcgel.com

1

23 Investment Thesis

¹ Call for Action: Expanding cancer care in India dated July 2015, published by Ernst & Young

.. And significant demand supply gap in cancer care

Industry Trends and Backdrop

 Lack of adequate infrastructure and absence of mass screening programs are key barriers to timely diagnosis  For example, as of 2014, only 30% of cancer centres in India had advanced imaging technologies like PET-CT  A key requirement for successful radiation therapy is availability of Linear Accelerators (LINACs) 77 110 137 200 1,238 Africa India China UK US 0.05 0.10 0.31 0.92 6.20 Per mn Incidence Per mn Population 200-250 450-550 2014 2020 342 750-900 ~2,000 2015 2020 2020 1.4-2.0 2.3-3.5 2015 2020

Demand for CCCs Demand for LINACs Chemotherapy Cycles (millions)

Region / Country Number of LINACs (2015) LINACs per Million Population Cancer Prevalence per LINAC Cancer Incidence per LINAC US 3,818 11.9 1,572 419 UK 323 5.0 3,096 929 China 986 0.7 6,288 3,144 India 342 0.3 7,310 3,216

Existing Demand Supply Gap in Diagnostics… …and Treatment Outlook for Treatment Landscape¹ PET CTs per Million New Cases Per Year (Global Comparison)¹ Availability of LINACs¹

(in the absence

• f affordability

and availability constraints)

1

www.hcgel.com

24 Investment Thesis

1 As per AERB as of March 31, 2015. (Source: Government of India, Atomic Energy Regulatory Board) 2 Expected to commence operation during FY2016 and FY2017

Largest Provider of Cancer Care in India with a Proven Track Record¹

 Largest provider of cancer care in India in terms of number of cancer treatment centres listed by AERB as of 31-Mar-20151  HCG network spans 14 cities and towns across eight states in India  Through the extensive network, HCG is able to provide cancer care beyond just the metropolitan cities  As of 31-Mar-2015, HCG had 443 specialist physicians including 225 oncologists, 21 radiologists and 23 pathologists and 174 other specialist physicians  HCG believes, it has a strong reputation within the medical community, driven by — Use of advanced technologies — Successful clinical outcomes — Extensive clinical experience of specialist physicians HCG’s market leading position, successful track record and strong reputation in India provides a significant advantage over its competitors

15 3 12 15 2 9 2006 Additions 31-Mar-16 2017/18

Fiscal Year ended March 31 2013 2014 2015 2016

New Patient Registrations 28,546 34,344 37,458 37,315 Patients Treated with Radiation Therapy 10,225 11,181 12,647 12,220 PET-CT Procedures 17,750 21,040 23,988 22,555 Chemotherapy Administrations 40,052 43,988 48,360 52,052

Largest Cancer Care Provider… …With a Strong Track Record Growth in No. of Comprehensive Cancer Care Centres… …Leading to Increase in Patient and Treatment Cycles

Under Development²

2

www.hcgel.com

25

 Ability to manage the large volume of patients across the network while maintaining quality of clinical

• utcomes

 For example, the five year survival rate for breast cancer patients at HCG’s network is comparable to U.S. benchmarks4

Source: Call for Action: Expanding cancer care in India dated July 2015, published by Ernst & Young

1 PPP adjusted 510-720; 2 PPP adjusted 600-720; 3 PPP adjusted 420-540; 4 Vijay Govindarajan and Ravi Ramamurti, Harvard Business Review, "Delivering world-class health Care, Affordably”,

November 2013

Investment Thesis

High Quality Care Provided at a Competitive Price

 Multidisciplinary approach to cancer care - specialist physicians from various disciplines collaborate to provide the best course of treatment  Focus on identifying and adopting appropriate technology — Among first cancer care providers in India to standardise molecular diagnostics technologies — First healthcare provider in India to perform computer assisted tumor navigation surgery  Standardized clinical protocols for diagnosis and treatment  Economies of scale arising out of expansive network — Optimal utilization of equipment — Centralized drug and consumables formulary — Large network gives competitive advantage in terms of favourable economic terms of purchase and financing of medical equipment Approach to Providing High Quality Care… …Results in Successful Clinical Outcomes… …At a Competitive Price

Chemotherapy Surgery Radiation Therapy

60-100 1,100- 1,400 India US³ 60-100 1,500- 1,800 India US² 150-240 1,300- 1,800 India US¹

Drivers of HCG’s Cost Competitiveness Cost of Cancer Treatment in India is lower (INR `000)

3

Ability to provide high quality care driven by a multidisciplinary and technology focused approach

www.hcgel.com

26 Appendix

1 Karnataka, Madhya Pradesh and Rajasthan; 2 Gujarat

• Director of the company since 2000
• MBBS, St. John’s Medical College, Bengaluru; Residency in Oncology, Univ. of Virginia Hospital; Residency in Radiotherapy, MD Anderson Hospital, Univ. of

Texas

• Dr. BS Ajai Kumar

Chairman and CEO

• 14 years of experience in hospital management and administration, including Fortis and Wockhardt
• MBBS, Univ. of Rajasthan; Master’s degree in Hospital Administration, Administrative Staff College of India
• Dr. Mudit Saxena

COO, Region 11

• 13 years of experience in the field of hospital management and administration, including Sterling
• MBBS, Master of Surgery, Maharaja Sagajirao Univ. of Baroda
• Dr. Bharat Gadhavi

COO, Region 22

• 30+ years of experience in fertility medicine
• MBBS, St. Johns Medical College, Bengaluru; Master’s degree in Obstetrics and Gynaecology, Univ. of Liverpool
• Awarded the Padma Shri by the President of India (2014)
• Dr. Kamini Rao

Medical Director, Milann

• 20 years of experience in sales, marketing, business development and general management in healthcare services
• Bachelor’s degree in Law Bangalore Univ.; Post graduate Diploma in Business Administration, St. Joseph’s College, Bengaluru

Dinesh Madhavan Director, Healthcare Services

• 20+ years of experience in the field of finance and accounting, including Fortis Healthcare and ITC
• Member of the Institute of Cost and Works Accountants of India and Institute of Company Secretaries of India

Krishnan Subramanian Chief Financial Officer

• Joined HCG in 2015; earlier Director - Imaging Sales, GE Healthcare (South Asia)
• Member of the Institute of Chartered Accountants of India

Anant Kittur Director, Projects

• 15+ years of experience in the field of information technology management
• MBBS, Mangalore Univ.; Diploma in Family Medicine, National Board of Examinations
• Dr. Ramachandran Balaji

Chief Medical and Information Officer

• 20+ years of experience in the field of human resource management, including Aster DM and Apollo Hospitals
• Master’s degree in Personnel Management, Univ. of Pune

MC Jayaprakash Vice President, Human Resources

• Experienced in the field of establishment and management of hospitals
• MBBS, Bangalore Univ.; MHA, Univ. of New South Wales
• Dr. Naveen Nagar

Vice President, Medical Services

• Been with Company since 2006
• Member of the Institute of Company Secretaries of India

Sunu Manuel Company Secretary and Compliance Officer

www.hcgel.com

4 Strong management team with successful track-record

27

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