Fortis Healthcare Ltd. share price target

Fortis Healthcare's (FORH) Q4FY25 EBITDA at Rs4.36bn; up 14% YoY was in line with our estimates. Though hospital margins improved by 170bps/190bps YoY in FY24/FY25, we see further scope for improvement aided by 1) improving case and payor mix, 2) cost rationalization initiatives including divestment of Richmond unit in Bangalore, ramp up of Manesar unit and 3) new brownfield bed additions. Fortis consolidated 89.2% stake in Agilus in Jan'25. We expect...

We recommend a BUY rating on the stock with a target price of Rs 693/share, implying an upside of 10% from the CMP

We maintain a BUY rating on Fortis Healthcare with a target price of Rs 860/share.

We recommend Fortis Healthcare Ltd. with a BUY rating and a target price of Rs 860/share, indicating a 20% upside from the CMP.

Fortis’s Q1 hospital EBITDA performance was disappointing (margins at 15.2% vs our estimate of 16.5% and Q4FY23’s 16.4%). New bed addition took a toll on margins of Mulund hospital (less than 10% vs 20-25% earlier) while seasonality at a few facilities led to a drop in overall occupancy to 64% vs 65% in Q1FY23 and 67% in Q4FY23.

Fortis Healthcare’s (FHL) hospital business grew strong 6.6% QoQ driven by ARPOB improvement, specialty and payor mix. Most of its key hospitals reported strong sequential growth.

Fortis Healthcare’s (FHL) Q2FY23 performance was broadly in line with our estimates. Revenues grew 9.9% YoY to Rs16.0bn (I-Sec: Rs16.2bn) with hospital segment growing 18.1% YoY.

The Supreme Court of India (SC) has announced its judgement in the Daiichi Sankyo-Fortis-IHH case.

Fortis Healthcare’s (FHL) Q1FY23 performance was broadly in line with our estimates. Revenues grew 5.5% YoY to Rs14.9bn (I-Sec: Rs14.5bn) with hospital segment growing 18.5% YoY.