ICICI Securities's research report on Fortis Healthcare
Fortis Healthcare (Fortis) delivered a strong beat in EBITDA and PAT led by stronger margins across its hospitals (+140bps) and diagnostic verticals (+510bps). The hospitals vertical grew ~19% led by a 13% rise in occupied beds and ARPOB increase of 6%. Fortis is on track to operationalise ~450/600 beds in FY26/FY27 through brownfield expansion and acquisition. Diagnostic growth is likely to remain in single digits due to the discontinuation of the Aam Aadmi Mohalla Clinic project while segmental EBITDA margin guidance of ~23–24% for FY26 is maintained.
Outlook
We raise our FY26/27E EBITDA by 8%/5% to factor in better margins. Upgrade to HOLD with a higher TP of INR 970 (vs. INR 915 earlier), valuing the hospitals/diagnostics businesses at 28x/27x FY27E EV/EBITDA.
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