Buy Fortis Healthcare; target of Rs 760: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Fortis Healthcare has recommended buy rating on the stock with a target price of Rs 760 in its research report dated February 11, 2025.

Broker Research

February 11, 2025 / 11:43 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Fortis Healthcare

Fortis Healthcare’s (FORH) Q3FY25 EBITDA at Rs3.75bn was in line with our estimates. Though hospital margins improved by 170bps/260bps YoY in FY24/9MFY25, 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 margins and revenue growth to pick-up from FY26 in Agilus. Our FY26E and FY27E EBITDA stands increased by 3%. We expect EBITDA to clock 20% CAGR over FY25-27E.

Outlook

At CMP, the stock is trading at 22.5x EV/EBITDA on FY27E, adjusted for Agilus stake. Maintain ‘Buy’ rating with revised TP of Rs760/share, valuing the hospital segment at 27x and diagnostic at 25x EV/EBITDA on FY27E.

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