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Hospital expansion & diagnostics transformation drive growth:

FORH's outlook remains strong, supported by continued brownfield hospital expansion, improving occupancy, specialty investments and a targeted 25% hospital EBITDA margin by FY28. Agilus Diagnostics is expected to accelerate growth through higher B2C contribution, specialised diagnostics, genomics, network expansion and operational efficiency, so as to deliver sustainable revenue growth, expanding margin and stronger long-term profitability

Brownfield expansion and specialty investments to drive long-term growth :

FORH is well-positioned for sustained growth through its disciplined brownfield expansion strategy, specialty investments and improving operating leverage. The company plans to operationalise ~400 beds in FY27, including nearly 200 beds at FMRI, while newer hospitals, such as Manesar and Greater Noida are expected to improve occupancy and profitability as they mature. Management is also investing in advanced clinical capabilities, including Proton Therapy, robotic surgery and comprehensive oncology centres, which should enhance case mix, pricing power and revenue per occupied bed. Supported by higher utilisation, maturing assets and improved productivity, the management remains confident of achieving its 25% hospital EBITDA margin target by FY28. These structural growth drivers position FORH to deliver a sustainable revenue growth, expanding margin and stronger cash generation over the medium term

Agilus Diagnostics: Positioned for sustainable high-margin growth:

Agilus Diagnostics is building a stronger long-term growth platform by expanding its consumer business, increasing the contribution of specialised and preventive diagnostics, and investing in advanced technologies. Management aims to improve the B2C mix, which offers higher margins and stronger customer retention, while continuing to expand specialised testing. Ongoing network expansion and operational optimisation are forecast to improve market reach and operating leverage, while higher realisation per patient should support profitability. We anticipate that, with rising healthcare awareness, increasing preventive healthcare adoption and growing demand for specialised diagnostics, Agilus is well-positioned to deliver a sustained revenue and margin expansion, making it an increasingly meaningful contributor to FORH's long-term growth

View and valuation:

We forecast Revenue/EBITDA/APAT to expand at a CAGR of 16.2%/18.7%/24.9% over FY26–FY29E. We maintain our ‘BUY’ rating and with a target price to INR 1,140, based on an SoTP valuation (see Exhibit 2). We value the hospital business at 29x (maintained) EV/EBITDA on FY28E and the diagnostics segment at 25x (maintained) EV/EBITDA on FY28

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