Buy Fortis Healthcare Ltd For Target Rs. 775 By Axis Securities Ltd
• Fortis Healthcare reported revenue of Rs 2,007 Cr, which is in line with expectations and supported by higher ARPOB and improved occupancy levels. ARPOB stood at Rs 68,770, up 8.2% YoY, while occupancy improved to 69% (up 200 bps YoY), driven by a 7.2% YoY growth in occupied bed days. Hospital Segment’s EBITDA margins stood at 22% flat on YoY.
• Robust Revenue Growth with Sharp Rise in Adjusted PAT: The company’s topline grew by 12.4% YoY, while overall EBITDA margins stood at 21.7%, up 220 bps QoQ but showing flat growth on an annual basis. The reported PAT was Rs 237 Cr, including an exceptional loss of Rs 54 Cr from impairments on its investment in an associate and PPE. Adjusted PAT grew 31% YoY, driven by operational efficiencies and cost control.
• Specialties and International Segment Fuel Revenue Gains: The 8.2% rise in ARPOB was primarily driven by an improved payer and case mix. During the quarter, the international patient segment reported revenue of Rs 145 Cr, up 17% YoY, contributing 8.1% to Hospital revenue. Key specialities delivered strong performance, contributing 62% of total hospital revenue. Oncology grew 25% YoY, while neurosciences saw 19% growth, supported by strong volume. Robotic surgeries grew 72%, and neuro and spine procedures grew 17%.
• Outlook: Fortis Healthcare remains focused on a profitable growth trajectory, leveraging brownfield expansions, operational efficiencies, and portfolio optimisation. The company targets 14-15% revenue growth in the hospital business, with ARPOB expected to grow at 5-6% YoY. Management reiterates its margin expansion guidance of 200 bps for FY26, also driven by higher occupancy and improvements in the speciality mix. Strategic initiatives such as the acquisition of the Fortis brand, expansion in key clusters (notably Punjab and NCR), and investment in advanced medical technology are expected to further strengthen Fortis’s market position
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SEBI Registration number is INZ000161633
