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Strong execution and continuous network expansion driving growth: FORH is targeting sustained double-digit growth, supported by the addition of ~472 beds in FY27E, brownfield expansion across high-occupancy hospitals and cluster-led acquisitions. The hospital business remains on track to achieve 25% EBITDA margin by FY28E, while the diagnostics segment is expected to deliver 23– 24% EBITDA margin along with double-digit revenue growth in FY27E. 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 FY28E.

Revenue and EBITDA show strong YoY operational momentum

* Revenue grew 17.8% YoY and 4.4% QoQ to INR 23.6 Bn (vs. CIE estimate: INR 23.4 Bn), driven by increase in occupied beds.

* EBITDA rose 22.2% YoY and 5.3% QoQ to INR 5.3 Bn; margin improved by 82 bps YoY and 19 bps QoQ to 22.5% (vs. CIE estimate: 22.3%).

* APAT grew by 22.0% YoY and 21.3% QoQ to INR 2.8 Bn (vs. CIE estimate: INR 2.4 Bn), with a PAT margin of 11.7%.

Scalable capacity expansion driving sustainable growth and margin upside: FORH is entering a strong brownfield-led expansion cycle with plans to commission ~472 beds in FY27E across new tower at FMRI, Noida, Manesar, Kolkata and Amritsar. FMRI is already operating at 85–90% occupancy, indicating significant unmet demand, while the management expects rapid ramp-up from new capacity addition similar to Faridabad and Noida expansion. Importantly, brownfield projects typically witness immediate capacity absorption and stronger operating leverage. The company plans annual capex of ~INR 9,000 Mn, with a majority allocated towards growth expansion. We believe FORH’s high-occupancy flagship assets, combined with scalable brownfield additions, position the company for sustained revenue compounding and margin expansion in the next 3–5 years. The hospital business is on track to achieve 25% EBITDA margin by FY28E.

Agilus Diagnostics: Network expansion and specialty mix to drive sustainable growth: FORH’ diagnostics business is emerging as a meaningful long-term growth and profitability driver, supported by improving scale, operational efficiency and stronger network integration. The management highlighted that the business has started delivering strong growth alongside margin expansion, with focus now firmly on maximising profitability rather than pursuing premature value unlocking. We believe sustained scale-up in diagnostics can enhance recurring cash flows, improve patient funnelling into hospitals and support long-term margin diversification for FORH. The diagnostics business anticipates an EBITDA margin of 23–24% and doubledigit revenue growth in FY27E. 

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