Fortis Healthcare Stock SKYROCKETS: Brokerage REITERATES BUY with BIG Target Price Hike! See Why!

Brokerage Reports

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Updated on 13 Nov 2025, 06:25 am

Summary: Choice Institutional Equities has issued a positive report on Fortis Healthcare, reiterating its 'BUY' recommendation and increasing the target price to INR 1,140 from INR 1,000. The firm anticipates Fortis Healthcare will achieve continuous double-digit revenue growth.

Growth Drivers: This growth is expected to be fueled by key operational improvements including higher hospital occupancy rates, an increase in Average Revenue Per Occupied Bed (ARPOB), and the company's ongoing brownfield expansion projects.

Margin Improvement: The hospital business margin is forecast to climb towards 25%, supported by the expansion of high-margin services such as oncology treatments, the adoption of robotic surgeries, and greater digital integration across operations.

Diagnostics Segment: Agilus Diagnostics, Fortis Healthcare's diagnostics arm, is projected to deliver steady mid-single-digit growth while maintaining a healthy EBITDA margin of 24–25%, focusing on specialized and preventive testing.

Valuation & Strategy: The 'BUY' rating is backed by a Sum of the Parts (SoTP) valuation. The brokerage has revised its multiples: the hospital business is valued at 29x EV/EBITDA and the diagnostics segment at 25x EV/EBITDA, considering future earnings potential for FY27–28E. This reflects the effectiveness of Fortis Healthcare's cluster strategy and its success in scaling up both hospital margins and diagnostic services.

Future Outlook & Expansion: Fortis Healthcare aims to reach its 25% EBITDA margin target for the hospital segment within the next few years. Significant bed capacity expansions are planned, including 225 beds at Fortis Memorial Research Institute (FMRI), 70 beds in Kolkata, and additional capacities in Manesar and Bangalore. The International Patient business is also expected to remain robust, contributing approximately 8% to total revenue.

Impact: This news is likely to have a positive impact on Fortis Healthcare's stock price as it indicates strong investor confidence from a reputable brokerage and highlights clear growth catalysts. The detailed expansion plans and margin improvement targets suggest solid future earnings potential. Impact Rating: 8/10

Difficult Terms: ARPOB (Average Revenue Per Occupied Bed): This is a metric used in the healthcare industry to measure the average revenue generated from each bed that is currently occupied by a patient. It helps assess a hospital's pricing power and operational efficiency. Brownfield Expansion: This refers to expanding or upgrading an existing facility or site, as opposed to building a new one from scratch (greenfield expansion). In healthcare, it means adding more beds or services to existing hospitals. EBITDA Margin: Earnings Before Interest, Taxes, Depreciation, and Amortization Margin. It is a profitability ratio that shows how efficiently a company is managing its operations. A higher EBITDA margin indicates better profitability. SoTP (Sum of the Parts) Valuation: A valuation method where the total value of a company is determined by valuing each of its business segments or assets separately and then adding them up. EV/EBITDA: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a valuation multiple used to compare companies within the same sector. A lower EV/EBITDA ratio may indicate a stock is undervalued.