Fortis Healthcare (FORH IN) – Q1FY27 Result Update – Margin guidance intact – BUY
Published on 08 Aug 2026
Fortis Healthcare (FORH) reported EBIDTA growth of 16% YoY adjusted for EOSP cost which was in-line with our estimate. Though hospital margin has improved by 530bps over FY23-FY26 to 22.2%, we see further scope for improvement aided by 1) improving case and payor mix, 2) cost rationalization initiatives and ramp-up of Manesar and Greater Noida unit, and 3) new brownfield bed additions. Additionally, we expect margin to expand further, driven by the recent acquisition of People Tree Hospital, Shrimann Hospital and the O&M agreement with Gleneagles. Our FY27E and FY28E EBITDA ex ESOP broadly remain unchanged. We expect FORH to clock 20% EBITDA CAGR ex ESOP over FY26-28E. At CMP, the stock is trading at 25x EV/EBITDA on FY28E, adjusted for Agilus stake and ESOP. Maintain ‘BUY’ rating with TP of INR 1,120/ share; valuing at 30x EV/EBITDA for hospital segment on FY28E.
