Fortis Healthcare (FORH IN) – Q2FY26 Result Update – Strong quarter; margin and bed expansion to drive growth – BUY
Published on 12 Nov 2025
Fortis Healthcare (FORH) reported strong EBITDA of Rs5.6bn in Q2FY26, up 28% YoY, marking another quarter of a strong beat across segments. Though hospital margin has improved by 500bps bps YoY over FY23-H1FY26 to 22.5%, 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 Shrimann Hospital and the O&M agreement with Gleneagles.
Our FY27E and FY28E EBITDA stands increased by 2-5%. We expect EBITDA to clock 24% CAGR over FY25-28E. At CMP, the stock is trading at 24x EV/EBITDA on FY28E, adjusted for Agilus stake. Maintain ‘BUY’ rating with revised TP of Rs 1,150/ share, valuing both the hospital segment and diagnostic segment at 30x EV/EBITDA on FY28E.
