Fortis Healthcare (FORH IN) – Q2FY27 Result Update – Margin caution for H2 – BUY
Published on 07 Nov 2026
Fortis Healthcare (FORH) reported EBITDA growth of 19% 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 FY28E and FY29E EBITDA ex ESOP broadly remain unchanged. We expect FORH to clock 19% EBITDA CAGR ex ESOP over FY26-28E. At CMP, the stock is trading at 19x EV/EBITDA on Sept 2028E, adjusted for Agilus stake and ESOP. Maintain ‘BUY’ rating with revised TP of INR 950/ share; valuing at 23x EV/EBITDA for hospital segment on Sept2028E.
