Brokerage Firm Prabhudas Lilladher Recommends Buying Fortis Healthcare, Sees Target Price of Rs 1120

Fortis Healthcare Reports Strong Quarter, Maintains Growth Momentum

Fortis Healthcare, a leading healthcare provider, has reported another impressive quarter with an earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs5.3bn in Q4FY26, representing a 22% year-over-year (YoY) growth. This strong performance is a testament to the company's efforts in improving hospital margins, which have increased by 530 basis points over the fiscal year 2023 to 2026 to 22.2%.

The research report by Prabhudas Lilladher highlights the scope for further improvement in hospital margins, driven by several key factors. These include the improving case and payor mix, cost rationalization initiatives, and the ramp-up of the Manesar and Greater Noida units. Additionally, the recent acquisition of People Tree Hospital, Shrimann Hospital, and the operations and maintenance (O&M) agreement with Gleneagles are expected to drive further margin expansion.

Key Performance Indicators

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Our research report also indicates that Fortis Healthcare is expected to maintain its growth momentum, with an estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) compound annual growth rate (CAGR) of 21% over the fiscal year 2026 to 2028. At the current market price (CMP), the stock is trading at 25.5x enterprise value to EBITDA (EV/EBITDA) on a fiscal year 2028 basis, adjusted for the Agilus stake. We maintain a 'BUY' rating with a revised target price of Rs1,120 per share, valuing the hospital segment at 30x EV/EBITDA on a fiscal year 2028 basis.