Fortis, Max Healthcare Gets A 'Buy' As Axis Securities Initiates Coverage, Sees Upto 20% Upside

Axis Securities Report

We initiate coverage of Fortis Healthcare Ltd. with a Buy recommendation and target price of 860/share with an upside potential of 20% from current market price.

Fortis Healthcare has established itself as a leader in complex medical procedures, outperforming competitors like Max Healthcare and Medanta in cardiac surgeries, radiation therapies, and robotic surgeries, which drive substantial revenue. It is the largest provider of Oncology services in India, with oncology revenue projected to reach Rs 1,600 crore by FY27E.

Fortis also leads in the cardiac healthcare market, with sales expected to grow from Rs 1,010 crore in FY24 to Rs 1,300–1,400 crore by FY27E. The company plans to add 2,000 beds through brownfield expansion, increasing capacity by 45% and stabilizing occupancy rates at 68% with an average revenue per occupied bed of Rs 70,000 by FY27E. Its diagnostic arm, Agilus, contributes 20% of revenue, with Ebitda margins expected to improve to 20% by FY26E.

Under IHH management, Fortis has achieved significant financial growth, with PAT projected to more than double from Rs 645 crore in FY24 to Rs 1,421 crore by FY27E, supported by cost optimization, strategic divestments, and rising health insurance penetration.

We initiate coverage of Max Healthcare Ltd. with a Buy recommendation and a target price of Rs 1,315/share, implying a potential upside of 18% from the CMP.

Max Healthcare is a market leader in the Delhi-NCR and Mumbai regions, with over 2,900 beds and dominant leadership in oncology. The company plans to add 3,000 beds over the next three years, primarily through brownfield expansions.

Strong operational performance has resulted in significant Ebitda growth and improved margins, currently at 26.5%. With robust cash flows and strategic expansions, Max Healthcare is well-positioned for continued profitability and growth.

We expect revenue and Ebitda to grow by 30% and 31%, respectively, in FY25E, and by 23% and 24%, respectively, in FY26E.

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