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ICICI Securities Report
Fortis Healthare Ltd. continues to demonstrate improving hospital-level profitability, stable average revenue per occupied bed growth and disciplined expansion. The brokerage expects sustained revenue momentum led by new bed additions, rising contribution from high-end specialties and operating leverage across diagnostics to support healthy earnings growth over the medium term.
ICICI Securities expects a 26.1% Ebitda CAGR over FY25–28E driven by a revenue CAGR of 19.2%. Ebitda margin is likely to rise to ~24% over the next couple of years backed by improvement in ARPOB, surge in occupancy, divestment of loss-making hospitals and healthy growth in Agilus Diagnostics.
The stock currently trades at EV/Ebitda of 26.2x FY27E and 21.2x FY28E.
ICIC Securities upgrades rating to Buy (earlier Hold) with a revised target price of Rs 1,050 (earlier Rs 970), based on FY28E SoTP-based valuation, valuing hospitals/diagnostics business at 25x/23x FY28E EV/Ebitda (earlier 28x/27x FY27E EV/Ebitda).
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