Shares of Fortis Healthcare slipped up to 1.5 per cent in Thursday’s trade to a day’s low of Rs 954.25, compared with the previous close of Rs 969.35. The stock has lost over 6 per cent in the past four sessions and has declined in nine of the last 11 trading days.
Despite the recent weakness, the counter still trades 83 per cent above its 52-week low of Rs 521.05.
Even as the stock faces short-term pressure, Choice Institutional Equities has maintained its ‘Buy’ call on Fortis and raised its target price to Rs 1,140 from Rs 1,000 earlier. The revised target signals an upside potential of 19 per cent from current levels.
The brokerage’s optimism stems from what it termed a “strong beat across metrics” in Fortis’ Q2FY26 performance. Revenue rose 17.3 per cent YoY to Rs 2330 crore, while EBITDA surged 27.9 per cent YoY to Rs 560 crore. The EBITDA margin expanded by 199 bps to 23.9 per cent. Adjusted PAT grew 38.7 per cent YoY to Rs 310 crore, reflecting healthy operating leverage.
The hospital business, which accounts for 85 per cent of Fortis’ revenue, remained the key growth engine. Segment revenue climbed 19.3 per cent YoY, supported by a 5.9 per cent rise in Average Revenue Per Occupied Bed (ARPOB) to Rs 68,767 and a steady 71 per cent occupancy rate. Choice highlighted the company’s margin gains driven by a sharper focus on high-acuity specialities, with oncology and robotic surgeries seeing volume growth of 29 per cent and 66 per cent, respectively.
Its diagnostics arm, Agilus Diagnostics, also delivered a strong show. Revenue grew 6.9 per cent YoY, while EBITDA jumped 29.6 per cent, taking the division’s margin to 29.1 per cent. Agilus continues to deepen its specialised portfolio, adding 19 new tests across genomics and oncology.
Looking ahead, Choice noted that Fortis is progressing well with its cluster strategy. Management aims to lift hospital EBITDA margins to 25 per cent over the next two years, supported by brownfield expansion and the planned addition of 400–500 beds annually. The brokerage’s upgraded target is based on a Sum-of-the-Parts (SOTP) valuation, with a higher assigned multiple of 29x EV/EBITDA for the hospital segment and 25x EV/EBITDA for diagnostics, based on average FY27–28 estimates.
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