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PL Capital keeps a Buy view on Fortis Healthcare amid Delhi HC probe
The brokerage says the Delhi HC-ordered forensic audit into former promoters’ asset dissipation will not affect Fortis Healthcare’s capex, brownfield expansion, or M&A plans.
Fortis Healthcare shares rose for a second straight day on Tuesday, September 8, as Prabhudas Lilladher maintained a bullish stance on the hospital operator, according to LiveMint Markets. Despite a 66% rally over the past two years, the brokerage said it sees nearly 16% upside over the long term.
The note comes after the Delhi High Court directed the appointment of an auditor to probe alleged asset dissipation by Fortis Healthcare’s former promoters. PL Capital said the forensic audit is limited to historical shareholding changes and will not impact the company’s planned capex, brownfield expansion, or M&A activities.
PL Capital pointed to volume-led growth in Fortis Healthcare’s hospital segment over the past 15 months, with occupancy held at 68% to 69% even as operating beds increased by 17% over the year. It also cited margin improvement of 530 basis points over FY23 to FY26 to 22.2%, plus signs of recovery in diagnostics from an improving test mix that supports better realizations.
The brokerage expects Fortis Healthcare to post a 20% EBITDA compound annual growth rate, ex ESOP, over FY26 to FY28. At the time of writing, the stock was up 0.21% at ₹910.21 on BSE, and PL Capital set a target price of ₹1,050 per share, keeping a ‘Buy’ rating.