Target: ₹1,100
Current Market Price (CMP): ₹928.10
Since IHH Healthcare acquired a controlling stake in Fortis Healthcare (FORH) in FY19, the company has experienced a significant transformation, shifting from a troubled asset facing governance issues to a professionally managed hospital platform focused on execution and operational excellence. This transition has involved a thorough balance sheet cleanup, divestiture of non-core assets, and enhanced governance practices.
The results of this transformation are evident in the company’s financial performance. Fortis Healthcare’s revenue and EBITDA improved from ₹45 billion and ₹2 billion, respectively, alongside a loss of ₹1.5 billion in FY18, to projected sales, EBITDA, and PAT of ₹90 billion, ₹20.5 billion, and ₹10.8 billion over FY26E.
From FY18 to FY26, the company has notably expanded its bed capacity and enhanced its operational efficiencies, achieving a compound annual growth rate (CAGR) of 33% in EBITDA.
To determine the target price, we have performed a sum-of-the-parts (SoTP) valuation, estimating the hospital division at 30 times the expected forward EV/EBITDA over the next 12 months, and the diagnostics division at 23 times the same metric. This results in a target price of ₹1,100 per share. The EV/EBITDA multiples align with those of peers, including MAX Healthcare and Apollo Hospitals, reflecting the successful transformation efforts, a brownfield strategy for adding beds that will accelerate EBITDA breakeven, and improvements in return ratios.
We are initiating coverage on Fortis Healthcare with a Buy rating.
Published on April 24, 2026
