FORTIS - Fortis Health.

📊 NSE: FORTIS 🏢 Healthcare 📅 Last Updated: 12/13/2025 22:09

💰 Financial Performance

Revenue Growth by Segment

Hospital business revenue grew 19.3% YoY to INR 1,974 Cr in Q2 FY26, while the Diagnostics business (Agilus) grew 7.3% YoY to INR 400 Cr. For H1 FY26, Hospital revenue increased 19% to INR 3,812 Cr and Diagnostics grew 7.3% to INR 768 Cr.

Geographic Revenue Split

Pan-India presence with 27 hospitals. Key facilities in Noida, Faridabad, and FEHI (Fortis Escorts Heart Institute) registered revenue growth in excess of 20% YoY in Q2 FY26. Top 10 facilities contribute 73% to hospital revenues with a 20% operating EBITDA margin.

Profitability Margins

Consolidated PAT for Q2 FY26 was INR 329 Cr, up 70.3% YoY. Net profit margin stood at approximately 14.1%. Hospital business operating margins improved 250 bps to 22.5% in H1 FY26 compared to 20% in H1 FY25.

EBITDA Margin

Consolidated Operating EBITDA margin reached 23.9% in Q2 FY26 vs 21.9% in Q2 FY25, a 200 bps improvement. Diagnostics business reported a 26.1% operating EBITDA margin in Q2 FY26, up from 21.5% YoY.

Capital Expenditure

The company plans to incur capital expenditure of INR 800-1,000 Cr per annum over the next couple of years to fund brownfield expansions and medical equipment upgrades.

Credit Rating & Borrowing

Maintains a strong financial risk profile with a net debt-to-EBITDA ratio of 0.96x as of September 30, 2025, compared to 0.16x in 2024, following debt raised for the Agilus stake acquisition.

⚙️ Operational Drivers

Raw Materials

Medical consumables and pharmacy supplies represent the primary operational costs, though specific percentage of total cost is not disclosed. Rebranding costs for Agilus and Fortis were significant one-off expenses in FY25.

Capacity Expansion

Current network includes 27 hospitals. Planned addition of 1,200-1,500 beds over the medium term. Recent additions include Shrimann Superspecialty (228 beds) and a 15-year lease for a 200-bed facility in Greater Noida with expansion potential to 250 beds.

Raw Material Costs

Not disclosed as a specific percentage of revenue; however, hospital operating EBITDA margins of 22.9% suggest a well-managed cost structure despite inflationary pressures in medical supplies.

Manufacturing Efficiency

Occupancy for Q2 FY26 stood at 71% versus 72% in Q2 FY25. ARPOB (Average Revenue Per Occupied Bed) improved 5.8% YoY to INR 2.51 Cr per annum.

Logistics & Distribution

Diagnostics business operates over 410 labs and 4,330 customer touchpoints as of September 30, 2025, to ensure wide retail reach.

📈 Strategic Growth

Expected Growth Rate

17%

Growth Strategy

Growth will be driven by adding 1,200-1,500 beds via brownfield expansion, increasing ARPOB through a better surgical mix (currently 58%), and scaling the diagnostics business. The company also consolidated its stake in Agilus Diagnostics to 89.20% and acquired the 'Fortis' brand for INR 200 Cr to secure long-term brand usage.

Products & Services

Healthcare delivery services including complex surgeries (oncology, cardiac, neurosciences), outpatient consultations, and diagnostic pathology/radiology tests.

Brand Portfolio

Fortis, Agilus Diagnostics (formerly SRL Diagnostics).

New Products/Services

Expansion into digital healthcare with digital channels (website/app) now contributing 29.5% to hospital revenues, growing 20.4% YoY.

Market Expansion

Expansion in Punjab via Shrimann Hospital and Greater Noida. Evaluating integration of Gleneagles portfolio in Hyderabad and Chennai to enter new geographies.

Market Share & Ranking

Among India's leading healthcare delivery companies; Agilus is a leading player in the diagnostics segment with 410+ labs.

Strategic Alliances

Consolidated 89.20% stake in Agilus by buying out PE investors (NJBIF, Resurgence, and IFC). 15-year lease agreement with RR Lifesciences for Greater Noida hospital.

🌍 External Factors

Industry Trends

The industry is shifting toward digital patient acquisition (29.5% of Fortis revenue) and consolidation of diagnostic players. Fortis is positioning itself by expanding brownfield capacity to meet rising demand for specialty care (oncology, neurosciences).

Competitive Landscape

Competes with other major hospital chains like Apollo and Max Healthcare, as well as regional diagnostic labs.

Competitive Moat

Moat is built on a pan-India network of 27 hospitals and a massive diagnostic footprint (4,330 touchpoints). Sustainability is supported by the acquisition of the 'Fortis' brand and high clinical talent onboarding in oncology and cardiac sciences.

Macro Economic Sensitivity

Sensitive to healthcare spending trends and insurance penetration. Regulatory caps on cash transactions above INR 2 lakh impact high-value surgical billing.

Consumer Behavior

Increasing preference for digital booking and preventive health checkups; Agilus preventive portfolio now contributes 13% to its revenue.

Geopolitical Risks

Resumption of international patient revenue is a key driver, which is sensitive to global travel stability and medical tourism policies.

⚖️ Regulatory & Governance

Industry Regulations

Subject to National Pharmaceutical Pricing Authority (NPPA) price caps on medical devices and clinical establishment acts across different states.

Taxation Policy Impact

Tax expense for Q2 FY26 was INR 96.6 Cr on a PBT of INR 425.4 Cr, representing an effective tax rate of approximately 22.7%.

Legal Contingencies

Contingent liabilities of approximately INR 2,622 Cr as of March 31, 2024, including income tax matters and medical negligence. Ongoing Supreme Court-directed investigation by the Delhi High Court into the RHT asset purchase and potential forensic audit.

⚠️ Risk Analysis

Key Uncertainties

Outcome of the Hon’ble Supreme Court/High Court litigation regarding RHT assets and the potential for a forensic audit could impact management focus and financial liability.

Geographic Concentration Risk

Significant revenue concentration in North India (Noida, Faridabad, Shalimar Bagh), though the network is pan-India.

Third Party Dependencies

Dependency on medical specialists and clinical talent; the company recently onboarded specialists in oncology and neurosciences to mitigate talent risk.