This healthcare stock may jump 27% as JPMorgan, UBS, Citi stay positive— Do you own?

Healthcare Stock: Brokerages maintained a bullish view on Fortis Healthcare after its December quarter results, citing strong operating performance and growth visibility. Global brokerages including JPMorgan, UBS, and Citi maintained ‘Buy’ or positive ratings on the stock, with target prices between Rs 1,120 and Rs 1,150. This implies a potential upside of up to 27 per cent from current levels.

The positive outlook comes despite the company reporting a year-on-year decline in net profit during the quarter.

Profit falls due to one-time exceptional loss

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Fortis Healthcare reported a consolidated profit after tax of Rs 197 crore in the October–December quarter. This was down 22 per cent from Rs 254 crore reported in the same period last year.

The decline was mainly due to an exceptional loss of Rs 55.2 crore related to the one-time impact of new labour codes. The company also reported a reversal of impairment of Rs 9.4 crore in an associate company. The net exceptional impact stood at Rs 45.9 crore.

Revenue grows on strong hospital demand

The company reported strong revenue growth during the quarter. Consolidated revenue rose to Rs 2,265 crore, compared with Rs 1,928 crore a year ago.

Fortis Healthcare said its hospital business saw healthy growth across key specialties. Revenue from renal sciences grew 27 per cent, while orthopedics revenue increased 20 per cent year-on-year.

Managing director and CEO Ashutosh Raghuvanshi said the company continues to see strong demand across its hospital network. He added that the company’s acquisition in Bengaluru will strengthen its presence in the market. Fortis currently operates around 900 beds across seven facilities in Bengaluru, with potential to expand to over 1,500 beds.

Brokerages highlight strong operating performance and expansion

JPMorgan maintained an ‘Overweight’ rating with a target price of Rs 1,150. The brokerage said hospital revenue grew 19 per cent year-on-year and EBITDA rose 29 per cent due to higher occupancy and improved margins. It also highlighted strong margin growth in the diagnostics segment.

UBS maintained a ‘Buy’ rating with a target price of Rs 1,150. It said the company delivered healthy revenue and EBITDA growth and expects further expansion supported by capacity additions and possible equity infusion by parent IHH Healthcare.

Citi also maintained a ‘Buy’ rating with a target price of Rs 1,120. The brokerage said existing hospitals are seeing strong growth and expansion at key facilities is expected to support margins and earnings.

Fortis Healthcare share price ends lower

Fortis Healthcare share price ended at Rs 904 on the NSE, down 1.28 per cent. The stock opened at Rs 921.90 and touched an intraday high of Rs 930 and a low of Rs 902.65.

The company has a market capitalisation of Rs 68,250 crore. The stock remains below its 52-week high of Rs 1,104.30 but has recovered sharply from its 52-week low of Rs 587.10.