Stock to Buy Now for an Upside of Up to 26%; Recommended by JP Morgan, Citi, and UBS

Synopsis: Fortis Healthcare is in focus after JP Morgan, Citi and UBS maintained bullish ratings, projecting up to 26% upside driven by strong Q3 operating performance, margin expansion and steady capacity additions. Robust hospital growth, improving diagnostics margins and potential equity infusion from IHH further strengthened long-term growth visibility.

The shares of this company, which is a leading integrated healthcare service provider in India and primarily comprises hospitals, diagnostics and day care specialty facilities, had its shares in focus after the company was given positive upside along with bullish comments by firms like JP Morgan, Citi and UBS.

With the market cap of Rs 68,943 crore, the shares of Fortis Healthcare Ltd are trading at Rs 912. The shares are trading at a PE of 68.3, whereas its industry PE is at 44.3 and have given a return of 475% over the last 5 years. 

JP Morgan on Fortis 

JPMorgan sees an upside potential of 25.6% from the current level of Rs 915.6 to a target price of Rs 1,150 after a strong Q3 showing. While the top line was broadly in line, the margins exceeded estimates, with hospitals reporting 19% YoY growth in revenues and 29% YoY growth in EBITDA, led by an increase in occupied bed days and operating leverage. 

The diagnostics business also performed well, with EBITDA growing 76% YoY, led by an improvement in portfolio mix. The broker noted the seamless bed capacity addition and IHH’s plans to raise its stake above 31%, which further strengthens its belief in Fortis’ long-term growth story.

CITI on Fortis 

Citi’s target price of Rs 1,120 sees an upside potential of 22.3% from the current levels of Rs 915.6, driven by strong Q3 operating performance. The existing hospitals have reported over 14% growth, while brownfield additions in high-occupancy facilities are expected to drive margins higher. The newly acquired facilities are also settling well, with Jalandhar reporting over 25% margins and Manesar achieving breakeven. The broking also sees potential equity infusion from IHH, which may help drive further growth.

UBS on Fortis

UBS forecasts a 25.6% upside potential from the current price of Rs 915.6 to its target price of Rs 1,150, citing strong Q3 performance and continued growth momentum. The company has reported a 17.5% YoY growth in revenue, along with a 35% YoY increase in EBITDA, which is a result of its strong operating leverage. The broking house expects the company to continue its growth momentum due to capacity additions and stable occupancy levels. Equity infusion by IHH is another major catalyst for long-term value creation.

Financials

The revenue from operations for the company stood at Rs 2,265 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 1,928 crores, up by about 17 per cent YoY. However, the net profit stood at Rs 197 crore in Q3 FY26, down compared to the Rs 254 crore profit in Q3 FY25.

In Q3FY26, the specialty mix is again very well-balanced, with Cardiac (17.1%) and Other IPD (16.7%) contributing the maximum, followed closely by Oncology (15.4%) and OPD (14.0%), which is a clear indication of robust demand in the high-end tertiary care areas. Renal (7.1%), neuro (8.9%), and ortho (8.1%) are also contributing steadily, while gastro (4.8%), gynae (3.3%), and pulmonology (3.2%) are smaller but steady components of the mix. Overall, the FY26 mix suggests a very balanced revenue stream with continued robustness in the core and an improving trend in the renal and pulmonary areas.

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