Citi has initiated coverage on Fortis Healthcare with a buy rating and a target price of ₹1,120 per share, citing strong medium-term earnings visibility driven by capacity expansion and margin improvement.
The brokerage’s positive stance is anchored in its expectation of a 23% EBITDA CAGR in the hospitals business over FY26–28, supported by a steady ramp-up of new bed capacity across Fortis’ network. Citi believes the incremental capacity addition, combined with improving utilisation levels, should meaningfully enhance operating leverage over the next few years.
Citi also highlighted margin expansion in the existing hospital network as a key driver, supported by better case mix, operating efficiencies and disciplined cost control. The brokerage noted that Fortis has demonstrated a solid execution track record, particularly in scaling operations without materially diluting profitability.
In addition, Citi expects return on capital employed (RoCE) to improve steadily, aided by rising profitability and more efficient capital deployment. The improving RoCE profile is seen as supportive of valuation upside, especially as the hospitals business moves into a higher growth phase.
Overall, Citi believes Fortis Healthcare offers a compelling combination of earnings visibility, operational execution and improving capital efficiency, which underpins its buy initiation.
Disclaimer: The views and recommendations above are those of Citi. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.