Fortis Health. Q1 FY27 Results (NSE: FORTIS)
Signal: Steady quarter
The read
The growth engine is intact—consolidated revenue reached ₹2545.03 crore, +17.5% YoY, with hospital revenue up 19.0% on 16.7% higher occupied beds—but profitability has inflected less favorably: reported operating EBITDA margin declined to 22.3% excluding ESOP from 22.6%, while PAT rose only 2.3% to ₹266.39 crore; like-for-like hospital margin remained around 22%, making expansion execution and ESOP normalization the key trajectory watchpoints.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,545.03 Cr | 17.5% | 7.6% |
| EBIT | ₹429.71 Cr | N/A | |
| Net profit | ₹266.39 Cr | 2.3% | |
| EPS | ₹3.53 | N/A | |
| EBIT margin | 21.7% |
P&L walk
Revenue was ₹2545.03 crore, +17.5% YoY and +7.6% QoQ, led by hospitals at ₹2187 crore, +19.0% YoY; EBITDA was ₹551.59 crore and EBIT ₹429.71 crore, while PAT was ₹266.39 crore, +2.3% YoY, showing limited bottom-line conversion despite strong top-line growth.
Segments
Hospitals drove the group, with revenue of ₹2187 crore, +19.0% YoY, and operating EBITDA of ₹471 crore, +15.9%; diagnostics grew more slowly at ₹407 crore, +10.2%, although its margin improved to 23.9% from 23.0%.
Key positives
- Hospital revenue was ₹2187 crore, +19.0% YoY, supported by 16.7% growth in occupied beds and ARPOB rising from ₹2.64 crore p.a. to ₹2.71 crore p.a.
- Diagnostics revenue grew 10.2% YoY to ₹407 crore, while diagnostics EBITDA margin improved to 23.9% from 23.0%.
- The company signed an O&M agreement for a 300-bed greenfield multispecialty hospital in Cuttack and plans approximately 1800 additional beds over the next 4 to 5 years.
- Revenue growth of 17.5% YoY exceeded PAT growth of 2.3%, but the hospital business maintained approximately 22% like-for-like EBITDA margin excluding the impact of recent facilities.
Key concerns
- Consolidated operating EBITDA margin declined to 22.3% from 22.6% YoY excluding ESOP, while reported EBITDA margin including approximately ₹31 crore of ESOP expense was 21.1%.
- PAT increased only 2.3% YoY to ₹266.39 crore against 17.5% revenue growth, indicating weak bottom-line conversion in the quarter.
- Net debt rose to ₹2233 crore and net debt/EBITDA increased to 1.01x from 0.92x, adding balance-sheet sensitivity as acquisitions and brownfield expansion continue.
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