ICICI Securities has issued a buy rating on Fortis Healthcare with a target price of ₹1,075 in its research report dated August 09, 2026. According to the brokerage's analysis, the stock recommendation comes despite some operational challenges in the company's recent quarterly performance.
The company delivered a healthy Q1FY27 result with operating performance broadly meeting expectations, as reported by ICICI Securities. However, the quarter was impacted by ESOP costs of ₹310 million and overheads that affected new hospital operations by 50-60 basis points. These factors contributed to a 200 basis points decline in hospital margins year-on-year, primarily due to the integration costs at newly acquired facilities.
For FY27, Fortis Healthcare has outlined plans to add 500 beds representing a 10% increase in bed capacity, including 200 beds at its flagship FMRI hospital. As reported by ICICI Securities, occupancy improvements at the BG Road, Manesar and Noida hospitals are expected to drive profitable growth ahead. The company's diagnostics segment is showing signs of recovery with margins improving by 120 basis points year-on-year.
ICICI Securities has lowered FY27/28E EBITDA estimates by 6%/4% respectively to account for the ESOP costs impact. The brokerage has upgraded the stock to buy while cutting the target price to ₹1,075, valuing the hospitals and diagnostics business at 27x/24x FY28E EV/EBITDA respectively. With a new CEO taking charge, the diagnostics segment is expected to accelerate growth in the coming period.
