ICICI Securities is bullish on Fortis Healthcare has recommended buy rating on the stock with a target price of Rs 153 in its research report dated June 18, 2020.
ICICI Securities research report on Fortis Healthcare
Fortis Healthcare (FHL) reported weak Q4FY20 performance as it was impacted by lockdown in Mar’20. We expect the performance to remain muted in near term, however, business is recovering on monthly basis from the low in April and normalisation is likely to happen in H2FY21. Revenue declined 6.0% YoY to Rs11.1bn with hospitals declining 0.6% and SRL (diagnostics) dropping 8.0%. Focus on cost control helped in cushioned the impact on margin. EBITDA margin improved 160bps YoY but declined 210bps QoQ. Company has shown material operational improvement in terms of occupancy and ARPOB at hospitals with EBITDA margin expansion in hospitals and diagnostics led by cost rationalisation and operating leverage.
Outlook
Management has taken various steps on personnel cost front to reduce cost burden further. Maintain BUY.
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