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    Fortis Health.

    FORTIS
    Healthcare·7 Aug 2025
    Management Summary

    Fortis Healthcare delivered a strong Q1 FY26 performance, marked by robust revenue and EBITDA growth across both hospital and diagnostics segments. Strategic acquisitions and O&M agreements expanded the company's operational footprint, while internal initiatives like improved case mix and digital adoption drove profitability. The quarter saw an increase in net debt due to funding these growth initiatives.

    Highlights

    7

    • Consolidated top line grew 16.6% YoY to ₹2,167 crores in Q1 FY26.

    • Consolidated operating EBITDA increased 43.2% YoY to ₹491 crores, with margin expanding to 22.6% from 18.4% in Q1 FY25.

    • Consolidated PAT before exceptional items increased 46.2% YoY to ₹254 crores.

    • Hospital business ARPOB increased 10.2%, driven by improved specialty mix (oncology up 28% YoY) and increased complex cases (75% YoY in robotic surgeries).

    • Hospital occupancy improved to 69% in Q1 FY26 from 67% in Q1 FY25, with occupied beds increasing 7.8% to 2,928.

    • Diagnostics business reported a strong EBITDA margin of 23% in Q1 FY26, up from 16.1% in Q1 FY25, with test volumes growing to 10.1 million.

    • Successfully acquired Shrimann Superspecialty Hospital adding 228 beds and entered an O&M agreement with Gleneagles India for 700 beds, expanding operational footprint to 33 facilities and over 5,700 beds.

    Concerns

    1

    • Net debt increased to ₹1,869 crores with a net debt-to-EBITDA ratio of 0.92x as of June 30, 2025, up from 0.22x on June 30, 2024, primarily due to funding acquisitions.

    Key financials

    Single quarter

    06 metrics
    1. 01Consolidated Revenue₹2,167 Cr+16.6%YoY
    2. 02Consolidated Operating EBITDA₹491 Cr+43.2%YoY
    3. 03Consolidated EBITDA Margin22.6%
    4. 04Consolidated PAT (pre-exceptional)₹254 Cr+46.2%YoY
    5. 05Net Debt₹1,869 Cr

    Segment breakdown

    • Hospital Business₹406 Cr82.7%
    • Diagnostics Business₹84.7 Cr17.3%
    Donut· Share of Operating EBITDA

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Net ₹1,869 crores · 0.9x EBITDA

    M&A

    Shrimann Superspecialty Hospital

    acquisition · closed

    M&A

    Gleneagles India

    joint venture · signed

    Guidance & targets

    8
    CategoryTargetPriority
    Capacity
    Total Bed Additions
    900 beds
    		High
    Capacity
    Operationalized Bed Additions
    50% of 900 beds
    		High
    Capacity
    Robotic Machines Addition
    4
    		High
    Margin
    Hospital Operating EBITDA Margin Improvement
    2%
    		High
    Margin
    Diagnostics EBITDA Margin
    22-23%
    		High
    Revenue
    Diagnostics Revenue Growth
    high single digit to about 10%
    		Medium
    Revenue
    Diagnostics Revenue Growth
    early double-digit numbers
    		Medium
    ARPOB
    ARPOB Growth
    5-6%
    		Medium

    New Hospital Bed Operationalization

    Next quarter / Current financial year
    Current228 beds added (Shrimann), 900 beds planned for FY26, 50% to be operationalized in current FY.
    TargetProgress on operationalizing ~450 beds (50% of 900)

    Why it matters

    Key driver for future hospital revenue and capacity utilization.

    We are on track to add capacity of approximately 900 beds in the current financial year, including those at our recently acquired hospital in Jalandhar. We expect to operationalize approximately 50% of these beds in the current financial year.

    How to verify

    key_financials.segment_breakdown[name='Hospital Business'].metrics[label='Occupied Beds']

    Risks & concerns

    2
    RiskSeverity

    Increased Net Debt due to Acquisitions

    Net debt increased to ₹1,869 crores (0.92x Net Debt/EBITDA) from ₹0.22x YoY due to funding the 31.5% PE stake in Agilus and Fortis brand acquisition. — Management acknowledged

    medium

    Low Margins of Gleneagles India Facilities

    Analyst raised concern about the low margins of IHH's India business (Gleneagles) and potential impact on Fortis, despite management highlighting synergies and future options. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Yes, so Jaipur is operating around 65% occupancy now, and it has revived. Last year, it was having some challenges. We have discussed in the earlier call. So it has come out from that and it is now on the path of recovery. It has already achieved around double-digit EBITDA margin also. So that is on Jaipur. As regard FMRI, it is doing quite well. FMRI EBITDA -- sorry, I'm talking EBITDA, the 20 beds we have added, and we're able to fill them quickly. And the occupancy level of FMRI is 80% level. BG Road, although the occupancy side, it is slightly struggling. It is at around 56%, 57%, but they're able to do some quality work. And as a result of that, the EBITDA margin are quite healthy.”

    Provides granular detail on the performance of key hospitals, indicating recovery in some and sustained strength in others, which contributes to overall hospital segment growth.

    asked by Amey Chalke

    2 min read7 chapters

    Detailed Narrative

    01

    Q1 FY26 Consolidated Financial Performance

    Fortis Healthcare reported a strong consolidated top line of ₹2,167 crores in Q1 FY26, marking a 16.6% year-on-year growth. Operating EBITDA surged by 43.2% to ₹491 crores, leading to a significant margin expansion to 22.6% from 18.4% in Q1 FY25. Profit After Tax (before exceptional item📎s) also saw a robust increase of 46.2% to ₹254 crores, reflecting healthy operational leverage.

    02

    Hospital Business Highlights

    The hospital segment, contributing 85% of consolidated revenue, grew 18.6% year-on-year to ₹1,838 crores. Operating EBITDA for hospitals stood at ₹406 crores, with a margin of 22.1% compared to 18.5% in Q1 FY25. ARPOB increased by 10.2% to ₹2.65 crores per annum, driven by a 28% growth in oncology and a 75% increase in robotic surgeries. Occupancy improved to 69% from 67% year-on-year, with occupied beds reaching 2,928.

    03

    Diagnostics Business Performance (Agilus)

    The diagnostics business recorded a net revenue of ₹329 crores, a 6.3% year-on-year growth. Gross revenue was ₹369 crores, up 7.4% year-on-year. Operating EBITDA margin significantly improved to 23% in Q1 FY26 from 16.1% in Q1 FY25, with tests conducted increasing to 10.1 million. The preventive portfolio grew 8.4% and contributed 12% to revenues, while the genomics portfolio grew 17%.

    04

    Strategic Expansion and Partnerships

    Fortis expanded its network through the acquisition of Shrimann Superspecialty Hospital in Jalandhar, adding 228 beds and the potential for 225 more. Additionally, the company entered an Operation and Maintenance (O&M) services agreement with Gleneagles India in July 2025, managing approximately 700 beds across 5 hospitals and a clinic. This agreement entitles Fortis to a monthly service fee of 3% of the net revenue, expanding its operational footprint to 33 facilities and over 5,700 beds across 11 states.

    05

    Capacity and Infrastructure Development

    The company is on track to add approximately 900 beds in the current financial year, with 50% expected to be operationalized within the year. This includes 250 beds for FMRI, 150 for Noida, 50 for Faridabad, and 200 for Manesar. Fortis also augmented its medical infrastructure by installing second Da Vinci robots at Mohali and BG Road, bringing the total to 15 robotic machines across the network, with plans to add 4 more this year.

    06

    Digital Initiatives and Talent Augmentation

    Digital initiatives remain a core strategy, with inpatient modules of EMR successfully implemented at Fortis FEHI. Revenue from digital channels (website, mobile app, campaigns) grew 16.8% year-on-year, contributing 29.5% to overall hospital revenues. The company also strengthened its medical talent by onboarding specialists in oncology, cardiac sciences, obstetrics, gynaecology, and renal sciences.

    07

    Capital Structure and Debt Profile

    As of June 30, 2025, the company's net debt stood at ₹1,869 crores, resulting in a net debt-to-EBITDA ratio of 0.92x. This represents an increase from 0.22x on June 30, 2024, primarily due to funds raised to finance the acquisition of a 31.5% PE stake in Agilus Diagnostics and the acquisition of the Fortis brand and trademarks.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.