Healthcare stock to BUY now for an upside of more than 25%; Check the details

Shares of Fortis Healthcare Ltd. closed at the price of ₹  287.30, up 0.37% on Friday’s trading session as compared to the previous closing price of ₹  286.50.

Fortis Healthcare Ltd. is a leading integrated healthcare service provider in India engaged in running a chain of hospitals and healthcare centres. The company manages 27 healthcare facilities across India and has a presence in the United Arab Emirates (UAE), Nepal, & Sri Lanka.

Having a positive outlook for the company, ICICI Securities gave a “buy” tag to the company with a target price of Rs 360, indicating an upside of 25.3 per cent as compared to the current price levels. 

The rationale behind giving such a recommendation pertains to the company’s strategies to expand 1300-1500 beds in its hospitals, and analysts expect revenue and EBITDA CAGRs of 13.5% and 17.4% over FY23-FY25E.

In Q4FY23, the company’s profit after tax (PAT) jumped 70% to ₹  136 crores as against ₹  80 crores in Q4FY22. Revenue stood at ₹  1,642 crore, up by 30% from ₹  1,378 crore in Q4 FY22.

On a YoY comparison of the metrics, the revenues significantly improved from ₹ 5,717 crores during FY 21-22 to ₹  6,297 crores in FY 22-23. The PAT numbers have shifted downwards within the timeframe mentioned, from ₹ 765 crores to 611 crores. 

During FY 22-23, the fundamental profitability indicators showed a return on equity (ROE), of 8.12 per cent, and a return on capital employed (ROCE), of 7.69 per cent, while the debt-equity ratio at 0.13 per cent.

In the past year, the company’s share price rose from ₹ 234.70 to the current level, giving returns of 20.64 per cent. 

According to the latest data pertaining to the shareholding pattern, the promoters hold a  31.17 per cent stake, and foreign institutional investors (FIIs) hold a 31.22 per cent stake in the company for FY 22-23.

Written by Omkar C