Broker's call: Fortis Healthcare (Buy)

| Updated on March 30, 2020

ICICI Securities

Fortis Healthcare (Buy)

CMP: ₹126.9

Target: ₹174

Fortis Healthcare is an integrated healthcare delivery service provider. The company is engaged in establishing, maintaining, operating, running, managing or administering hospitals, medicare, healthcare, diagnostic, health aids and research centers. The company operates through the clinical establishments division and the medical services division.

Fortis Healthcare (FHL) hosted a conference call to update on impact due to Covid-19 on the company’s business. The company has started witnessing significant decline in inpatient volumes by 35-40 per cent and in outpatients by 60-70 per cent.

The overall occupancy level is down to about 43 per cent versus 68 per cent in Q3FY20. On the other hand, SRL (diagnostics) business has also been hit by about 60 per cent in past few days post lock-down and only limited home visit business is contributing. The near term outlook looks muted in both the hospitals and diagnostics businesses but we expect a speedy recovery once the situation stabilises. Company has shown consistent operational improvement over the past few quarters and we expect this trend to continue in the post COVID-19 era. Maintain ‘buy’.

Published on March 31, 2020

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