Analyst Concall
Fortis Health retains 25% FY27 margin aim despite ESOP cost
This story was originally published at 14:40 IST on 7 August 2026
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--Fotis Health: Q1 occupancy affected due to renovation at Bangalore unit
--Fortis Health: Expect diagnostic services ops to see growth in coming qtrs
--Fortis Health: Equipment at Manesar will be ready by end of 2026
--Fortis Health: Planning 3 cancer hospitals in Faridabad, Amritsar, Jaipur
--Fortis Health: Facing delay in payments from govt, insurance cos
--Fortis Health:Retaining 25% EBITDA margin target for FY27 despite ESOP cost
--Fortis Health: To add 400 beds across hospitals in next 3 qtrs of FY27
--Fortis Health: To give ESOPs to doctors across network, not just Delhi NCR
--Fortis Health: ESOP charge will be higher in FY27, to decline post FY27
--Fortis Health: ESOPs for doctors to help make them partner in growth
--Fortis Health: Hospitals bed capacity expansion going on as planned
--CONTEXT: Comments by Fortis Health mgmt in post-earnings analyst concall
--Fortis Health: Net debt up on year due to acquisitions
--Fortis Health: Net debt at INR 22.33 bln on Jun 30
--Fortis Health: Diagnostic ops revenue growth seen at 12-13% next five yrs
--Fortis Health: Diagnostic ops EBITDA margin seen at 24-25% next 5 years
By Narayana Krishna and Meera Nair
HYDERABAD/MUMBAI – Fortis Healthcare Ltd. is retaining its earnings before interest, tax, depreciation, and amortisation margin guidance for 2026-27 (Apr-Mar) at 25%, though there is an additional expenditure due to its newly launched employee stock options scheme for doctors and some select staff, the company said in a post-earnings analysts conference call.
For the June quarter, Fortis Health reported its consolidated EBITDA margin at 22.3% against 22.6% a year ago.
Fortis Health said the ESOPs scheme is being rolled out to make doctors and other important staff growth as partners and the scheme is not limited to NCR Delhi hospitals, but across its network hospitals. The hospital chain has rolled out its ESOPs scheme from Apr. 23. The company said ESOPs cost will be higher in FY27, but it will decline in subsequent years.
For the June quarter, the company's consolidated net profit rose 2.4% on year, and was almost flat sequentially, to INR 2.66 billion. This was lower than the Street's estimates of INR 2.85 billion. Significantly, higher expenses during the quarter dragged down the company's profitability.
The company's top line rose 17.5% on year and 7.6% on quarter to INR 25.45 billion. The company has maintained above 17% consolidated revenue growth for four consecutive quarters.
Responding to a question on ESOPs, Fortis Healthcare Managing Director and Chief Executive Officer, Ashutosh Raghuvanshi, said the scheme was designed after detailed deliberations, and it is not entirely aimed at stopping poaching of talent.
"As far as the poaching activity is concerned, that keeps on happening periodically. We are not overly concerned about that," Raghuvanshi said.
"We believe that our brand attracts the best possible clinicians because we provide an environment with good clinical infrastructure and an environment to function clinically independently. So, we are not overly concerned about that, but the idea was that the doctors participate in growth of the organisation and their interests and the company's interests are aligned. All those things, they become partners. So, that was the philosophy," he said.
Fortis Health said the June quarter hospital occupancy was impacted by renovation works undertaken at its Bengaluru hospital. The company reported the occupancy for the June quarter at 69%, unchanged on year.
Fortis Health said its bed capacity expansion plans were progressing as per the plan. The company is planning to add 400 new beds during the next three quarters of FY27. The company added 100 new beds across three existing hospitals. The company is also planning three cancer hospitals--one each at Faridabad, Amritsar, and Jaipur. The upcoming cancer hospital at Manesar facility is in progress and the equipment at the unit will be ready by end of 2026, the company said. The company said there is delay in payments from various governments and some of the third party agencies operating on behalf of insurance companies, effecting the cash flows.
For the June quarter, Fortis Health reported a 19% on-year growth in its hospitals business at INR 21.9 billion. Fortis Health is expecting its diagnostic services business to turn around in coming years as the new management is working on it. The company is expecting its diagnostic services business revenue growth at 12-13% in next five years while this segment EBITDA margin is seen at 24-25% range.
For June quarter, diagnostics business reported a revenue of INR 4.07 billion, up 10.2% on year, against INR 3.69 billion a year ago.
The company has a net debt of INR 22.33 billion as of Jun. 30, compared to INR 18.69 billion a year ago. The rise in the debt primarily due to the acquisitions done last year, the company said.
At 1316 IST, shares of Fortis Healthcare were trading at INR 930.70 on the National Stock Exchange, up 1.14% from its previous close. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj and Akul Nishant Akhoury
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