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Fortis Healthcare shares outlook by Nomura: Rating neutral and target price remains ₹1030 - check rationale
Fortis Healthcare’s share price has remained under pressure in the near term, declining 4.61% over the past week and 6.04% over the last month
Brokerage firm Nomura has retained its ‘neutral’ rating on Fortis Healthcare stock with a target price of ₹1,030 per share, saying that the rating is based on 25x FY28-29F average EBITDA.
“We believe that growth is priced in and EBITDA margin expansion faces headwind from ESOP charges. We remain conservative on the valuation multiple given insurers’ growing bargaining strength, potential cost-control regulations, wage inflation pressures for both employees and doctors, and the high capital intensity of the business,” the firm said in a note.
The brokerage firm further said that during the analyst call to provide an update on the Delhi High Court’s recent order to conduct a forensic audit, the management has stated that the audit is investigative in nature, the business operations are fully insulated, and the growth/expansion plans of Fortis are intact. Management expressed confidence that the forensic audit is unlikely to have any negative outcome.
