Fortis Healthcare (FORTIS) Q2 24/25 earnings summary

Executive summary

• Consolidated revenue for Q2 FY25 grew 12.3% year-over-year to INR 1,988 crore, with H1 FY25 revenue at INR 3,847 crore, driven by strong hospital and diagnostics performance.

• Q2 FY25 profit after tax before exceptional items increased 40.3% to INR 253 crore; H1 FY25 PAT was INR 426 crore, up 40.9% year-over-year.

• Hospital business revenue increased 13.9% to INR 1,655 crore, with occupancy at 72% and ARPOB up 7.6%.

• Diagnostics business revenue rose to INR 372.5 crore, with operating EBITDA margin improving to 21.5%.

• Significant clinical milestones achieved, including advanced surgeries, new technology launches, and the opening of the Manesar facility.

Financial highlights

• Q2 FY25 consolidated operating EBITDA was INR 435 crore (21.9% margin), up 31.9% year-over-year.

• Net debt to EBITDA improved to 0.16x as of September 30, 2024, from 0.29x a year earlier; net debt at INR 281 crore.

• Hospital occupancy rose to 72% from 69% year-over-year, with occupied beds up 5.8% to 2,939.

• ARPOB increased 7.6% to INR 2.37 crore per annum.

• Q2 FY25 exceptional loss of INR 59.8 crore, mainly due to impairment in an associate company.

Outlook and guidance

• Brownfield expansions in Faridabad, Noida, FMRI, and Manesar are progressing, with major benefits and 210 additional beds expected in H2 FY25 and H1 FY26.

• Hospital business margin guidance of 200 basis points expansion for the year is maintained, factoring in initial losses from new facilities.

• Diagnostic business expected to reach 25-26% EBITDA margin by FY27-28, with double-digit revenue growth anticipated post-FY25.

• Management expects no material additional impact from ongoing regulatory investigations, with all known financial impacts already provided for.