Fortis Healthcare Limited is a premier integrated healthcare delivery service provider in India. The company's operations are structured around two primary verticals: hospitals and diagnostics. Its extensive network includes 36 healthcare facilities, which encompasses joint ventures and Operation & Maintenance (O&M) arrangements, spread across 12 states. This network provides a substantial capacity of over 6,000 operational beds. The diagnostics arm of the business, operating under the brand Agilus Diagnostics, is a significant contributor to the company's integrated model, with a network of 400 diagnostic labs. Fortis is supported by a large and skilled workforce, including over 7,600 doctors, more than 9,400 nurses, and a total of over 28,000 employees. The company maintains a strong commitment to quality, evidenced by its 4 JCI accredited and 33 NABH accredited/certified facilities. Its geographical footprint is robust, with a significant presence in key regions such as the National Capital Region, Karnataka, Maharashtra, and Punjab. This integrated structure allows Fortis to offer a continuum of care, from diagnosis to treatment, positioning it as a key player in the Indian healthcare sector.

Official Website: http://www.fortishealthcare.com/

• Consolidated Performance (Q3 FY26 vs Q3 FY25):

• Revenue: Grew 17.5% year-over-year (YoY) to INR 2,265 Cr.

• Operating EBITDA: Increased significantly by 34.8% YoY to INR 505 Cr.

• Profit Before Tax (PBT): Rose 21.9% YoY to INR 312 Cr (before exceptional items).

• Profit After Tax (PAT): Stood at INR 197 Cr. This figure includes a net exceptional loss of INR 45.9 Cr related to the impact of New Labour Codes. Excluding this, PAT was INR 243 Cr.

• Segment Performance (Q3 FY26 vs Q3 FY25):

• Hospital Business: Revenue grew 19.4% to INR 1,938 Cr. Operating EBITDA increased 28.9% to INR 420 Cr.

• Diagnostics Business (Agilus): Gross revenue grew 8.3% to INR 371 Cr. Operating EBITDA saw a substantial 73.5% increase to INR 86 Cr.

• Nine-Month Performance (9M FY26 vs 9M FY25):

• Consolidated Revenue: Up 17.1% YoY to INR 6,763 Cr.

• Consolidated Operating EBITDA: Increased 34.7% YoY to INR 1,553 Cr.

• Profit After Tax (after MI): Grew 31.4% to INR 776 Cr.

• Balance Sheet and Debt:

• Net Debt: Stood at INR 2,547 Cr as of December 31, 2025, a sharp increase from INR 644 Cr as of December 31, 2024.

• Leverage: Net Debt to EBITDA increased to 1.24x from 0.41x in the prior year. Net Debt to Equity rose to 0.26x from 0.07x.

• Reason for Debt Increase: The higher debt level is attributed to funds raised for acquisitions, including the PE stake in Agilus Diagnostics and the Shrimann Hospital in Jalandhar.

The company delivered strong double-digit growth in both revenue and operating profit, driven by robust performance in its core hospital segment, though this was accompanied by a significant increase in debt to fund strategic acquisitions.

• Hospital Revenue Drivers:

• The 19.4% revenue growth in the hospital business was primarily driven by a 14% increase in occupied beds compared to the previous year.

• Average Revenue Per Occupied Bed (ARPOB) increased by 4.5% YoY, from INR 2.45 Cr to INR 2.56 Cr per annum.

• Key focus specialties, including Oncology, Neurosciences, and Orthopedics, collectively grew by 19% and now contribute 61% of total hospital revenue. Renal Sciences and Orthopedics were standout performers, growing 27% and 20% respectively.

• International Business:

• Revenue from international patients grew 19% YoY to INR 156 Cr, contributing 7.7% to the hospital business revenue, maintaining its share from the previous year.

• Diagnostics Business Growth:

• The diagnostics business (Agilus) grew its revenue by 8.3% YoY.

• Test volume increased to 9.94 million tests in Q3 FY26 from 9.59 million in Q3 FY25.

• The business mix is shifting towards higher-value services, with the preventive portfolio's revenue contribution increasing from 10% to 12% and the specialised portfolio growing from 33% to 35% YoY.

Growth was broad-based, fueled by higher patient volumes in the hospital business, stable pricing power (ARPOB), and a favorable shift towards higher-margin services in the diagnostics segment.

• Inorganic Growth Strategy:

• The company is actively pursuing acquisitions to strengthen its presence in key geographic clusters.

• The acquisition of the 125-bed People Tree Hospital in Bengaluru for INR 430 Cr is a prime example. This deal includes an adjacent land parcel, providing a clear path to expand the facility to over 300 beds.

• This acquisition strengthens the company's Bengaluru cluster, increasing its capacity from approximately 900 beds to a potential of over 1,500 beds in the future.

• Brownfield Expansion:

• Management has stated it continues to progress on its brownfield expansion plans, indicating that opportunities exist to add capacity and services within its existing hospital portfolio.

Fortis is capitalizing on growth opportunities through a dual strategy of acquiring new assets in strategic markets and expanding its existing facilities to increase bed capacity and service offerings.

• Occupancy Rates:

• The overall occupancy rate for the hospital business stood at 67% in Q3 FY26, consistent with the same period last year.

• For the nine-month period (9M FY26), occupancy was stable at 69%.

• Bed Expansion Projects (Ongoing):

• Manesar Facility: 175 beds have been added as of December 2025, with the remaining capacity expected to be added in Q4 FY26, bringing the total to approximately 300 beds.

• FMRI, Gurugram: A new tower with 200 beds is expected to be operational in the first half of FY27.

• Noida: A new tower is being added in phases. ~73 beds became operational in H1 FY26, with another ~50 beds expected in Q4 FY26 and the final ~27 beds in H1 FY27.

• Recent Capacity Additions (FY26):

• Capacity has been increased through acquisitions in Yeshwanthpur (~125 beds) and Jalandhar (~191 beds), the addition of the Greater Noida hospital on lease (~200 beds), and minor expansions at Faridabad (~50 beds) and BG Road (~20 beds).

The company is maintaining stable occupancy levels while executing a clear and significant capex plan focused on both brownfield expansions at key facilities and greenfield projects to drive future growth.

• Continued Expansion:

• The primary focus is on completing the ongoing bed expansion projects at Manesar, FMRI (Gurugram), and Noida, which will add significant capacity in the high-potential National Capital Region market.

• The company plans to scale up its presence in Bengaluru to over 1,500 beds, leveraging the recent People Tree Hospital acquisition.

• Strategic Acquisitions:

• Management continues to evaluate further inorganic growth opportunities, particularly in its existing geographic clusters, to consolidate its market position.

• Diagnostics Business Improvement:

• The company expects the sustained recovery in revenue and margins for the diagnostics business to continue and progressively improve.

Future plans are centered on executing the current pipeline of capacity expansions and actively seeking strategic acquisitions, while also focusing on driving continued performance improvement in the diagnostics segment.

• Consolidated Margin Expansion:

• Operating EBITDA margin improved significantly to 22.3% in Q3 FY26, up from 19.4% in Q3 FY25.

• For the nine-month period, the margin expanded to 23.0% from 20.0% a year ago.

• Hospital Business Margins:

• Operating EBITDA margin for the hospital segment increased to 21.7% in Q3 FY26 from 20.0% in Q3 FY25.

• A majority of the business operates at high profitability. For 9M FY26, 13 facilities, contributing 76.8% of revenue, operated at an EBITDA margin greater than 20%.

• Diagnostics Business Margin Recovery:

• The Operating EBITDA margin for the diagnostics business saw a dramatic recovery, reaching 23.1% in Q3 FY26 compared to 14.4% in Q3 FY25.

• Excluding one-off rebranding costs in the prior year, the Q3 FY25 margin was 21.3%, indicating a solid underlying margin improvement in the current quarter.

The company has demonstrated strong operational leverage, leading to substantial margin expansion across its consolidated business as well as in both the hospital and diagnostics segments.

• Increased Financial Leverage:

• The company's net debt has increased nearly fourfold in one year, from INR 644 Cr to INR 2,547 Cr.

• This has resulted in a higher Net Debt to EBITDA ratio of 1.24x. While this is still a manageable level, the rapid increase in debt to fund acquisitions introduces higher financial risk and increased interest expense, which grew from INR 45.2 Cr in Q3 FY25 to INR 85.7 Cr in Q3 FY26.

The primary identifiable risk from the provided information is the increased financial leverage resulting from the company's aggressive acquisition-led growth strategy.

• Strategic Initiatives:

• Launch of 'Adayu': In November 2025, Fortis launched 'Adayu', a 36-bed specialized mental healthcare facility in Gurugram, expanding its service offerings into a crucial and underserved specialty.

• Acquisition of People Tree Hospital: The company signed a definitive agreement in December 2025 and completed the acquisition in January 2026, strengthening its market leadership in Bengaluru.

• Diagnostics Network Expansion:

• Agilus Diagnostics continued its network expansion, adding over 175 new customer touchpoints during Q3 FY26, bringing the total to 4,370.

• Clinical Excellence and Quality:

• The company continues to invest in advanced medical technology, launching an AI-powered GI Endoscopy Department in Jaipur, the Da Vinci Xi Robotic Surgical System in Manesar, and the Mako Robotic System for knee replacements in Nagarbhavi, Bengaluru.

• Fortis Hospital, Mohali, and Fortis Hospital, Gurugram, successfully secured their Joint Commission International (JCI) re-accreditations, reaffirming their commitment to global quality standards.

The company is actively pursuing strategic growth initiatives, expanding its service lines into new areas like mental health, and continuously investing in advanced medical technology to enhance clinical outcomes.