Fortis Healthcare’s Q1 FY2027 revenue surged 17.5% driven by increased patient volumes and strategic investments, yet profit margins came under strain from expansion costs and ESOP expenses, signalling complex growth dynamics.
Fortis Healthcare said its first-quarter performance for fiscal 2027 was driven by stronger patient volumes and higher revenue across its hospital network, even as profitability came under pressure from expansion and employee stock costs. The company reported consolidated revenue of ₹2,545 crore for the quarter ended June 30, up 17.5% from a year earlier, according to its earnings update. Hospital revenue rose 19%, while the diagnostics arm improved its operating margin to 23.9% from 23.0% a year earlier.
That top-line momentum did not fully translate into operating leverage. Fortis said consolidated operating EBITDA margin eased to 22.3% from 22.6% a year earlier, with the hospital business margin slipping to 21.5% from 22.1%. Management attributed part of the pressure to recent acquisitions and ESOP-related expenses. Net debt climbed to ₹2,233 crore from ₹1,869 crore a year earlier, taking the net debt-to-EBITDA ratio to 1.01 times.
Within the portfolio, several speciality lines continued to outperform. Renal sciences, neurosciences and orthopaedics posted revenue growth of 28%, 27% and 23% respectively, while international revenue rose 13.3% and accounted for 8% of total sales. Oncology was the weak spot, growing only about 5% after a government-mandated 30% discount on chemotherapy drugs for certain beneficiaries. Diagnostics also lagged the broader market, rising 10.2% compared with industry growth of about 15%, though management said the business was stabilising after earlier rebranding and network changes.
The company is pushing ahead with capacity additions and larger specialty investments. It added 100 beds in the quarter and expects to commission another 400 over the rest of the year, including 200 at its FMRI facility once occupancy approval is secured. Chief financial officer Vivek Goyal said the group is targeting a 25% EBITDA margin after ESOP costs by fiscal 2028, while chief executive Ashutosh Raghuvanshi said the scheme was designed to align doctors with the company’s performance rather than respond to competitive poaching. Fortis also confirmed board approval for a proton therapy facility at its Gurgaon hospital, with capital spending expected at about ₹252 crore this financial year. At Manesar and Greater Noida, management expects margins to improve as the sites ramp up, while five Gleneagles hospitals under a management contract are still working towards full stabilisation.
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