Analysts expect this Rekha Jhunjhunwala-owned stock to grow up to one-fifth in value

Rekha Rakesh Jhunjhunwala: Brokerage Nomura maintained a 'buy' rating on Fortis Healthcare and raised its long-term target price by Rs 6 to Rs 325 apiece — implying a 21 per cent upside potential from the hospital chain stock's closing price on Friday. Fortis Healthcare is a part of the portfolio of Rekha Jhunjhunwala, wife of the late legendary investor Rakesh Jhunjhunwala.

Positive on Fortis Healthcare's strong growth outlook, Nomura cited traction in the healthcare company's hospital business with scope for further improvement and its investments towards technology upgrades as the rationale behind its rating.

The brokerage, however, flagged weak growth in the company's diagnostic segment.

“We value the Hospital's business of Fortis at 15x FY24e EV/EBITDA to arrive at a target price of Rs 310 per share... We recommend a ‘buy’ rating on the stock,” said Dhara Patwa, an analyst at SMIFS.

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Fortis Healthcare shares gained by as much as Rs 8.4 or 3.1 per cent to Rs 277 apiece on BSE on Monday.

Fortis Healthcare Q3 results

Earlier this month, Fortis Healthcare reported a net profit of Rs 142 crore for the quarter ended December 2022, barely up compared with the corresponding period a year ago mainly due to lacklustre growth in income on account of a drop in COVID-related test volumes.

Fortis’ revenue from operations rose to Rs 1,560 crore in the third quarter as compared to Rs 1,467 crore in the year-ago period, it said in a regulatory filing.

While the company’s EBITDA margins stood at 18.5 per cent in the December quarter of FY23.

Rekha Jhunjhunwala Fortis Healthcare stake

At the end of the October-December period, Rekha Jhunjhunwala held 33,652,108 equity shares or a 4.5 per cent stake in Fortis Healthcare, according to exchange data.

Rekha Jhunjhunwala publicly holds 29 stocks in her portfolio with a net worth of more than Rs 26,028 crore, as of February 20, 2023, according to the stock analysis website Trendlyne.

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