Jefferies Upgrades Rakesh Jhunjhunwala Portfolio Stock to ‘Buy’

Jefferies upgrades its rating from hold on to buy Fortis Healthcare and has also raised its target price on the stock to 326 per share 249 First each accelerates its upgrade with increasing engagement and capacity indicating strong growth and a strong hospital outlook.

“We are confident that Fortis can deliver a jump in the number of beds and occupancy rates and an EBITDA of 17% hospitals in FY13 on healthy ARPOBs. The near-term growth prospects remain strong as over 1,000+ beds have been commissioned over the next 4 years and additions are evenly spread over the coming years. Diagnostics introduces additional upside capability that is not yet fully built into our models,” the note said.

Fortis’ diagnostic volumes remain volatile and continue to surprise positively. Lower COVID testing volumes reduced the average price per test Q1 but a 9% increase in total testing volume led to a 27.6% margin. Jefferies said it awaits steady-state testing volume as management EBITDA guidance points to slightly lower volumes than current levels, however, it believes a higher test volume basis could render its estimates higher. Is.

During the earnings call, management guided towards an increasing occupancy rate in the coming quarters. Fortis plans to add around 200 new beds by the end of this financial year and 200-300 beds every year thereafter. The people at Jefferies also expect to maintain hospital profitability as the higher occupancy operating leverage brings leverage.

As per the shareholding pattern of BSE, Indian veteran investor Rakesh Jhunjhunwala holds 4.23% stake in Fortis Healthcare Limited as of September 2021.

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