Fortis Health hits 52-week high with plans to buy 32% stake in subsidiary
Fortis Healthcare share price rose as much as 2.52 percent to hit a 52-week high of Rs 565.65 per share on the BSE on Monday.
Shares in Fortis Healthcare soared after the healthcare company announced it will buy private equity investors’ entire 31.52 percent stake in its wholly owned subsidiary Agilus Diagnostics, formerly known as SRL Diagnostics. The company will finance the acquisition through the issuance of NCDs, it said.
Currently, Fortis Healthcare holds a 57.68 percent stake in Agilus Diagnostics, while the remaining shares are held by International Finance Corporation (7.61 percent), NYLIM Jacob Ballas India Fund III LLC (15.86 percent) and Resurgence PE Investments Limited (8.05 percent).
These investors have exercised their ‘Put Option Right’, which obliges the company to purchase their shares at fair market value, in accordance with the shareholders’ agreement, the healthcare provider said in a stock exchange document.
To finance the acquisition, Fortis will issue listed, senior, secured non-convertible bonds (NCDs) to eligible investors, including foreign portfolio investors.
Fortis Healthcare, part of IHH Healthcare, is a healthcare services provider operating 28 health facilities, over 4,500 beds (including operations and maintenance facilities) and over 400 diagnostic centres, including joint ventures. Fortis has a presence in India, the United Arab Emirates (UAE), Nepal and Sri Lanka.
The healthcare provider reported a 40.4 per cent year-on-year increase in consolidated net profit for the June quarter of financial year 2024-25 (Q1FY25), to Rs 173.98 crore, as against Rs 123.95 crore in the same period last year.
Operating revenue also increased 12.2 percent year-on-year to Rs 1,859 crore, driven by growth in both the hospital and diagnostics segments.
The company’s consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 25.5 percent year-on-year to Rs 343 crore, with EBITDA margin improving to 18.4 percent from 16.5 percent a year ago.
However, the diagnostics division saw a modest 2 percent YoY revenue growth, which amounted to Rs 309 crore.
The company has a total market capitalization of Rs 41,560.45 crore. The stock is trading at a price-earnings ratio of 195.18 times with an EPS of Rs 2.83 per share.
At 11:30 am, the company’s share price had erased all its gains and was trading down 0.13 per cent at Rs 551. In comparison, the BSE Sensex was trading up 0.34 per cent at 82,647 levels.
First publication: 02 Sep 2024 | 11:51 am IST