Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Fortis Healthcare -Mixed Q3, other income boosts PAT
Fortis Healthcare reported 59.8% YoY revenue growth
to Rs3.7bn for Q3FY11, 11.9% below our estimate. The
initial set-up costs for three new hospitals, which were
commissioned at the fag end of Sept 2010, impacted
EBITDA margin which came to 14.5% vs our estimate of
16.1%. We carry forward our valuation to FY13 and
upgrade our rating to Buy with a target price of Rs175.
Q3 numbers below estimates: Sales at Rs3.7bn (up
59.8% YoY) was 11.9% below our expectation. EBITDA
margin was 14.5%, down 80bp YoY, and 160bp lower
than our estimate. Adjusted PAT grew 58.7% YoY to
Rs345mn, mainly on higher-than-expected other
income.
Set-up costs for new hospitals impacts margin: The
initial set-up costs incurred for 3 new hospitals
impacted EBITDA margin which came to 14.5%.
Excluding these costs, EBITDA margin would have been
16.4%, 30bp above our estimate of 16.1%.
Estimates lowered: Given the slower-than-expected
pick-up in the new hospitals in terms of occupancy
levels and average revenue per bed per day, we have
cut revenue estimates by 11.7%, 17.2% and 11.4% for
FY11, FY12 and FY13 respectively. We have also
increased our cost estimates, thus reducing our EBITDA
and EBITDA margin estimates.
Upgrade to Buy
We roll forward our valuation to FY13 and upgrade the stock to Buy (from Sell) with a revised target
price of Rs175. Our initial Sell rating was because of expensive valuations and we were always
positive on the fundamentals of the company.
Since our initiation in Oct 2010, the stock has corrected by ~35%, making current valuations
extremely attractive stock with good long term fundamentals. We value the stock at 15x FY13E
EV/EBITDA to arrive at our price target. The implied EV/Adjusted at our price target would be Rs
16mn. The stock currently trades at 22x FY13E PE, 1.7x FY13E P/BV, 12.5 FY13E EV/EBITDA and Rs
11.1mn FY13E EV/Adjusted Bed. Our DCF value comes out to be Rs176.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Fortis Healthcare -Mixed Q3, other income boosts PAT
Fortis Healthcare reported 59.8% YoY revenue growth
to Rs3.7bn for Q3FY11, 11.9% below our estimate. The
initial set-up costs for three new hospitals, which were
commissioned at the fag end of Sept 2010, impacted
EBITDA margin which came to 14.5% vs our estimate of
16.1%. We carry forward our valuation to FY13 and
upgrade our rating to Buy with a target price of Rs175.
Q3 numbers below estimates: Sales at Rs3.7bn (up
59.8% YoY) was 11.9% below our expectation. EBITDA
margin was 14.5%, down 80bp YoY, and 160bp lower
than our estimate. Adjusted PAT grew 58.7% YoY to
Rs345mn, mainly on higher-than-expected other
income.
Set-up costs for new hospitals impacts margin: The
initial set-up costs incurred for 3 new hospitals
impacted EBITDA margin which came to 14.5%.
Excluding these costs, EBITDA margin would have been
16.4%, 30bp above our estimate of 16.1%.
Estimates lowered: Given the slower-than-expected
pick-up in the new hospitals in terms of occupancy
levels and average revenue per bed per day, we have
cut revenue estimates by 11.7%, 17.2% and 11.4% for
FY11, FY12 and FY13 respectively. We have also
increased our cost estimates, thus reducing our EBITDA
and EBITDA margin estimates.
Upgrade to Buy
We roll forward our valuation to FY13 and upgrade the stock to Buy (from Sell) with a revised target
price of Rs175. Our initial Sell rating was because of expensive valuations and we were always
positive on the fundamentals of the company.
Since our initiation in Oct 2010, the stock has corrected by ~35%, making current valuations
extremely attractive stock with good long term fundamentals. We value the stock at 15x FY13E
EV/EBITDA to arrive at our price target. The implied EV/Adjusted at our price target would be Rs
16mn. The stock currently trades at 22x FY13E PE, 1.7x FY13E P/BV, 12.5 FY13E EV/EBITDA and Rs
11.1mn FY13E EV/Adjusted Bed. Our DCF value comes out to be Rs176.
No comments:
Post a Comment