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We expect Fortis to report revenue and EBITDA growth of 3% and 4.6% q-q,
respectively. We pencil in a revenue growth of 6% q-q for Super Religare laboratories
(SRL). We expect a marginal improvement of 20bps in EBITDA margins q-q as newer
capacities launched last quarter begin to ramp up.
We believe that the key catalyst for the stock is improved visibility on the international
acquisition and the profitability of the business going forward. Fortis had mentioned that
it will be raising debt to finance the acquisition, which would raise the debt equity ratio to
1.5x from the current levels of less than 1x. In the current environment assuming such
high debt could be challenging, in our view. Management has also guided that the
debt/equity ratio would be restored at 1x by March 2012 by various measures, including
the dilution of its stake in SRL. We would watch out for any further comments on this
front.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We expect Fortis to report revenue and EBITDA growth of 3% and 4.6% q-q,
respectively. We pencil in a revenue growth of 6% q-q for Super Religare laboratories
(SRL). We expect a marginal improvement of 20bps in EBITDA margins q-q as newer
capacities launched last quarter begin to ramp up.
We believe that the key catalyst for the stock is improved visibility on the international
acquisition and the profitability of the business going forward. Fortis had mentioned that
it will be raising debt to finance the acquisition, which would raise the debt equity ratio to
1.5x from the current levels of less than 1x. In the current environment assuming such
high debt could be challenging, in our view. Management has also guided that the
debt/equity ratio would be restored at 1x by March 2012 by various measures, including
the dilution of its stake in SRL. We would watch out for any further comments on this
front.
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