Fortis profit slips YoY as costs and tax offset revenue growth
The consolidated operating margin recovered sequentially, but higher costs, depreciation and tax kept net profit below last year's level.
Filed 05 Nov 2026, 18:24 IST · after market close · Fortis Healthcare Ltd (FORTIS)
Key takeaways
- Fortis's consolidated revenue grew 17.30% YoY, but expenses grew faster at 18.96%, narrowing operating margin by 1.07 percentage points.
- Net profit fell 2.54% YoY as the tax rate rose 3.17 percentage points and other income declined 68.37%.
- Sequentially, revenue grew 7.46% while expenses rose 5.17%, lifting operating margin by 1.69 percentage points.
Price around the results
Revenue growth did not reach pre-tax profit
Fortis's consolidated revenue grew 17.30% YoY, but pre-tax profit rose only 1.62% because expenses grew faster and depreciation increased 21.25%. Other income fell 68.37% and interest rose 4.57%, further limiting the conversion of operating growth into pre-tax profit. Sequentially, revenue and operating profit improved 7.46% and 16.02%, respectively, while pre-tax profit rose 19.03%.
Margins recover sequentially but remain below last year
Operating margin narrowed by 1.07 percentage points YoY because expenses grew 18.96%, ahead of the 17.30% revenue increase. The sequential picture was better: revenue growth outpaced expense growth by 7.46% versus 5.17%, lifting margin by 1.69 percentage points. Other income contributed 3.64% of pre-tax profit, while the 25.87% tax rate was 3.17 percentage points higher than last year, making profit quality weaker than the operating-profit growth suggests.
Fortis remains above the reported healthcare peer median
Fortis's 22.79% operating margin was 1.15 percentage points above the 21.64% median for the 77 healthcare peers that had reported the same quarter. The margin has recovered from 21.10% in Q1FY27, but remains below 23.86% in Q2FY26. The latest quarter therefore marks a sequential improvement after the previous quarter's decline, rather than a return to last year's margin level.
Management outlines bed and hospital expansion
Management said Fortis aspires to reach approximately 12,000 beds over the next three to five years. The company said it will provide healthcare services at a 400-plus-bed super-specialty hospital in Ashok Vihar, with operations expected in three to four years subject to approvals and phased development. Management also said Fortis acquired Bengaluru's 110-bed Suguna Hospital for approximately Rs 277 cr, with potential to expand it to approximately 150 beds.
No immediate market reaction after the filing
The results were filed after market close, so there is no post-results market reaction to assess here. In the eight prior results reactions, the stock rose four times and fell four times, with a median absolute move of 1.77%, indicating a broadly balanced historical response.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,735 cr | ₹2,545 cr | +7.46% | +17.30% |
| Other income | ₹16 cr | ₹28 cr | -44.50% | -68.37% |
| Expenses | ₹2,112 cr | ₹2,008 cr | +5.17% | +18.96% |
| Operating profit | ₹623 cr | ₹537 cr | +16.02% | +12.02% |
| Operating margin (%) | 22.79% | 21.10% | — | — |
| Interest | ₹78 cr | ₹80 cr | -2.66% | +4.57% |
| Depreciation | ₹128 cr | ₹122 cr | +5.29% | +21.25% |
| Profit before tax | ₹432 cr | ₹363 cr | +19.03% | +1.62% |
| Tax | ₹112 cr | ₹90 cr | +23.74% | +15.80% |
| Net profit | ₹320 cr | ₹273 cr | +17.47% | -2.54% |
| EPS (₹) | ₹4.14 | ₹3.53 | +17.28% | -2.82% |
Operating margin of 22.79% compares with a Healthcare sector median of 21.64% across 77 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Fortis aspires to reach approximately 12,000 beds over the next three to five years.
Expansion
- Fortis will provide healthcare services at a 400-plus-bed super-specialty hospital in Ashok Vihar, New Delhi.
- The Ashok Vihar hospital is expected to commence operations in three to four years, subject to approvals, with phased development.
- Fortis acquired Bengaluru's 110-bed Suguna Hospital in an all-cash deal worth approximately INR 277 crores.
- Suguna Hospital has potential to expand to approximately 150 beds and will strengthen Fortis's Bengaluru presence.
- O&M expansion includes the SLJ Society healthcare services agreement, additional Gleneagles capacity, and greenfield facilities at Lucknow and Cuttack.
What to watch
- Whether operating margin holds above 22.79% after the sequential recovery.
- Whether expenses continue to grow more slowly than revenue after the 17.30% YoY revenue increase.
- Whether the tax rate moves down from 25.87% and other income remains near 3.64% of pre-tax profit.