Fortis Q2 revenue rose 17.3%, but PAT margin fell to 11.6%

Fortis Healthcare reported consolidated revenue of Rs 2,735 crore in Q2FY27, up 17.3% year on year, but profit after tax excluding exceptional items rose 4.0% to Rs 317 crore and its margin fell to 11.6% from 13.1%. Hospital and diagnostics revenue both increased during the quarter.

Why did Fortis profit grow more slowly than revenue in Q2FY27?

Fortis recorded a 17.3% rise in consolidated revenue, while profit before tax excluding exceptional items increased 6.8% and profit after tax excluding exceptional items increased 4.0%. Revenue moved from Rs 2,331 crore in Q2FY26 to Rs 2,735 crore in Q2FY27, whereas PAT rose from Rs 305 crore to Rs 317 crore. The PAT margin therefore fell by 1.5 percentage points to 11.6%.

Hospital business employee stock option plan, or ESOP, expense was Rs 39 crore in Q2FY27, compared with no such expense shown in Q2FY26. The hospital business also recorded Rs 36 crore of other income, including foreign-exchange effects, in Q2FY27 versus Rs 31 crore a year earlier. Its reported PAT margin was 12.1%, compared with 14.5% in Q2FY26.

Exceptional gains were lower in the latest quarter, although the headline consolidated comparison excludes them. Consolidated Q2FY27 PAT excluded a Rs 3 crore exceptional gain, primarily related to reversal of impairment in an associate company, versus a Rs 23.5 crore gain excluded in Q2FY26. On a reported basis, the hospital business had a Rs 3 crore exceptional gain in Q2FY27 against Rs 24 crore a year earlier.

How did Fortis perform over the first half of FY27?

Fortis generated Rs 5,280 crore of consolidated revenue in H1FY27, a 17.4% increase from Rs 4,498 crore in H1FY26, but PAT excluding exceptional items grew 3.8% to Rs 581 crore. First-half PAT margin declined to 11.0% from 12.4%, continuing the pattern of revenue growing faster than earnings.

H1FY27 profit before tax excluding exceptional items was Rs 783 crore, compared with Rs 740 crore in H1FY26, a 5.8% increase. The first-half PAT outcome combines Rs 263 crore in Q1FY27 and Rs 317 crore in Q2FY27, meaning the second quarter improved sequentially in both PAT and margin. Q1FY27 PAT margin was 10.3%, below Q2FY27's 11.6%, but Q2 remained below the 13.1% recorded in Q2FY26.

The revenue trend increased across the immediately preceding quarters, from Rs 2,365 crore in Q4FY26 to Rs 2,545 crore in Q1FY27 and Rs 2,735 crore in Q2FY27. PAT margin recovered from 10.3% in Q1FY27 to 11.6% in Q2FY27, though it remained below 12.0% in Q4FY26 and 13.1% a year earlier.

What did Fortis hospital operations contribute in Q2FY27?

Fortis hospital business delivered operating revenue of Rs 2,340 crore in Q2FY27, up 18.6% from Rs 1,974 crore, and operating earnings before interest, tax, depreciation and amortisation, or EBITDA, rose to Rs 545 crore from Rs 452 crore. Its operating EBITDA margin increased to 23.3% from 22.9%, while hospital PAT before exceptional items grew 6.6% to Rs 281 crore and its PAT margin fell to 12.0% from 13.4%.

Patient activity and pricing measures both rose from a year earlier. Occupancy was 72% in Q2FY27 versus 71% in Q2FY26, while occupied beds increased 9% to 3,616 from 3,318. Average revenue per inpatient, or ARPP, reached Rs 2.10 lakh, up 6.8% from Rs 1.96 lakh; this measure is based on gross inpatient revenue and excludes daycare procedures including chemotherapy, radiotherapy and dialysis.

Focus specialties, consisting of oncology, neurosciences, cardiac sciences, gastroenterology, orthopedics and renal sciences, accounted for 60% of hospital revenue and grew 16.7%. Renal sciences, neurosciences and orthopedics grew 27%, 28% and 30%, respectively. International-patient revenue increased 12.4% to Rs 190 crore and represented 7.7% of hospital revenue, while digital channels contributed 29.5% after revenue from those channels grew 18.6%.

How did Fortis diagnostics and balance-sheet metrics change?

Fortis diagnostics business, Agilus, reported gross revenue of Rs 448 crore in Q2FY27, up 12.2% from Rs 400 crore in Q2FY26, and PAT increased to Rs 68 crore from Rs 59 crore. Its PAT margin on gross revenue improved to 15.2% from 14.8%, differing from the margin movement in the hospital business and the consolidated result.

Agilus operating EBITDA increased to Rs 118 crore from Rs 104 crore, with operating EBITDA margin at 26.2% versus 26.1%. Net revenue after intercompany elimination was Rs 394 crore in Q2FY27, against Rs 357 crore in Q2FY26 and Rs 358 crore in Q1FY27. Fortis held an 89% interest in Agilus as of September 2026, and hospital-business other income in Q2FY27 included dividend income from the subsidiary.

At September 30, 2026, consolidated net debt was Rs 2,188 crore, down from Rs 2,219 crore a year earlier and Rs 2,334 crore at March 31, 2026. Debt was Rs 2,525 crore, while cash and cash equivalents were Rs 337 crore; net debt excludes lease liabilities. Net debt to equity decreased to 0.20 times from 0.23 times a year earlier, and net debt to annualised Q2 EBITDA was 0.87 times versus 0.96 times in Q2FY26.

Conclusion

Fortis delivered higher Q2FY27 revenue across its hospital and diagnostics businesses, supported by a 72% hospital occupancy rate, a 6.8% increase in ARPP and 12.2% growth in Agilus gross revenue. However, consolidated PAT growth of 4.0% trailed revenue growth of 17.3%, while the adjusted PAT margin was 1.5 percentage points below the prior-year quarter.

The next disclosed expansion actions are a 400-plus-bed Ashok Vihar hospital expected to commence operations in three to four years, subject to approvals, under a 29-year healthcare services agreement, and the October 2026 acquisition of 110-bed Suguna Hospital for about Rs 277 crore. Suguna has potential to expand to about 150 beds, while the Ashok Vihar development is planned in phases.