Fortis Healthcare earnings soar in Q3 FY25, driven by hospital business growth and diagnostic expansion

Fortis Healthcare Limited delivered an impressive financial performance in the third quarter of fiscal year 2025, with consolidated revenues climbing 14.8% year-on-year to INR 1,928 crore. This growth was fueled by strong momentum in its core hospital business and strategic expansion in its diagnostic operations. The company also reported an 89.5% surge in profit after tax (PAT), reaching INR 254 crore compared to INR 134 crore in the same period last year, reflecting operational efficiency and effective portfolio management.

The company’s Q3 FY25 results highlight its ability to drive consistent growth across both hospital and diagnostic verticals, underscoring Fortis Healthcare’s position as a leading player in India‘s healthcare industry.

What drove Fortis Healthcare’s strong Q3 FY25 earnings growth?

Fortis Healthcare’s earnings growth in Q3 FY25 was primarily driven by the robust performance of its hospital business, which contributed approximately 84% of the company’s consolidated revenues. The hospital segment posted revenues of INR 1,623 crore, representing a 16.8% increase compared to INR 1,389 crore in Q3 FY24. This growth was supported by a significant rise in patient volumes, improved operational metrics, and a strategic focus on high-margin specialties.

One of the key factors behind this growth was the increase in average revenue per occupied bed (ARPOB), which rose by 9.9% year-on-year to INR 2.45 crore. Additionally, the hospital occupancy rate improved to 67% from 64% in the previous year, reflecting increased demand for Fortis Healthcare’s services.

The company’s international patient business also played a critical role, with revenues growing 17% year-on-year to INR 132 crore. This growth highlights Fortis Healthcare’s expanding global reach, with international patients contributing 7.7% to the hospital business’s overall revenues.

Fortis Healthcare’s focus on key specialties, including oncology, neurosciences, cardiac sciences, gastroenterology, orthopedics, and renal sciences, significantly contributed to revenue growth. Oncology revenue alone surged 30% year-on-year, driven by a 44% increase in hematology and bone marrow transplant cases.

How did Fortis Healthcare’s diagnostic business performance impact overall growth?

While the hospital business remained the primary growth driver, Fortis Healthcare’s diagnostic segment also delivered solid results. The company consolidated its stake in Agilus Diagnostics Limited, increasing its shareholding from 57.68% to 89.20% through the acquisition of a 31.5% stake from private equity investors. This strategic move strengthened Fortis Healthcare’s position in the diagnostics market and provided a significant boost to revenue growth.

In Q3 FY25, the diagnostic business reported net revenues of INR 305 crore, marking a 5.2% increase compared to INR 290 crore in the same quarter last year. Operating EBITDA for the segment rose sharply by 48.8% to INR 49 crore, with margins improving from 11.4% to 16.2% year-on-year. Excluding one-off expenses related to rebranding activities, the diagnostic business achieved an impressive EBITDA margin of 21.3%, up from 18.3% in Q3 FY24.

Agilus Diagnostics conducted approximately 10.29 million tests during the quarter, reflecting a steady increase from 9.85 million tests in Q3 FY24. The company’s focus on preventive diagnostics also paid off, with revenues from this segment growing 17% year-on-year.

What strategic moves contributed to Fortis Healthcare’s profitability?

Fortis Healthcare’s profitability in Q3 FY25 was bolstered by strategic initiatives aimed at optimizing its portfolio and improving operational efficiency. The company continued its portfolio rationalization strategy by divesting the Richmond Road facility in Bangalore in December 2024. This was the third such divestment following the exits from the Malar facility in February 2024 and the Vadapalani facility in July 2023.

These divestments allowed Fortis Healthcare to focus on high-margin assets, enhancing its overall profitability. The company reported an exceptional gain of INR 23.5 crore from the sale of the Richmond Road facility, which contributed to the significant increase in PAT.

Fortis Healthcare’s balance sheet also remained strong, with net debt standing at INR 644 crore as of December 31, 2024. The company’s net debt-to-EBITDA ratio improved to 0.41x, down from 0.45x in the previous year, reflecting strong cash flow generation and prudent financial management.

What do Fortis Healthcare’s Q3 FY25 results mean for its future growth?

The Q3 FY25 results underscore Fortis Healthcare’s resilience and growth potential in the dynamic healthcare landscape. The company’s strategic focus on expanding its hospital network, consolidating diagnostic operations, and investing in advanced medical technologies positions it well for sustained growth.

Commenting on the results, Dr Ashutosh Raghuvanshi, Managing Director and Chief Executive Officer of Fortis Healthcare, highlighted the company’s continued momentum. “Our hospital business contributed significantly to consolidated revenues and EBITDA, driven by strong growth in key specialties. The consolidation of our stake in Agilus Diagnostics and divestment of non-core assets further support our profitability goals,” he stated.

Looking ahead, Fortis Healthcare plans to continue pursuing inorganic growth opportunities, supported by a robust balance sheet. The company’s strategic investments in digital healthcare, advanced medical infrastructure, and international patient services are expected to drive further growth in the coming quarters.

Key financial highlights from Fortis Healthcare Q3 FY25:

• Consolidated revenue: INR 1,928 crore, up 14.8% year-on-year
• Operating EBITDA: INR 375 crore, up 32.0% year-on-year
• Profit after tax (PAT): INR 254 crore, up 89.5% year-on-year
• Hospital business revenue: INR 1,623 crore, up 16.8% year-on-year
• Diagnostic business revenue: INR 305 crore, up 5.2% year-on-year
• Net debt: INR 644 crore, with a net debt-to-EBITDA ratio of 0.41x

Fortis Healthcare’s strong Q3 FY25 performance demonstrates its ability to adapt to evolving healthcare demands while maintaining a clear focus on profitability and growth.