Long term stock tips - 3 (Fortis Healthcare)

Company : Fortis Healthcare (NSE code: FORTIS )

Close price :  109.10 ( 21-Aug-2009)

Recommendation : BUY


Market Cap 2,468.40 | * EPS (TTM) - | * P/E - | * P/C 573.16 * Book Value 31.60 | * Price/Book 3.45 | Div(%) 0.00 | Div Yield(%) - Market Lot 1.00 | Face Value 10.00 | Industry P/E 24.22

Fortis Heathcare is a good long term investment bet as it will become as a multibagger stock.

Fortis is second largest company in Healthcare sector after Apollo Healthcare.

Ranbaxy Group company, Fortis Healthcare is planning a mega expansion, including through acquisitions, a move that can entail an investment of  over 2,250 crores by 2010

the Delhi-based healthcare firm, which has sought the help of global consulting firm McKinsey for its expansion plans, is looking to have a total of 35 to 40 hospitals in north, south and west India in the next four years, an industry source said.

"The expansion will include both organic and inorganic route and by the end of it the healthcare firm is likely to have a total bed capacity of 6000-8000, as against the current 2000 beds,"

As per the plans, Fortis is planning to have at least 20 hospitals in North India and another 15-20 in South and West Indian regions, the source added.


Fortis is actively pursuing expansion of its hub and spoke model along with its La Femme facilities, which provide comprehensive healthcare facility to women.

In one of the press meet, Mr. Singh said “We plan to have a cluster of hospitals in Bangalore. Fortis has now a 66-per cent stake in the Bangalore hospital. The group will look at acquisitions, private-public partnerships and greenfield projects to expand the existing 27 hospital network.” Last year, Fortis acquired 48.83 per cent interest in Malar Hospital, Chennai.


Mr. Singh said many acquisitions could be through investing in hospitals set up by industrial groups for whom healthcare was not a core business. “These are cases of collateral damage, where the parent group would rather sell their hospital and invest the money in their core business.” Escorts in Delhi was a case in point. Many Fortis hospitals were functioning already as centres of excellence in specialities like cardiac care and over the next year-and-a half, the group would promote centres in gastro enteritis and cancer care, Mr. Singh said. Not all Fortis hospitals were in the metros and some were in small cities like Jaipur and Faridabad. While recession had hit the healthcare sector in the U.S., the situation was different in India. “There is an over supply of hospital beds in the U.S. while the opposite is the case in India,” he explained. Fortis had a 60-per cent CAGR last year and could maintain its growth, he added

WISH YOU HAPPY INVESTING,

JAI HO.

For Intraday stock commentry and live updated news visit www.rupeedreams.com 

Register your mail in this blog (feed burner) for Daily stock tips and long term tips.