Fortis Healthcare Q3 results: Profit falls 21.8%; revenue up 17.5% | Company Results

Gurugram-based hospital chain Fortis Healthcare reported a 21.8 per cent year-on-year decline in its consolidated net profit for the third quarter of the financial year (Q3FY26) at ₹193.7 crore. However, operating revenue grew 17.5 per cent to ₹2,265 crore.

The decline in profits can be attributed to a one-time exceptional expenditure of ₹55.2 crore relating to the new labor codes. However, this was partly offset by a gain of ₹9.4 crore from reversal of impairment in an associate company. Accordingly, the net exceptional impact on profit stood at ₹45.9 crore for the quarter.

On a sequential basis, the company’s profit fell 39.8 percent, with operating revenue also falling 2.8 percent.

The results were announced after market hours. Shares of Fortis fell 1.22 per cent on Friday, ending the day at ₹916.9 per share on the London Stock Exchange.

Ashutosh Raghuvanshi, Managing Director and Chief Executive Officer, Fortis Healthcare, said, “We have seen healthy growth in our hospital business across all key specialties, including renal sciences and orthopedics. Our acquisition in Bangalore allows us to strengthen our presence in this market from approximately 900 beds across seven facilities, with the potential to increase to over 1,500 beds in the future. We continue to make progress with our expansion plans brownfields and are evaluating other inorganic opportunities in our existing clusters. The sustained recovery of our diagnostics business is encouraging and we expect gradual improvement.

The hospital business said its revenue grew 19.4% year-on-year to ₹1,938 crore in the third quarter of FY26, compared to ₹1,623 crore a year earlier. Operating Ebitda grew 28.9 per cent to ₹420 crore, while margins increased to 21.7 per cent from 20 per cent.

In the nine months ended FY26, hospital revenues grew 19.1% to ₹5,749 crore, with operating Ebitda up 32.1% to ₹1,278 crore and margins improved to 22.2%.

The growth was mainly due to a 14 percent increase in occupied beds during the quarter. Capacity expansion has also helped, with the company acquiring the 125-bed People Tree Hospital in Yeshwanthpur, Bengaluru, in January 2026 for ₹430 crore. The acquisition included the underlying land and an adjacent parcel, allowing for future expansion to more than 300 beds. In November 2025, the company also launched ‘Adayu’, a 36-bed specialized mental health facility in Gurugram.

Hospital sector operational metrics remained stable, with occupancy rate at 67% in Q3 FY26, while average revenue per occupied bed (ARPOB) improved to ₹2.56 crore per annum from ₹2.45 crore a year earlier. The average length of stay (ALOS) increased slightly to 4.29 days.

The Diagnostics activity recorded moderate growth in revenue but strong margin growth. Revenue grew 8.3% YoY to ₹371 crore in Q3FY26, while operational Ebitda jumped 73.5% to ₹86 crore, taking margins to 23.1% from 14.4% a year ago.

For the nine-month period, diagnostics revenue grew 7.7 per cent to ₹1,139 crore, with operational Ebitda up 48.6 per cent to ₹275 crore and margins up to 24.1 per cent.

Testing volumes increased to 9.94 million tests in Q3FY26 from 9.59 million a year earlier. The company continued to expand its diagnostics network, bringing the total number of customer touchpoints to 4,370 as of December 31, 2025. The preventative portfolio’s share of diagnostics revenue increased to 12%, while that of the specialized portfolio increased to 35%, reflecting a shift towards higher value-added testing.

Diagnostics revenue is presented on a gross basis, with the consolidated financial statements reflecting revenue net of intercompany eliminations. On this basis, net diagnostics revenue stood at ₹327 crore in the third quarter of FY26, compared to ₹305 crore in the third quarter of FY25. Excluding one-time rebranding expenses, operating Ebitda margins were 21.3% for the third quarter of FY25 and 21.4% for the nine months ended FY25.