INDIA - Fortis (NYSE:FTS) Healthcare's stock experienced a slight uptick in early trading today, following the company's announcement of the sale of its Chennai-based Fortis Malar Hospital to MGM Healthcare Pvt Ltd. Despite a marginal drop to ₹366.20, the news of the divestment strategy seemed to resonate positively with investors, as shares of Malar Hospital climbed by nearly five percent.
The transaction, which was finalized on Friday, encompasses not just the hospital operations but also outpatient and radiology services, in addition to a parking area owned by HEPL. This move is part of a broader effort by Fortis Healthcare to optimize its asset portfolio, which has included similar asset sales in the past.
In the backdrop of these strategic divestments, Goldman Sachs (NYSE:GS) has reiterated a bullish outlook on Fortis Healthcare, setting a target price of ₹400 per share. This confidence comes even as the healthcare provider reported a decline in net profits of over fifteen percent year-on-year for the third quarter. Nonetheless, Fortis Healthcare is pressing forward with ambitious growth plans, which include the addition of approximately fourteen hundred beds across the Delhi NCR (NYSE:VYX) and Punjab regions within the next three to four years. This expansion is aimed at bolstering the company's presence and capacity in key markets.
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