Nomura upgrades Fortis Healthcare to 'buy', cuts target price

Nomura has upgraded Fortis Healthcare to "buy" from "neutral", but cut its target price to Rs 124 from Rs 170, citing recent underperformance and improvement in return ratios.

"(The) near-term RoE (return on equity) is low at 1-3 percent, but we expect an average incremental ROE over the next five years to be 33 percent," Nomura said in a report.

Fortis has come to the end of an investment cycle and will now focus on cash flows and profitability, the investment bank added.

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