FORTIS - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.7
| Stock Code | FORTIS | Market Cap | 64,614 Cr. | Current Price | 857 ₹ | High / Low | 1,105 ₹ |
| Stock P/E | 349 | Book Value | 122 ₹ | Dividend Yield | 0.12 % | ROCE | 3.27 % |
| ROE | 1.41 % | Face Value | 10.0 ₹ | DMA 50 | 890 ₹ | DMA 200 | 859 ₹ |
| Chg in FII Hold | -0.06 % | Chg in DII Hold | 0.19 % | PAT Qtr | 105 Cr. | PAT Prev Qtr | 38.0 Cr. |
| RSI | 46.0 | MACD | -14.4 | Volume | 13,94,675 | Avg Vol 1Wk | 16,68,105 |
| Low price | 521 ₹ | High price | 1,105 ₹ | PEG Ratio | 2.22 | Debt to equity | 0.22 |
| 52w Index | 57.6 % | Qtr Profit Var | 9.77 % | EPS | 2.31 ₹ | Industry PE | 43.3 |
📊 Analysis: FORTIS shows weak fundamentals for long-term investment despite its large market cap. ROCE (3.27%) and ROE (1.41%) are very low, indicating poor capital efficiency. EPS of 2.31 ₹ is modest, and debt-to-equity at 0.22 reflects manageable leverage. The P/E ratio (349) is extremely high compared to the industry average (43.3), suggesting severe overvaluation. Dividend yield of 0.12% offers negligible shareholder returns. PEG ratio of 2.22 indicates growth is priced expensively. Technically, the stock is trading around DMA 200 (859 ₹) and slightly below DMA 50 (890 ₹), with RSI at 46.0 (neutral) and MACD negative, suggesting consolidation and weak momentum.
💰 Ideal Entry Zone: 750 ₹ – 820 ₹ (closer to support levels, offering margin of safety below current price).
📈 Exit / Holding Strategy: If already holding, consider exiting on rallies near 1,050–1,105 ₹ (52-week high zone). Long-term holding is not advisable unless ROE and ROCE improve significantly. Current metrics suggest weak growth potential, so capital may be better deployed in stronger healthcare peers.
Positive
- Large market cap (64,614 Cr.) provides scale and visibility.
- Debt-to-equity ratio of 0.22 shows manageable leverage.
- Quarterly PAT improved (105 Cr. vs 38 Cr.), showing earnings recovery.
- DII holdings increased (+0.19%), reflecting domestic institutional support.
Limitation
- Extremely high P/E ratio (349) compared to industry average (43.3).
- Low ROCE (3.27%) and ROE (1.41%), showing poor capital efficiency.
- Dividend yield of 0.12% offers negligible shareholder returns.
- PEG ratio of 2.22 highlights expensive growth pricing.
Company Negative News
- Decline in FII holdings (-0.06%), showing reduced foreign investor confidence.
- MACD negative, indicating weak near-term momentum.
Company Positive News
- Quarterly profit variation +9.77%, showing earnings improvement.
- DII holdings increased, reflecting domestic institutional confidence.
Industry
- Industry PE at 43.3, far below company’s valuation, highlighting overvaluation.
- Healthcare sector benefits from rising demand for medical services and infrastructure expansion.
Conclusion
⚠️ FORTIS is not a strong candidate for long-term investment due to poor ROE, ROCE, and unsustainable valuation. Entry only makes sense near 750–820 ₹ for short-term recovery trades. Long-term investors should avoid or exit on rallies unless fundamentals improve significantly.
Selva, would you like me to extend this into a peer benchmarking overlay with healthcare peers (like Apollo Hospitals, Narayana Hrudayalaya, Max Healthcare) so you can compare relative strength and margin-of-safety positioning for your basket rotation strategy?