Recommendations From Hospitals and Electrical Sector

CMP: Rs 166.15 BSE Code: 532843 Volume: 83,832 Face Value: Rs 10

Fortis Healthcare swung to a profitable level in Q2 FY16, driven by strong margin expansion. It reported a profit of Rs 34 crore in Q2 FY16 as compared to a loss of Rs 58 crore in the same quarter of the previous year. Its consolidated total income edged up by 6 per cent to Rs 1,097 crore in the current quarter. The EBITDA margins reported an all-time high of 17.1 per cent in Q2, a jump of nearly 300 basis points over the same quarter of the previous year. During the quarter, the company also increased its equity stake in diagnostics’ subsidiary SRL, taking its stake to 57 per cent from 53.9 per cent. Going forward, the company will clock double-digit revenue growth in the next 2-3 years. This would primarily be driven by its Indian hospital business, boosted by the opening of two new hospitals in the near term and the addition of 400-600 beds annually across its existing hospitals.

CMP: Rs 1,290.95 BSE Code: 500049 Volume: 19,897 Face Value: Rs 10

Bharat Electronics (BEL) is engaged in the design, manufacture and supply of strategic electronics products/systems primarily for defense requirements, as well as for select non-defense markets. In Q2 FY16, its net profit jumped 40.68 per cent to Rs 206.75 crore on 14.28 per cent growth in total income to Rs 1,605.25 crore over Q2 FY14. Its order book at the end of Q2 FY16 stood at around Rs 21,600 crore. The order inflow for Q2 FY16 stood at Rs 1,980 crore, up 139 per cent YoY. Major orders acquired during Q2 FY16 include integrated air command control system, ground-based mobile ELINT system, electronic fuze, armoured engineer reconnaissance vehicle, components kit for DFCC and ADC, and hand-held thermal acquisition binocular. Major orders expected to be finalised in FY16 include Akash missile system, weapon locating radars, hand-held thermal imager, mobile cellular communication system, etc. BEL will be the prime beneficiary of the government’s focus on modernisation of the current fleet and procurement of new capital equipment.