The rating upgrade is driven by improvement in the consolidated operating performance, which is expected to sustain over the medium term.
The ratings remain on watch because of the pending legal issues. The Supreme Court, through its order dated November 15, 2019, had initiated suo moto contempt proceedings against FHL with regard to the IHH Healthcare Berhard (IHH) equity infusion and purchase of RHT Health Trust (RHT) assets.
The ratings reflect FHL’s strong market position and healthy financial risk profile. These strengths are partially offset by exposure to regulatory risks in the healthcare industry.
For arriving at its ratings, CRISIL Ratings has combined the business and financial risk profiles of FHL and its subsidiaries, joint ventures and associates, because all the entities are under a common management and have strong business and financial linkages.
At around 12:41 PM, Fortis Healthcare was trading at Rs250.60 per piece down by Rs4.2 or 1.65% on Sensex.