Rainbow Children’s Medicare (RAINBOW IN) – Q4FY26 Result Update – Growth to sustain – BUY
Published on 26 May 2026
RAINBOW’s reported strong Q4FY26 EBITDA with growth of 26% YoY; more important organic growth was in double digits which is likely to sustain. RAINBOW has added ~780 beds over the past two years, effectively concluding its current expansion cycle. Overall, we see profitability to improve from FY27 with 18.5% EBITDA CAGR over FY26-28E vs 13% CAGR over FY24-26 as new capacities ramp up. Company enjoys higher margins, strong FCF generation with net cash B/S, and healthy return ratios because of the asset light hub-and-spoke model, it being the only integrated multi-specialty pediatric hospital chain in India offering comprehensive services, and its full time doctor engagement model. Strategic expansion across its core markets in South India also augurs well for its sustainable growth. Our FY27E / FY28E EBITDA stands increased by 2-3%. Maintain ‘BUY’ rating with revised TP of Rs1,615/share valuing at 25x EV/EBITDA based on pre-IndAS FY28E EBITDA.
