Rainbow Children’s Medicare (RAINBOW IN) – Company Update – Growth to accelerate – BUY
Published on 10 Jun 2026
RAINBOW delivered modest EBITDA growth of 11% CAGR over FY23-26, reflecting the absorption of ~780 beds added during its aggressive expansion cycle, which has now largely concluded. The company continues to benefit from industry-leading margins, strong FCF generation, a net cash balance sheet, and healthy return ratios, aided by its asset-light hub-and-spoke model, unique position as India’s only integrated multi-specialty pediatric healthcare platform, and differentiated full-time doctor engagement model. With newly commissioned capacities entering the ramp-up phase and occupancy levels expected to improve, we forecast Pre IND-AS EBITDA growth of 20% CAGR over FY26–FY28E. Strategic expansion across its core markets in South India along with entry into newer markets augurs well for its sustainable growth. At CMP, the stock trades at 20x EV/EBITDA on FY28E. We recommend ‘BUY’ rating with TP of INR1,700/share, based on 26x FY28E Pre-IND-AS EV/EBITDA.
