Rainbow Children’s Medicare (RAINBOW IN) – Q1FY27 Result Update – Strong quarter; growth momentum intact – BUY
Published on 03 Aug 2026
RAINBOW’s reported strong Q1FY27 EBITDA with growth of 30% YoY; aided by organic growth of 24% YoY in Q1. RAINBOW has added 40% bed capacities over the past two years, effectively concluding its current expansion cycle. Overall, we see profitability to improve from FY27 with 22% 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 3-4%. Maintain ‘BUY’ rating with revised TP of INR 1,900/share valuing at 28x EV/EBITDA based on pre-IndAS FY28E EBITDA.
