Rainbow Children’s Medicare (RAINBOW IN) – Q3FY26 Result Update – In line quarter; guided for strong growth in FY27 – BUY
Published on 30 Jan 2026
RAINBOW’s Q3FY26 EBIDTA was largely in line with growth of 9% YoY. 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% EBITDA CAGR over FY26-28E vs 10% CAGR over FY24-26E 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 broadly remain unchanged. Maintain ‘BUY’ rating with revised TP of Rs1,550/share valuing at 25x EV/EBITDA based on pre-IndAS FY28E EBITDA.
