Rainbow Childrens Medicare Ltd. share price target

We maintain our BUY recommendation on the stock.

We initiate coverage on Rainbow Children's Medicare with a BUY recommendation and a DCF based Target Price (TP) of Rs 1,625/share (EV/EBITDA of 23x H1FY28E EBITDA), implying an upside of 20% from the CMP.

Total ~350 beds are expected to become operational in FY26 Rs1.04bn, in line with our estimates. RAINBOW enjoys higher margins, strong asset-light hub-and-spoke model, it being the only integrated multi-specialty pediatric hospital chain in India offering comprehensive services, and its fulltime doctor engagement model. Strategic expansion across its core markets in...

RAINBOW's Q4FY25 consolidated EBITDA grew by 9% YoY (down 15% QoQ) to Rs1.15bn, but 5% below our estimates due to weaker occupancy. RAINBOW enjoys higher margins, strong FCF generation with net cash B/S, and healthy...

Broadly in line with the consensus and ARe, Rainbow Children’s Medicare reported reasonable Q3 figures with revenue/EBITDA/PAT up 19%/14%/11% y/y.

Rainbow’s Q3FY25 print was largely in line with our estimates as revenue/EBITDA grew 18%/14% YoY, respectively. Ramp up in new hospitals remains strong with breakeven expected for Hyderabad hospitals (commissioned during Q4FY24) within the next quarter.

Rainbow is one of the largest hospital chains in India with pure-play focus on pediatric needs. It operates through a hub and spoke model and its operations are spread across 6 cities including key metro towns like Hyderabad, Chennai, Bengaluru and New Delhi. Its network includes 16 hospitals which house ~1,655 beds and 3 outpatient clinics.

Company is bringing the issue at price band of Rs 516-542 per share at p/e multiple of 32x on pre issue FY21 eps basis. RHCL being leading pediatric multi-specialty healthcare chain with strong clinical expertise in managing complex diseases follows Hub-and-spoke model that provides synergies .RHCL has strong track record of growth, operational and financial performance and experienced senior management team with strong institutional shareholder but looking after current...

IPO Note