Buy Rainbow Childrens Medicare; target of Rs 1700: Emkay Global Financial

Emkay Global Financial is bullish on Rainbow Childrens Medicare has recommended buy rating on the stock with a target price of Rs 1700 in its research report dated February 10, 2025.

Broker Research

February 12, 2025 / 21:47 IST

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26 Aug, 2025 12:21

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Emkay Global Financial's research report on Rainbow Childrens Medicare

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. Delay in commissioning of hospitals in the pipeline, however, was a slight dampener in our view. We believe the company has multiple margin levers that would offset the expected drag from its staggered bed expansion plans over FY25-27 as we anticipate EBITDA CAGR at 18%. Strong net cash balance sheet and robust cash conversion provide comfort on valuations. Baking in the delay in execution,

Outlook

We cut FY26/27E EBITDA by 3% and trim Dec-25E TP to Rs1,700 (5.6% cut) based on 29x Dec-26E pre-IndAS EV/EBITDA.

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