Buy Rainbow Childrens Medicare; target of Rs 1680: Anand Rathi

Anand Rathi is bullish on Rainbow Childrens Medicare has recommended buy rating on the stock with a target price of Rs 1680 in its research report dated February 10, 2025.

Broker Research

February 12, 2025 / 13:30 IST

Buy

26 Aug, 2025 12:21

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Anand Rathi's research report on Rainbow Childrens Medicare

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. Key highlights: a) ARPOB at Rs53,404 fell 4% y/y, but rose 7% q/q. b) Overall occupancy came at 53% (51% a year ago, 60% the quarter prior). c) Mature hospitals’ occupancy was 60% (57%/69%). d) Occupancy at new hospitals was 40% (34%/43%). e) Capacity expansions in Bengaluru’s Electronic City (~90 beds) and Hennur (60) are now expected to be operational in Q2 FY26, while the 100-bed hub hospital in Rajahmundry is to commence in Q1 FY26. f) Further, the regional hub hospital in Coimbatore (130 beds) is now expected to be operational in FY27. g) Net cash at end-Q3 was Rs6.6bn.

Outlook

We expect it to clock 15%/19% revenue/EBITDA CAGRs over FY25-27, supported by capacity added and a better operating leverage. We maintain a Buy with a higher TP of Rs1,680 (earlier Rs1,660), 24x FY27e EV/EBITDA.

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