Rainbow Children's Medicare delivered robust first-quarter results with net profit rising 13.2% year-on-year to ₹60.57 crore from ₹53.50 crore in the corresponding quarter last year. According to reports from CNBC TV18, the hospital chain's revenue from operations increased 33.2% YoY to ₹469.99 crore compared with ₹352.93 crore a year earlier. The sharp revenue growth suggests the company continued to benefit from higher patient volumes, improved occupancy and expansion of its healthcare network, with the strong performance reflecting robust demand for pediatric and maternity healthcare services.
The company demonstrated strong operational performance with ARPOB (Average Revenue Per Occupied Bed) rising 6% YoY to ₹67,256 and overall occupancy rate of 41.2%, comprising 45% mature units and 34.4% new units. As per Anand Rathi's research report dated August 04, 2026, operational highlights include in-patient segment growth of 28% YoY, outpatient growth of 25% YoY, and delivery segment growth of 23% YoY. The company's EBITDA grew 29.9% YoY to ₹134.65 crore from ₹103.62 crore in the corresponding quarter of the previous financial year, though EBITDA margin moderated to 28.7% from 29.4% a year ago.
Rainbow Children's Medicare is strategically expanding its footprint with a 100-bed hospital in Malad, Mumbai scheduled to begin operations in Q1FY28E, marking its entry into the Western market. The company is also expanding its Andhra Pradesh footprint via acquisitions in Nellore and Guntur, while remaining on track to open its Indore facility by Q3FY27E. As per Prabhudas Lilladher's research report dated August 03, 2026, the company has successfully completed its expansion cycle, adding 40% bed capacities over the past two years and effectively concluding its current expansion phase.
Anand Rathi has recommended a buy rating on Rainbow Children's Medicare with an upwardly revised target price of ₹1,750, increasing from ₹1,500 earlier, valuing the stock at 22x FY28E EV/EBITDA. Prabhudas Lilladher maintains a buy rating with a target price of ₹1,900 per share, valuing the stock at 28x EV/EBITDA based on pre-IndAS FY28E EBITDA. The brokerage's FY27E and FY28E EBITDA estimates have been increased by 3-4% following the strong Q1 performance. The positive outlook is supported by the company's strategic expansion across core markets in South India, strong free cash flow generation with net cash balance sheet, and healthy return ratios.
