According to reports from Anand Rathi, the brokerage has issued a buy rating on Rainbow Children's Medicare with a target price of ₹1,600. The recommendation is based on the company's strong performance in Q3FY26 and its strategic positioning in the paediatric healthcare sector. The target price represents a revised valuation from the previous target of ₹1,780, with the stock valued at 22x FY28e EV/EBITDA.
As reported by Anand Rathi, Rainbow Children's Medicare delivered decent financial results in Q3FY26, with revenue growing 12% year-on-year, EBITDA increasing 9%, and PAT rising 6%. The company's ARPOB (Average Revenue Per Occupied Bed) grew 9% year-on-year to ₹58,362, while occupancy stood at 47.2% compared to 53.2% in Q3FY25 and 52% in Q2FY26. Mature hospitals maintained occupancy at 52.6% versus 60.3% in Q3FY25, while new hospitals recorded 38.8% occupancy.
According to the brokerage report, Rainbow Children's Medicare has added approximately 780 beds over the past two years and effectively concluded its current expansion cycle. The company recently acquired a 100-bed Prashanthi hospital in Warangal, contributing ₹70 million in Q3FY26. In January 2026, the company added 90 beds capacity in Bengaluru's Electronic City, with Hennur facility (60 beds) expected to be operational in Q4FY26. The company also plans to enter the Pune market with a 150-bed facility on a build-to-suit model, likely to begin operations by FY29.
As reported by Anand Rathi, the company maintains a strong financial position with net cash of ₹5.8 billion as of December 2025. The brokerage expects Rainbow's revenue and EBITDA to clock 14% CAGR each over FY25-28, aided by capacity additions and improved operating leverage. The recommendation is based on the company's calibrated focus on paediatric and perinatal services, a model that remains nascent in India, positioning it well for replication across other Indian cities.
