1. At a Glance
Rainbow is India’s pediatric superstar, owning 19 hospitals & 5 clinics with 1,935 beds. Q1 FY26 revenue rose 7% YoY to ₹353 Cr while PAT jumped 35% to ₹54 Cr. Great growth, but with P/E at 61x, investors need a strong dose of conviction.
2. Introduction with Hook
Think of Rainbow as the Disneyland of children’s hospitals—minus Mickey Mouse but with NICUs and OBGYN wards. They treat tiny humans while minting healthy profits. But at 10.8x book value, buying this stock feels like paying ₹500 for a hospital parking ticket.
3. Business Model (WTF Do They Even Do?)
- Pediatric Care: Core specialization, high brand recall.
- Obstetrics & Gynecology: Under the “Birthright” brand.
- NICUs & Quaternary Care: High-end care, high margins.
- Expansions: Aggressively entering Tier-2 cities.
Essentially, Rainbow monetizes every stage of childbirth and child care – cradle to kindergarten.
4. Financials Overview
- Q1 FY26 Revenue: ₹353 Cr (+7%)
- Net Profit: ₹54 Cr (+35%)
- OPM: 29% (slight dip from 31%)
- TTM Sales: ₹1,539 Cr, PAT ₹258 Cr
ROE at 17.4%, ROCE at 18.7%—healthy like their patients.
5. Valuation
- P/E: 61x – priced like a premium healthcare stock.
- CMP/BV: 10.8x – steep.
- Fair Value Range: ₹1,300–₹1,650
You’re paying for growth, not value. Hope the expansion keeps delivering.
6. What’s Cooking – News, Triggers, Drama
- Acquired Warangal 100-bed hospital for ₹32.6 Cr.
- Q1 results strong: PAT up 35% YoY.
- Employee stock options granted (ESOP 2025).
- Tier-2 expansion continues—scaling like a startup but in scrubs.
7. Balance Sheet
| ₹ Cr | Mar 24 | Mar 25 |
|---|---|---|
| Assets | 2,170 | 2,377 |
| Liabilities | 2,170 | 2,377 |
| Net Worth | 1,259 | 1,469 |
| Borrowings | 765 | 764 |
Debt stable, reserves growing. Financial fitness: excellent.
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops CF | 329 | 321 | 396 |
| Inv CF | -465 | -226 | -268 |
| Fin CF | 143 | -102 | -118 |
Cash from operations is robust; capex keeps cash tight—classic growth mode.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 17% |
| ROCE | 19% |
| D/E | 0.52 |
| PAT Margin | 17% |
| P/E | 61x |
Financially sexy. Valuation? Stressy.
10. P&L Breakdown – Show Me the Money
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,297 | 1,516 | 1,539 |
| EBITDA | 432 | 494 | 500 |
| PAT | 218 | 244 | 258 |
Consistent growth. Rainbow doesn’t just treat kids—it treats investors well too.
11. Peer Comparison
| Company | P/E | ROE | CMP/BV |
|---|---|---|---|
| Max Healthcare | 110x | 13% | 13.3x |
| Apollo Hospitals | 74x | 19% | 8x |
| Narayana Hrudayala | 51x | 24% | 11.2x |
| Rainbow | 61x | 17% | 10.8x |
Valuation high, but cheaper than Max. Solid middle ground.
12. Miscellaneous – Shareholding, Promoters
Promoters hold 49.9%, FIIs at 23.6% (increasing), DIIs 15.4%, Public only 11.1%. Clearly, smart money loves this pediatric play.
13. EduInvesting Verdict™
Rainbow is a growth story that keeps on giving—strong earnings, expanding presence, and healthy margins. But with P/E at 61x, you’re paying up for the privilege. Great stock, just don’t expect it to come with a discount prescription.
Written by EduInvesting Team | 26 July 2025
Tags: Rainbow Children’s Medicare, Healthcare Stocks, Pediatric Hospitals, High Growth Stocks, EduInvesting Premium
