Target: ₹1,625
CMP: ₹1,352.30
Rainbow Children’s Medicare has established a wide moat by offering specialised care across multiple complex pediatric specialities, including Neonatology, Pediatric Cardiology, Pediatric Oncology and Pediatric Orthopaedics, which together contribute a significant portion of overall revenue.
Rainbow’s multi-speciality network and hub-and-spoke expansion model further strengthen its market position, ensuring broader access while optimising cost efficiency. Its focus on high-complexity, high-value procedures and continuous capacity expansion, including new hospitals in Gurugram, Tamil Nadu, Bengaluru and North India, is expected to drive sustainable revenue and margin growth over the medium term.
Rainbow is well-positioned to deliver healthy growth, supported by strong occupancy trends in mature hospitals, improving contributions from new hospitals, and its focused specialisation in paediatrics and maternity care.
We initiate coverage on Rainbow with a Buy recommendation and a DCF-based Target Price (TP) of ₹1,625/share (EV/EBITDA of 23x H1FY28E EBITDA), implying an upside of 20 per cent from the CMP. Rainbow enjoys strong brand recognition in pediatric care, built over decades through consistent delivery of high-quality child healthcare services. We maintain our ₹72 target price and O-PF rating. Risks include lower traffic and toll leakage, project delays.