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* Commencement of 3 spoke models: For the first time, Rainbow has launched threespoke hospitals with a total of 280 beds across Hyderabad, Bangalore, and Chennai, bringing the total capacity to 2,000 beds. Additionally, a new block has been added to the existing hospital in Hyderabad, and an outpatient clinic has been opened in Hennur, Bengaluru.

* An uptick in Inpatient and Outpatient volume: During the quarter, the company experienced solid growth in IPD volumes, which increased by 10.2% YoY to 21,289. Similarly, OPD volumes grew by 12.3% YoY to 3,10,990. Management expressed optimism about sustaining and surpassing this growth momentum in the coming quarters as the new hospitals ramp up their operations.

* Outlook & Valuation: We remain positive on the company due to its focus on increasing bed capacity, occupancy, and IPD/OPD volumes, as well as expanding IVF services across existing and upcoming hospitals. The company is expected to achieve late-teen top-line growth, supported by a strong capex plan that will further boost its bed capacity. Factoring all the rationales, we value the stock at 23x EV/EBITDA on FY26E and arrive at a target price of INR 1,345 with a BUY rating on the stock.

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