Buy Rainbow Childrens Medicare Ltd for the Target Rs. 1,650 by Choice Institutional Equities
Key Conference Call Highlights
Operational Updates
* Delivered its highest-ever quarterly revenue in Q4FY26, supported by a healthy growth in outpatient footfalls, inpatient discharges and deliveries across both, mature and newlycommissioned hospitals
* Added nearly 500 beds in FY26, marking the highest annual capacity-addition in the company’s history
* Newly-added facilities in Bengaluru, including HRBR Layout, Electronic City and Mahadevapura IVF centre, are witnessing strong patient traction and ramp-up
* The acquired hospitals at Warangal and Guwahati have integrated seamlessly and continue to scale up well, operationally
Expansion Pipeline
* The company has approximately 900 beds in various stages of execution, including projects in Coimbatore, Gurugram, Pune, Bengaluru and Indore, which are expected to be completed in two and a half years.
* A 130-bed regional hub hospital in Coimbatore is under construction and is anticipated to commence operations in H2FY28
* In Gurugram, a 125-bed facility in Sector 56 is being fast-tracked for H2FY28, while the 325-bed super specialty hub in Sector 44 is targeted for Q1FY29
* A 150-bed greenfield hub hospital in Pune has received all statutory approvals and excavation work is under way
* A lease agreement has been signed for an 80-bed spoke hospital in Seegehalli, Bengaluru, which will be Rainbow’s seventh hospital in the city.
* A built-to-suit 100-bed hospital in central Indore is in the permissions stage, alongside an MoU to run paediatric and obstetric services in a partner-owned 200-bed multi-specialty hospital.
CapEx
* The Gurugram projects are expected to account for the largest share of growth CapEx, with an estimated investment of INR 400–500 Cr in the next few years
* All other facilities (Coimbatore, Pune, Seegehalli, Indore, etc.) are estimated at INR 65–70 lakhs per bed
* The management stated that all ongoing and planned expansions will be funded through internal accruals
Guidance
* The management reiterated its aspiration to deliver around 20% revenue growth in FY27E while sustaining margin
* Aims to improve mature hospital occupancy towards 60%, with blended group occupancy expected in the 56–58% range
* Average Revenue Per Patient (ARPP) is projected to grow at 5–6% annually
* The management indicated that geopolitical issues and lower international patient inflow affected FY26 performance, though domestic growth momentum remains strong
* The company is actively evaluating acquisition opportunities panIndia, with a preference for facilities of at least 50 beds, which are scalable to 100 beds and located in attractive micro-markets
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SEBI Registration no.: INZ 000160131
