Rainbow Childrens Medicare Ltd Q1FY26 Earnings Results – 35% rise in Profits

Rainbow Children’s Medicare Limited operates a multi-specialty pediatric, obstetrics, and gynecology hospital chain in India. The company offers a wide range of services such as newborn and pediatric intensive care, pediatric multi-specialty services, pediatric quaternary care, obstetrics, and gynecology. It is country’s largest pediatric hospital chain with 16 hospitals spread across 6 cities.

Q1 FY26 Earnings Summary (April–June 2025)

• Total Income: ₹372.94 crore, up 5.4% QoQ and 9.0% YoY.

• EBITDA: Not directly reported for Q1 FY26, but implied margin steady given sequential profit growth.

• PAT: ₹53.81 crore, up 5.4% QoQ and up 35.4% YoY.

• EPS: ₹5.30, +6% QoQ and +35.9% YoY.

• Net Margin: Improved to 15% from 12% one year earlier; profit growth outpaced revenue growth due to better operational leverage.

• Q1 revenue met analyst consensus; EPS beat estimates by 16%.

• Recent Acquisition: Completed 76% stake in Prashanthi Medicare Pvt. Ltd for ₹32.6 crore, expanding presence in Andhra Pradesh.

• Management Strengthening: Appointment of Dr. Pranathi Subrahmanyam Maddirala as Senior Management Personnel.

• Shareholder Reward: Final dividend of ₹3 per share for FY25.

   

Key Management & Strategic Decisions Q1 FY26

• Integration of Acquisitions: New hospital in Andhra Pradesh to deepen reach outside core Hyderabad market.

• Continued Emphasis on Hub-and-Spoke Model: Helps drive occupancy and scale benefits.

• Talent Retention & Incentive Schemes: Grant of employee stock options to align incentives, support growth.

• Operational Focus: Maintaining cost discipline while ramping up new facilities, prioritizing utilization improvement and case-mix optimization.

• Outlook: Management reiterated a targeted 16% annualized revenue growth over next three years, in line with industry growth.
  

Caveats & Context

• There was a QoQ dip in Q4 due to seasonal occupancy pressure and losses from newly opened/under-ramp units, which is expected to self-correct as these ramp up.

• Full details of Q1 FY26 management commentary will be clearer after the earnings call; current information is based on reported numbers and announced strategic actions.

 

 

Q4 FY25 Earnings Summary (January–March 2025)

• Total Income: ₹353.88 crore, up 8.6% year-over-year (YoY) but down 14% quarter-over-quarter (QoQ).

• EBITDA: ₹114.7 crore, +8.7% YoY. Margin improved slightly to 31.0%.

• PAT (Net Profit): ₹51.06 crore, down 5.2% YoY and down 25.9% QoQ.

• EPS: ₹5.00, compared to ₹5.30 in Q4 FY24 and ₹6.80 in Q3 FY25.

• EBITDA Margin: 31% (flat YoY); occupancy declined ~200 bps YoY due to seasonality in paediatric segment. ARPOB (Average Revenue per Operating Bed) rose 7% YoY to ₹58,100 per day.

• Strategic Expansion: The company continued bed expansion—aimed for 1,000 more over FY25–FY28 (780 announced so far); three new units saw reported start-up losses.

   

Key Management & Strategic Decisions Q4 FY25

• Continued hub-and-spoke expansion model, announcing new centres predominantly in South India to strengthen market leadership.

• Focused on cost discipline, operational efficiency, and leveraging scale, which helped maintain margins despite new unit drag.

• Management noted that the bulk of new bed additions would be ramped up through FY26–28.

• No major cost-cutting measures; priority remained on growth and clinical hiring.

• Reported strong free cash flow (FCF) generation and maintained a healthy balance sheet