RAINBOW - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Rating: 3.3

📊 Financial Performance & Quality

Return Metrics

ROE: 17.4%, ROCE: 18.7% — solid efficiency in capital usage; aligns well with healthcare sector norms.

Earnings Snapshot

EPS: ₹25.4 and PAT decline from ₹56.3 Cr to ₹53.5 Cr — slightly muted QoQ, but still showing strength.

Qtr Profit Var: +35.3% indicates favorable YoY momentum.

Debt Position

Debt-to-Equity: 0.52 — moderate leverage, manageable given consistent earnings.

Dividend Yield

0.20% — token payout reflects reinvestment strategy for expansion.

💸 Valuation & Market Signals

Metric Value Interpretation

P/E Ratio 60.3 Richly valued vs industry PE of 69.2 — optimism priced in

P/B Ratio ~10.52 Premium reflects brand trust and future growth

PEG Ratio 3.03 High — valuation exceeds earnings growth pace

RSI 50.4 Neutral momentum — no directional signal

MACD 17.6 Bullish momentum — trend may extend

Price vs DMA ₹1,525 vs DMA50 ₹1,491 / DMA200 ₹1,421 Mildly above trend lines — technically stable

Volume: Much lower than weekly average — may suggest cooling interest or consolidation phase.

52W Index Position: At 68.2% — trading well off highs, room for upside with earnings support.

FII/DII Sentiment

FIIs reduced (–0.09%), DIIs increased (+0.13%) — net neutral stance.

🏥 Business Profile & Moat Analysis

Focus: Pediatric and maternal healthcare — highly specialized segment with strong branding.

Competitive Advantage

Deep clinical specialization and trust in high-margin segments.

Scalable network with location-based efficiencies.

Positioned to benefit from rising demand in Tier-1 and Tier-2 urban clusters.

Risks

Elevated valuation and PEG ratio limit margin of safety.

Moderate debt needs monitoring if expansion intensifies.

🎯 Investment Strategy

Suggested Entry Zone: ₹1,475–₹1,525 — valuation and trendline comfort align here.

Long-Term Guidance

Growth-focused healthcare pick with scalable earnings potential.

Ideal for investors seeking exposure to urban consumption and healthcare infrastructure.

Watch for occupancy ratios, cost efficiency, and quarterly margin improvements.

Would you like to see Rainbow compared side-by-side with Fortis, Narayana Health, or KIMS to spotlight margin trends, patient throughput, and valuation premiums? I can chart the pulse of the sector for you. Just say when.

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