⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
RAINBOW - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | RAINBOW | Market Cap | 11,631 Cr. | Current Price | 1,144 ₹ | High / Low | 1,646 ₹ |
| Stock P/E | 47.4 | Book Value | 156 ₹ | Dividend Yield | 0.26 % | ROCE | 18.3 % |
| ROE | 16.7 % | Face Value | 10.0 ₹ | DMA 50 | 1,282 ₹ | DMA 200 | 1,367 ₹ |
| Chg in FII Hold | -2.61 % | Chg in DII Hold | 2.03 % | PAT Qtr | 65.8 Cr. | PAT Prev Qtr | 73.2 Cr. |
| RSI | 20.6 | MACD | -44.0 | Volume | 1,29,639 | Avg Vol 1Wk | 1,63,715 |
| Low price | 1,123 ₹ | High price | 1,646 ₹ | PEG Ratio | 2.66 | Debt to equity | 0.46 |
| 52w Index | 4.09 % | Qtr Profit Var | -1.73 % | EPS | 24.2 ₹ | Industry PE | 45.2 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹65.8 Cr, down from ₹73.2 Cr, showing slight decline. EPS at ₹24.2 indicates moderate earnings power.
- Margins: ROE at 16.7% and ROCE at 18.3% reflect healthy efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.46 is moderate, manageable but worth monitoring.
- Cash Flows: Stable operating cash flows implied by profitability and moderate leverage.
💹 Valuation Indicators
- P/E Ratio: 47.4, slightly above industry average of 45.2, suggesting premium valuation.
- P/B Ratio: Current price ₹1,144 vs. book value ₹156 → ~7.3x, expensive relative to assets.
- PEG Ratio: 2.66, indicating valuation is stretched compared to growth prospects.
- Intrinsic Value: Current valuation appears above intrinsic worth, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- Rainbow operates in healthcare services, focusing on pediatric and maternity hospitals.
- Competitive advantage lies in specialized healthcare expertise, brand recognition, and growing demand for quality medical services.
- Business model benefits from rising healthcare awareness and demand for specialized care.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹1,120 – ₹1,150, near 52-week low and below DMA50.
- Long-Term Holding: Suitable for investors seeking exposure to healthcare growth, though current valuation is expensive. Best to accumulate on dips.
✅ Positive
- Strong ROCE (18.3%) and ROE (16.7%).
- Moderate debt-to-equity ratio (0.46) ensures financial stability.
- DII holding increased (+2.03%), showing domestic institutional support.
⚠️ Limitation
- P/E ratio of 47.4 is expensive compared to industry average.
- P/B ratio of ~7.3x indicates stretched valuation.
- Dividend yield of 0.26% is negligible.
📉 Company Negative News
- Quarterly PAT declined from ₹73.2 Cr to ₹65.8 Cr.
- FII holding decreased (-2.61%), showing reduced foreign investor confidence.
- Stock trading below DMA200 indicates weak momentum.
📈 Company Positive News
- DII holding increased (+2.03%), showing strong domestic institutional support.
- EPS at ₹24.2 reflects consistent earnings power.
- Strong brand presence in specialized healthcare services.
🏭 Industry
- Healthcare services sector trades at industry PE of 45.2, nearly aligned with Rainbow’s valuation.
- Sector growth supported by rising healthcare demand and specialized medical services.
🔎 Conclusion
- Rainbow is financially stable with strong return ratios and moderate debt.
- Valuation is stretched, limiting near-term upside, but long-term prospects remain positive given healthcare demand.
- Best suited for long-term investors with entry around ₹1,120 – ₹1,150 offering a reasonable margin of safety.
I can also prepare a comparative HTML snapshot of Rainbow versus Apollo Hospitals to highlight valuation and profitability differences in the healthcare sector.