Revenue rose 24.26% YoY, but sequential margin fell 1.54 points
Costs grew faster than revenue QoQ, while lower taxation lifted net profit growth well above pre-tax profit growth.
Filed 23 May 2026, 19:59 IST · after market close · Rainbow Childrens Medicare Ltd (RAINBOW)
Key takeaways
- Consolidated revenue grew 24.26% YoY to Rs 459.9 cr, while operating margin improved 0.46 percentage points.
- Sequentially, expenses grew 5.61% against revenue growth of 3.24%, cutting operating margin by 1.54 percentage points.
- Net profit rose 38.32% YoY to Rs 78.22 cr, helped by a 16.64-percentage-point fall in the tax rate.
Price around the results
Q4 revenue growth stayed strong on a larger operating base
Rainbow Childrens Medicare's consolidated revenue increased 24.26% YoY, with operating profit rising 26.12%. The presentation reported 2,375 beds, 45.3% occupancy and ARPOB of Rs 62,464 in Q4FY26, providing the operating context for the expansion. Sequential revenue growth was more modest at 3.24%.
Higher costs narrowed the margin, while tax drove profit quality
Expenses grew 5.61% QoQ against 3.24% revenue growth, reducing operating margin by 1.54 percentage points; interest also rose 1.49%. YoY, costs grew slower than revenue and operating margin improved 0.46 percentage points, but depreciation and interest increased 19.85% and 13.13%, respectively. The tax rate fell 16.64 percentage points YoY, helping net profit grow 38.32% against 12.76% growth in pre-tax profit; other income contributed only 4.06% of pre-tax profit.
Margin remains above healthcare peers but has declined for two quarters
Operating margin fell from 33.47% in Q2FY26 to 33.0% in Q3FY26 and 31.46% in Q4FY26, marking two consecutive quarterly declines. It remained 8.08 percentage points above the 23.38% median for 48 healthcare peers that had reported the quarter. The YoY comparison is better, with margin up from 31.0%.
Management outlined a multi-year bed expansion
Management said it plans to add 580 beds in FY27-28 and 230 beds in FY28-29, taking total beds to 3,245, and said Coimbatore is expected to be commissioned by H2 FY27-28. The presentation said HRBR Hospital commenced operations on 1 May 2026, while Rainbow Electronic City commenced with 72 operational beds out of 90 capacity beds. Management also said the company intends to expand into tier-2 cities in southern India.
The initial stock reaction was milder than its usual post-results move
The stock fell 0.37% in the first session after the results and was down 1.0% after five sessions, compared with a 1.05% median absolute move across its last eight results reactions. Its history is tilted negative, with six declines and two gains, but the stock was up 5.0% after 15 sessions and 5.62% after 30 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹460 cr | ₹445 cr | +3.24% | +24.26% |
| Other income | ₹4 cr | ₹11 cr | -66.51% | -75.77% |
| Expenses | ₹315 cr | ₹298 cr | +5.61% | +23.42% |
| Operating profit | ₹145 cr | ₹147 cr | -1.55% | +26.12% |
| Operating margin (%) | 31.46% | 33.00% | — | — |
| Interest | ₹21 cr | ₹20 cr | +1.49% | +13.13% |
| Depreciation | ₹41 cr | ₹40 cr | +3.38% | +19.85% |
| Profit before tax | ₹87 cr | ₹98 cr | -11.16% | +12.76% |
| Tax | ₹9 cr | ₹24 cr | -63.99% | -58.03% |
| Net profit | ₹78 cr | ₹74 cr | +5.85% | +38.32% |
| EPS (₹) | ₹7.59 | ₹7.14 | +6.30% | +36.76% |
Operating margin of 31.46% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.37% | -1.69% |
| Next session | +0.77% | — |
| 5 sessions | -1.00% | -0.01% |
| 15 sessions | +5.00% | — |
| 30 sessions | +5.62% | — |
Volume on the results session was 1.02× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q4 FY26 operational KPIs included 2,375 beds, 27,165 IP discharges, 4,24,702 OP consultations and 5,138 deliveries.
- Q4 FY26 occupancy was 45.3%, ARPOB was 62,464 and ALOS was 2.71.
Guidance & outlook
- The company subsequently intends to expand into tier-2 cities in Southern India.
Expansion
- The company plans to add 580 beds in FY27-28 and 230 beds in FY28-29, taking total beds to 3,245.
- Coimbatore is expected to be commissioned by H2 FY27-28.
- The Bengaluru expansion includes 80 beds at Seegehalli, increasing the cluster capacity to 672 beds.
- HRBR Hospital commenced operations on 1 May 2026.
- Prashanthi Hospital, Warangal commenced operations with 100 capacity beds and 70 operational beds.
- Pratiksha Hospital, Guwahati commenced operations with 150 capacity beds and 85 operational beds.
- Rainbow Rajahmundry commenced operations with 100 capacity beds and 80 operational beds.
- Rainbow Electronic City commenced operations with 90 capacity beds and 72 operational beds.
What to watch
- Whether operating margin remains above 31.46% after the two-quarter decline.
- Whether occupancy improves from 45.3% while ARPOB remains near Rs 62,464.
- Progress against management's stated plan to add 580 beds in FY27-28.