Rainbow Children's Medicare (RAINBOW) Q2 24/25 earnings summary

Executive summary

• Achieved highest-ever quarterly revenue, EBITDA, and PAT in Q2 FY25, with revenue up 25.5% year-over-year to ₹4,175 million, EBITDA up 25.1% to ₹1,471 million, and PAT up 25.1% to ₹790 million, maintaining strong margins above 35%.

• Operational expansion continued with 1,935 beds across 19 hospitals and 6 outpatient clinics in 6 cities, with new hospitals in Hyderabad, Bengaluru, and Chennai reaching operational stabilization and integration.

• Recognized for clinical excellence with multiple JCI and NABH accreditations, national awards, and notable clinical achievements including gene therapy for SMA and complex pediatric surgeries.

• Launched Butterfly Essentials retail brand and established a comprehensive child development center to address rising behavioral and developmental issues in children, with a new 8,000 sq. ft. center in Hyderabad set to open November 2024.

• Unaudited standalone and consolidated financial results for the quarter and half year ended 30 September 2024 were approved and reviewed, with no material misstatements identified by auditors.

Financial highlights

• Q2 FY25 consolidated revenue grew 25.5% year-over-year to ₹4,175 million; H1 revenue up 20.6% to ₹7,477 million.

• Q2 EBITDA rose 25.1% to ₹1,471 million; H1 EBITDA up 17.3% to ₹2,408 million.

• Q2 PAT increased 25.1% to ₹790 million; H1 PAT up 13.5% to ₹1,187 million.

• EBITDA margin for Q2 at 35.2%, H1 at 32.2%.

• Outpatient and inpatient volumes grew 20% and 22% year-over-year, respectively; deliveries up 12%.

Outlook and guidance

• Confident in sustaining current EBITDA margins (plus or minus 1%) over the long term, with seasonality impacting quarterly margins.

• Expansion plans target increasing total bed capacity from 1,935 to 2,715 by FY27-28, with 380 new beds expected over the next 24 months across Rajajinagar, Bangalore (Hebbal, Electronic City), and Coimbatore.

• Focus on expanding in NCR after consolidating in current core markets; further expansion in Hyderabad and Bangalore will be demand-driven, with a hub-and-spoke model to be replicated in new geographies and tier-2 cities.

• Continued investment in new hospitals and medical equipment as per IPO objectives.