Prime Stock Recommendation: A niche hospital stock with bright prospects
Our pick in the capital intensive hospital sector.
More like this
Nifty IT Stocks Rally: A price bounce or a sector turnaround?
PrimeInvestor Research Team
August 4, 2026
Read More »
Technical outlook: Promise in Consumer Durables, the grind continues in Nifty50
B Krishnakumar
August 3, 2026
Read More »
9 thoughts on “Prime Stock Recommendation: A niche hospital stock with bright prospects”
Thanks for the clarification
One question (am new to this):y is narayana hrudaya with a pe of 33.4 and roce of 25% not a recommendation whereas rainbow is? Am just trying to understand the thought process..
Hello,
We prefer Rainbow with its niche focus – paediatric speciality and the business model that give it advantages as it scales up.
Thanks
PI : Given an estimated 25% EPS CAGR over the next 3 years, we don’t believe the PE will contract meaningfully to offer a better entry and therefore recommend a buy at this valuation.
Yes PE will not contract when everything goes fine. But there are always negative surprises in the market and should not we wait till then to buy stocks which are trading above 60 PE at least?
Hello and thank you for your comment. For secular growth stories such as this one, waiting for a correction may prove futile. Further, with no immediately apparent problems that can disrupt the story, waiting for a correction can mean missed opportunities.
Ok Thanks.
They charge Rs.800 for a paediatric consultation in Chennai which is way higher than what is charged in other multi-speciality hospitals like SIMS (personal experience)..they have good doctors but their charges are very high..they cater more towards upper middle class and rich sections of the society, so, don’t know whether they will have substantial increase in volume of patients they handle..I assume these factors were considered as well.
Hello and thank you for your comment.
We believe that Rainbow’s pricing is in line with its positioning as a private hospital specialising in children and women. The value it offers is multi-fold: the ambience it provides, quality of doctors which you also observed and the specialised care.
We also believe that there is a market for this offering.
Hope this addresses your concerns.
Comments are closed.