Why shares fell upto 10% in two days ? Any news regarding this sel off.
I assume it is happening because of latest supreme courtâs order to Govt. to standardize hospital charges.
Link- SC directs Centre to standardise healthcare procedure rate: How will it impact hospitals?
Rainbow enjoys over 35% OPM. Thatâs a big number for a hospital.
If Govt. intervenes here, the OPM is likely to go lower.
If that happens then why should market pay 50+ PE for Rainbow.
Hence the selling.
My thoughts only.
Disc: not invested
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View on Corporate Governance
Itâs encouraging to note that 4 out of 7 directors are independent, which is a positive sign for corporate governance. The BODâs diversification and experience contribute to a well-rounded perspective. Members of the board bring diverse expertise to the table which helps to take informed decisions. Direct connection in the board, between Dr. Adarsh Kancharla (Non-executive director) is son of Dr. Ramesh Kancharla (Chairman and Managing Director). While Dr. Adarsh lacks prior experience in business & management, his inclusion in the experienced BOD raises questions about the criteria for selection. We assume that Dr. Anil Dhawan, an independent director, having an indirect association with functional directors. This could impact their independence. Overall, the BOD appears promising, but the indirect association with functional directors warrants second thought. The Board of Directors are considered experienced but on the other hand the management is new to the company due to the recent change in CFO & Group COO, with Vikas Maheshwari taking over from R. Gowrishankar, & Sanjeev Sukumaran taking over from Dr. Rohit Manipal Bhojaraj is also noteworthy. Other than this the management have all of its policies right on point. Please put some light on it if somebody has better understanding into the governance.
Discl :- Above points are my observation I might be wrong. Not an investor, looking for opportunities.
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Another disappointing quarter by Rainbow. FY24 has been the year of headwinds, Lower seasonal illness admissions, seasonal imbalance, delayed mansoon, cyclone affect in Chennai which effected the business. Managment has given guidance of ~15-18% for topline growth. management is working on to improve its brand recall in Chennai and Bangalore in coming future these clusters will be growing near to same as the Hyderabad cluster. Balance sheet to remain robust, capex will be funded by internal accruals. Announced a capex of ~50cr.
The main disappointment is around the growth in the matured hospitals. They had good amount of expansion and that was mainly in the new hospitals which is reflected in the bed count and occupancy and this is understandable as the cost is front ended in hospitals. But despite a good growth in ARPOB and some expanded capacity, the occupancy for matured hospitals dropped for various reasons.
EBITDA growth compared to revenue growth havenât fallen off significantly and it is PAT growth that has dropped so no concern on the core business. This is mainly coming from additional depreciation due to front ended costs. A 15-18% topline growth is lower than the recent past (Last 3 years - 26%) so this signals a period of consolidation in the immediate coming quartersâŚ?
Disc: Invested and biased. 3% of portfolio.
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