Shalby

Shalby Limited reported a marginal consolidated revenue decline of 0.6% YoY to INR 279.4 crores in Q3 FY26, with consolidated EBITDA also dipping by 0.6% YoY to INR 37.5 crores, resulting in a margin of 13.4%. Despite this, consolidated PAT improved significantly to INR 1.3 crores from a negative INR 3 crores in the prior year, marking a 1.6% YoY improvement in PAT margins. The group maintains a strong balance sheet with a low gearing ratio of 0.41x and net debt of INR 408 crores.

The standalone hospital business experienced a 2.6% YoY revenue decline to INR 221 crores, with EBITDA margin compressing by 5.5% to 16%. This was primarily attributed to temporary disruptions from insurance contract renegotiations and the departure of 18 doctors, though 40 new doctors were recruited. Management expects a rebound, projecting double-digit volume growth and 5-6% ARPOB growth in the next year, driven by new clinical talent, technology investments, and resolution of insurance issues.

The MedTech segment demonstrated robust growth, with consolidated revenue increasing by 29% YoY to INR 303.8 million, and EBITDA turning positive at INR 0.7 million compared to a significant loss of INR 69 million in the previous year. This turnaround was fueled by a 77% YoY growth in Shalby MedTech India's revenue to INR 189.6 million and a 378% YoY surge in Shalby Global Technologies' revenue to INR 17.2 million. The company highlighted improved domestic execution, distribution reach, and enhanced surgeon engagement.

Shalby has invested over INR 80 crores in the last 8-9 months in infrastructure upgrades, robotics, and diagnostics, including new bunkers, linear accelerators, and PET CT scans. These investments are expected to significantly boost clinical excellence and revenue generation once fully commissioned. The company plans to add 2 more bunkers in Mohali and Delhi NCR within 12-18 months and has the capacity to add 50 beds in the Delhi NCR region, indicating a focus on optimizing existing assets rather than aggressive new capex for the hospital business in the short term.

The company is moving away from the franchisee model, having closed Rajkot and Lucknow facilities, and is not planning to add new franchisees. This strategic decision aims to focus on more profitable organic growth and existing hospital optimization. The payer mix for the hospital business stands at 35% self-pay, 35% insurance/TPA, and 30% government, with government business becoming more accretive due to revised rates.

For the 9 months FY26, consolidated MedTech revenue reached INR 949 million, up 47% YoY, with EBITDA improving by 130% to INR 29.9 million. The company is expanding its global footprint with approvals in Malaysia and regulatory dossiers submitted in South Korea, Vietnam, and Iran. Significant cost optimization efforts, including material optimization and vendor consolidation, have reduced COGS for implants to almost 50% of what they were 4.5 years ago, contributing to the positive EBITDA.

Shalby is actively diversifying its specialty mix, with arthroplasty now accounting for 33% of the work, down from 70-95% years ago. The focus is expanding to high-margin specialties like oncology, cardiology, intensive care, neurology, and transplants. The company successfully completed 32 transplants (29 kidney, 3 liver) in Q3, demonstrating its clinical excellence and ability to attract diverse patient cases.