Shalby Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Shalby Limited reported a mixed Q3 FY26, with consolidated revenue marginally declining by 0.6% YoY to INR 279.4 crores, primarily due to softness in the standalone hospital business. However, the MedTech segment demonstrated strong growth, with consolidated revenue up 29% YoY and EBITDA turning positive. The hospital business faced challenges from insurance contract renegotiations and doctor attrition, but management expects a rebound with new doctor hirings, technology investments, and resolution of insurance issues, alongside a planned reduction in effective tax rate.

Highlights

  • Consolidated MedTech revenue grew 29% YoY to INR 303.8 million, driven by strong domestic execution and international expansion.

  • Shalby MedTech India revenue grew 77% YoY to INR 189.6 million, reflecting improved distribution reach and surgeon engagement.

  • Shalby Global Technologies revenue increased 378% YoY to INR 17.2 million, scaling international distribution footprint.

  • Consolidated MedTech EBITDA turned positive at INR 0.7 million, a significant turnaround from a loss of INR 69 million in Q3 FY25.

  • Successfully completed 32 transplants (29 kidney, 3 liver) in the quarter, demonstrating clinical excellence.

  • Added 40 doctors in the quarter, while losing 18, indicating net positive doctor recruitment.

  • Management expects to move to a lower tax rate of 25% in the coming quarter, which will reduce tax expense significantly.

Concerns

  • Consolidated revenue marginally down by 0.6% YoY to INR 279.4 crores.

  • Consolidated EBITDA down by 0.6% YoY to INR 37.5 crores, with margin compression from 14% to 13.4%.

  • Standalone hospital revenue down by 2.6% YoY to INR 221 crores.

  • Standalone hospital EBITDA margin compressed from 21.5% to 16% (down 5.5% YoY).

  • Insurance business impacted due to negotiation issues with 2-3 major companies, leading to a temporary halt in work for 2-2.5 months.

  • PK Healthcare (Shalby International) occupancy rate is low at 20 beds, though targeting 40 beds for FY27.

  • MedTech PAT is not yet at breakeven, despite EBITDA turning positive.

Key financials

  1. Consolidated Revenue ₹279.4 Cr -0.6%YoY
  2. Consolidated EBITDA ₹37.5 Cr -0.6%YoY
  3. Consolidated EBITDA Margin 13.4%
  4. Consolidated PBT ₹9.2 Cr
  5. Consolidated PBT Margin 3.3%
  6. Consolidated PAT ₹1.3 Cr
  7. Consolidated PAT Margin 50%
  8. Standalone Revenue ₹221 Cr -2.6%YoY
  9. Standalone EBITDA ₹35.4 Cr
  10. Standalone EBITDA Margin 16%
  11. Standalone ARPOB ₹43,171 +1.1%YoY
  12. Standalone ALOS 3.62 days
  13. Standalone Occupancy Rate 44%
  14. MedTech Consolidated Revenue 303.8 Mn +29%YoY
  15. MedTech Consolidated EBITDA 0.7 Mn

What they filed

Q1 FY27: revenue up 11.8%, net profit up 25.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue268 276 265 296 285 +6%272 −1%287 +8%331 +12%
EBITDA33 34 21 42 42 +27%30 −12%29 +38%42 +0%
Net profit2 -3 -12 8 7 +250%1 +133%18 +250%10 +25%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Shalby International (PK Healthcare)
    ₹23.9 Cr Revenue₹87,526 ARPOB3.26 days ALOS51% International Patients Contribution
  • Shalby MedTech India
    189.6 Mn Revenue
  • Shalby Global Technologies
    17.2 Mn Revenue1.9 Mn EBITDA
  • Shalby Advanced Technologies (USA)
    264.6 Mn Revenue16 Mn EBITDA

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investments in bunkers, linear accelerator, radiation oncology therapy (2 regions, 2 more added in Ahmedabad and Surat)
    • New PET CT scan installation
    • Robots (5 for orthopedics, 2 for other specialties)
    • Robotics, diagnostics, and infrastructure upgrades ₹80 Cr
    Besides that, we have already made investments in the last 120 days to 180 days in the bunkers, the linear accelerator bunkers, the radiation oncology therapy. This is across two regions. We already operate this in three regions right now. We operate it in Jaipur, Indore and Ahmedabad so far. Now we've also added two more, one in another part of Ahmedabad and one in Surat. That is likely to play out. ... We have invested in bunkers in 2 of the cities. Now we have 5 bunkers as a group. We are adding we are planning to add 2 more bunkers. ... Robots, we have installed 5 robots across our hospitals for orthopedics and 2 robots for other specialties across our units. ... Over INR80 crores has been invested in some of these areas over the last 8 to 9 months, which have not started adding to the top line significantly because they have just been commissioned.
  • Debt Net ₹408 Cr
    The group continues to maintain a very strong balance sheet with a low gearing ratio of 0.41x with a net debt of INR408 crores.

Guidance & targets

Profitability

  • Effective Tax Rate Profitability · coming quarter · High confidence 25%
    Probably, our evaluation is indicating that we would move to a lower tax rate of 25% into the Shalby Limited. That would reduce our tax expense significantly into the coming quarter.

    — Amit Kumar

  • ARPOB Growth Profitability · next year · Medium confidence 5% to 6%
    Then, of course, there is an ARPOB growth of 5% to 6% additionally on top of that.

    — Shanay Vikram Shah

  • Implant COGS Reduction Profitability · compared to 4.5 years ago · High confidence almost 50% reduction
    The cost of goods manufactured at our implant business at the factory is now down to almost 50% of what we used to manufacture it at about 4 and half years ago.

    — Shanay Vikram Shah

  • Group EBITDA Margin Profitability · with 50% higher occupancy · Medium confidence 23% to 25%
    But at a group level, we definitely as we see the ramp-up, we definitely can go up to 23% to 25% also at a 50% higher occupancy than what it is right now.

    — Shanay Vikram Shah

Capacity

  • PK Healthcare Average Occupancy Capacity · FY27 · Medium confidence 40 beds
    In the next year, for the average, we are looking at, at least, 40 as an average for the full-year.

    — Shanay Vikram Shah

Revenue

  • Implant Segment Growth Revenue · going forward · Medium confidence 40% to 60%
    The implant segment has been growing at 40% to 60% depending on the year for us. We see it growing at that level even going forward.

    — Shanay Vikram Shah

Volume

  • Own Implant Usage in Hospitals Volume · Jan 2026 onwards · High confidence 70% to 80%
    I can tell you that more than 70% to 80% of the implants used in the month of Jan -- from the month of Jan this year have been our implants.

    — Shanay Vikram Shah

  • Existing Hospital Work Capacity Utilization Volume · future · Medium confidence 60% to 70% more
    we should be able to do between 60% to 70% more work than what we are currently doing.

    — Shanay Vikram Shah

Market context

  • Overall Hospital Volume Growth Volume · next year · Medium confidence double-digit
    So, overall occupancy rate, we are not giving forward-looking numbers, but the way we see it is that we definitely see a double-digit volume growth in the next year.

    — Shanay Vikram Shah

What to watch in Q4 FY26

Effective Tax Rate

next quarter
Current Current rate around 35%
Target 25%

Why it matters

Significant reduction in tax expense will boost PAT.

Probably, our evaluation is indicating that we would move to a lower tax rate of 25% into the Shalby Limited. That would reduce our tax expense significantly into the coming quarter.

Risks & concerns

  • Insurance contract renegotiations

    high

    Negotiations led to 2-2.5 months of stopped work with 2-3 major insurance companies, impacting hospital revenue, but contracts are now signed.

    Management acknowledged

  • Doctor attrition

    medium

    Lost 18 doctors but added 40 new ones; actively recruiting high-end specialists to compensate for departures.

    Management acknowledged

  • Underperformance of PK Healthcare (Shalby International)

    medium

    Low occupancy at 20 beds, management issues partially resolved, new clinical talent onboarding, and pending NABH accreditation.

    Management acknowledged

  • MedTech regulatory policies and capacity constraints

    medium

    Past regulatory policies and capacity issues hindered MedTech's growth; capacity issues largely resolved (80-85%), but regulatory front remains uncontrollable.

    Management acknowledged

Q&A highlights

7 direct
Hospital Business Decline Reasons Direct
what has happened in this quarter is, the insurance work particularly has come down because we had been negotiating with some of the insurance companies. So we had to stop doing some of the work with some of these insurance companies, the two or three major insurance companies.

Explains the primary reason for the hospital segment's underperformance this quarter, highlighting a temporary issue with insurance contracts.

Asked by Shubham Harne

PK Healthcare Performance and Strategy Direct
For PK, we are doing a specialty stabilization and with bringing in other specialty doctors. PK was usually much working on liver transplant, BMT and say, oncology work. As 2 doctors, the BMT and liver transplant doctors have left, so we are compensating that we are into recruitment with liver team.

Provides insight into the challenges and strategic adjustments at PK Healthcare, including doctor attrition and a shift in specialty focus.

Asked by Shubham Harne

Hospital Occupancy Projections for FY27 Partial
Look, the occupancy at this point of time, we are ranging at about 20 beds in the Sanar Hospital. In the next year, for the average, we are looking at, at least, 40 as an average for the full-year.

Gives a specific target for PK Healthcare's occupancy but remains qualitative for overall hospital occupancy, indicating uncertainty or reluctance to provide firm numbers.

Asked by Shubham Harne

Volatile Tax Rate and Future Expectations Direct
Probably, our evaluation is indicating that we would move to a lower tax rate of 25% into the Shalby Limited. That would reduce our tax expense significantly into the coming quarter.

Signals a potential positive impact on PAT in the coming quarters due to a strategic shift to a lower tax regime.

Asked by Kashish Thakur

MedTech Breakeven and Profitability Direct
So the results do have a breakeven right now that we've spoken already. Breakeven has already happened. What I just spoke, the breakeven has already happened.

Clarifies that MedTech has already achieved EBITDA breakeven, which is a significant milestone for the segment.

Asked by Omprakash

Hospital Business Expansion Strategy (Franchisee vs. Organic) Direct
For the franchisee, we are not looking at it. In fact, we have closed down the Rajkot as well as the Lucknow facilities... we are not planning to add significant franchisees.

Clearly states a shift away from the franchisee model, indicating a focus on organic growth and optimizing existing assets.

Asked by Omprakash

Doctor Mix and Arthroplasty Reliance Direct
if you ask me 10 years ago, we were at about 70% arthroplasty. 15 years ago, we were at 95% arthroplasty. We have consciously worked on one, obviously, to increase the arthroplasty business because the volume growth in India is significant.

Shows a strategic effort to diversify beyond arthroplasty while still acknowledging its importance, indicating a more balanced specialty mix.

Asked by Om Prakash

MedTech Internal vs. External Consumption Direct
So till about quarter 3 of this year, I would say, Shalby consumption would have been in the range of 20% to 25% in total. That scenario, what Shanay said a little bit earlier, changed in January because of the supply issues getting resolved. From this quarter onwards, you will start seeing a large consumption happening at Shalby.

Indicates a significant shift in internal consumption of MedTech products post-Q3, suggesting improved vertical integration and cost efficiencies.

Asked by Omprakash

3 min read 7 chapters

Detailed narrative

Q3 FY26 Consolidated Performance Overview

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.

Standalone Hospital Business Challenges and Outlook

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.

MedTech Segment's Strong Turnaround

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.

Strategic Investments and Capacity Expansion

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.

Shift in Business Strategy and Payer Mix

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.

MedTech Global Footprint and Cost Optimization

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.

Specialty Diversification and Clinical Excellence

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.

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