Shalby Limited

Shalby reported a consolidated revenue of INR 270 crores for Q4 FY25, marking an 8.4% year-on-year growth from INR 249 crores in the previous year. However, consolidated EBITDA saw a significant decline of 40.3% year-on-year, reaching INR 26.2 crores, with the EBITDA margin compressing to 9.7% from 17.6%. The company also reported a negative PBT of INR 0.7 crores for the quarter, compared to a positive INR 21 crores last year. For the full financial year FY25, consolidated revenue grew 16.9% year-on-year to INR 1,115 crores from INR 953 crores.

The stand-alone hospital business recorded a revenue of INR 214 crores in Q4 FY25, a modest 1.7% growth year-on-year. Stand-alone EBITDA declined by 10.8% to INR 38 crores, with margins at 17.7%, primarily due to strategic investments in doctors and a shift in payer mix. ARPOB for stand-alone hospitals improved by 6.4% year-on-year to INR 41,585, while ALOS was 3.68 days. The Shalby Sanar Hospital contributed INR 23 crores in Q4, with ARPOB at INR 84,647 and an occupancy level of 23%. International business accounts for 60% of Sanar's revenue, with 50% from the Middle East, and the hospital saw strong operational growth in IP (20%), day care (40%), and OP (25%) counts.

Shalby MedTech, the orthopedic implant business, demonstrated robust growth, with Q4 FY25 revenue surging 138% year-on-year to INR 29 crores. For the full FY25, its revenue grew 67.2% to INR 93 crores. The number of implant components sold increased by 50% in Q4 and 40% in FY25. Despite this growth, the segment reported a loss of INR 16 crores in Q4, up from INR 8 crores last year, due to significant investments. Management plans to launch two new products this year, expected to contribute INR 40-50 crores annually, and aims for a 30% reduction in COGS and 15-20% supply chain cost reduction.

The company's profitability was impacted by strategic investments, including a 2% increase in doctor costs and a 1% increase due to payer mix changes. Shalby is investing over INR 250 crores in a new Mumbai hospital asset, with completion expected 6-9 months after project initiation. Management anticipates double-digit growth for the hospital business and much higher growth for the implant business in the coming years. They also plan to launch operations in 4-5 new countries for MedTech in FY26 and expect FY26 consolidated revenue to show higher single-digit growth compared to FY25.

Shalby maintains a strong balance sheet with a consolidated net debt of INR 279 crores and a gearing ratio of 0.2. On a stand-alone basis, the company has zero net debt and a positive cash balance of INR 23 crores. The Board decided to skip dividend declaration for the quarter, opting to reserve cash for future investments and growth initiatives. The company highlighted a large acquisition of approximately INR 300 crores in the last 15 months, contributing to its expansion strategy.

Shalby is strategically hiring key talent, including a big GI team of 8 doctors at Indore to establish new verticals like GI and hepatobiliary disease and liver transplants. In Q4, 40 doctors were hired across different hospitals for super-specialty work development. The company also nurtures young talent through its academy vertical, with over 22,000 students registered in healthcare programs and 385+ paramedics enrolled in the current year, including 200+ for Team Indore and 50+ for Team Jabalpur.