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- 31 Oct 2024
- ICICI Securities
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SHALBY Q2FY25- WEAK SET OF NUMBERS IMPACTED BY SUBDUED HOSPITALS PERFORMANCE
News: Revenues grew ~12% YoY to ₹ 268 crore, driven by Implant segment business and acquisition of Sanar Hospital in Gurugram. However, existing hospitals sales (standalone) declined ~2% YoY to ₹ 212 crore. Implants (Shalby Consensus) sales grew ~90% YoY to ₹ 28 crore with contributions from the US and Out of US (OUS) at 30% and 70% respectively. EBITDA declined ~38% YoY to ₹ 33 crore and EBITDA margins declined 995 bps to ~12%. Lower EBITDA growth was attributable lower Hospitals sales besides higher RM and other expenses. Hospitals margins stood at ~13% while Implant business reported EBITDA loss of ₹ 73 Lakh at EBITDA level.
Views: The performance was impacted by reduction in surgeries by 7%, an outcome of heavy rains and flooding in Rajasthan and Gujarat resulting in postponement of voluntary surgeries. This was despite 7% ARPOB growth (₹ 38779). Weak numbers during the quarter notwithstanding, Shalby is making right strides with calibrated growth based on asset-light franchisee-based expansion in tier II-VI towns and a select big ticket expansion in metros and tier I cities. It plans to add 40 franchisees over the next 4-5 years. For Implants business, after a tough FY24, the company has chalked out aggressive global expansion plans. We continue to monitor progress on the margins front as the margins have been treading at the sub-optimum levels in the back-to-back quarters.
Impact: Negative