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News: Revenues were down QoQ at Rs 199 crore on account of fewer surgeries taking place. It was at 6,553 in Q4FY23 against 6,782 in Q3FY23. On the operational front, EBITDA showed de growth of 24.5% QoQ to ~Rs 26 crore. EBITDA margins saw a QoQ decline of 388 bps due to rise in employee expenses. PAT came at Rs 13.9 crore, down ~9% QoQ.
Views: Q4 results were below our estimates on the margins front. ARPOB was lower which came at | 34865 in Q4FY23 against 36291 in Q3FY23. Arthroplasty (~15% market share) in Q4FY23 contributed 41% of revenue vis-a-vis 43% in Q3FY23. In asset light franchise model, Shalby remains focused on having over 50 Shalby franchise hospital across India within the next three years. Shalby continues to maintain leadership position in arthroplasty but has also transformed itself as a multispecialty hospital with diversified revenue mix. Shalby’s strategic initiatives are expected to drive its sustainable growth momentum in the coming years. That said, we will particularly focus on the management commentary on the margins front, which were one of the lowest in the last few quarters.
Impact: Negative