- Consolidated Revenue: INR221 crores in Q3 FY24, up 6.8% YoY from INR207 crores in Q3 FY23.
- Consolidated EBITDA: INR47 crores in Q3 FY24, up 23.3% YoY from INR38 crores in Q3 FY23; EBITDA margin of 21.2% in Q3 FY24 vs. 18.4% in Q3 FY23.
- Consolidated PBT: INR31 crores in Q3 FY24, up 31% YoY from INR24 crores in Q3 FY23; PBT margin of 14% in Q3 FY24 vs. 11.4% in Q3 FY23.
- Consolidated PAT: INR19 crores in Q3 FY24, up 25% YoY from INR15 crores in Q3 FY23; PAT margin of 8.6% in Q3 FY24 vs. 7.4% in Q3 FY23.
- Standalone Revenue: INR200 crores in Q3 FY24, up 11.5% YoY from INR180 crores in Q3 FY23.
- Standalone EBITDA: INR48 crores in Q3 FY24, up 25.5% YoY from INR39 crores in Q3 FY23; EBITDA margin of 24.2% in Q3 FY24 vs. 21.5% in Q3 FY23.
- Standalone PBT: INR38.5 crores in Q3 FY24, up 34.6% YoY from INR28.6 crores in Q3 FY23; PBT margin of 19.2% in Q3 FY24 vs. 15.9% in Q3 FY23.
- Standalone PAT: INR24.7 crores in Q3 FY24, up 28.7% YoY from INR19.2 crores in Q3 FY23; PAT margin of 12.3% in Q3 FY24 vs. 10.7% in Q3 FY23.
- Net Cash Balance: INR61 crores at group level; INR177 crores on a standalone basis.
- Gearing Ratio: 0.14x at group level; 0.02x on a standalone basis.
- Surgeries Performed: 6,476 surgeries in Q3 FY24.
- ARPOB (Average Revenue Per Occupied Bed): INR37,342 in Q3 FY24 vs. INR36,291 in Q3 FY23.
- ALOS (Average Length of Stay): 3.7 days in Q3 FY24, unchanged from Q3 FY23.
- Occupancy Level: 47% in Q3 FY24 vs. 43% in Q3 FY23.
- International Business Revenue: INR1.7 crores in Q3 FY24.
- Franchise Business Revenue: INR1.4 crores from SOCE, up 13.3% YoY; INR0.74 crores from FOSM, up 6.1% YoY.
- Homecare Business Revenue: INR11 crores in nine-months FY24 vs. INR7 crores in nine-months FY23, up 52% YoY.
- Implant Business Revenue: INR21.5 crores in Q3 FY24, up 46% QoQ from INR14.7 crores in Q2 FY24.
Release Date: February 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Shalby Ltd (BOM:540797, Financial) reported a 6.8% YoY increase in consolidated revenue for Q3 FY24, reaching INR221 crores.
- EBITDA grew by 23.3% YoY, with margins improving from 18.4% in Q3 FY23 to 21.2% in Q3 FY24.
- The company maintained a strong balance sheet with a low gearing ratio of 0.14x and a net cash balance of INR61 crores at the group level.
- Shalby Ltd successfully completed 31 transplants during the quarter and has over 275 kidney and liver transplants to date.
- The company expanded its international presence to new geographies like UAE, Oman, Bangladesh, and Nepal, aiming to increase international hospital revenue.
Negative Points
- The implant business faced delays in launching new products, including a new total knee and TiNbN offerings, impacting growth.
- Supply chain challenges and delays in producing engineering drawings and quality approvals affected the implant business.
- The Nashik project faced significant delays due to the developer's inability to meet commitments, with no clear timeline for completion.
- Sanar International Hospital, recently acquired, is operating at a 15% EBITDA negative margin due to low occupancy levels.
- The company revised its franchise target from 50 to 40 hospitals, indicating a strategic shift and potential slower expansion.
Q & A Highlights
Q: In slide 15, we see that the revenue breakup from the previous year for arthroplasty was 43% and is now 38%, while critical care and general medicine increased from 9% to 13%. Are we diversifying into other areas, and what percentage can we expect in the future?
A: Yes, we are diversifying. Newer units like Jaipur, Naroda, and Jabalpur have shown significant growth, and we expect this trend to continue, unlocking more capacity in these units.
Q: In the PL statement, materials consumed and other expenses have shown a year-on-year decline. Can you elaborate on the reasons for this?
A: The medical work as a percentage of total work was higher than surgical work this quarter, leading to lower material consumption. Additionally, we carried out a significant exercise to rationalize the supply chain and optimize efficiency, contributing to a 2.5% EBITDA improvement.
Q: What is the latest update on the franchise in Rajkot and the newer facility in Nashik?
A: Rajkot is expected to be operational by the end of this quarter or the start of the next quarter. For Nashik, we are dependent on the developer, and there has been a delay on their side. We expect to operationalize the hospital three to four months after receiving the building.
Q: In the implant business, the geographical sales mix shows higher contributions from India. Is this a one-time impact?
A: The US market has been flat, while outside the US has shown significant growth. We have not lost any business, but supply chain issues have delayed growth. We expect to recoup sales soon.
Q: Are we still targeting INR100 million in sales by FY27 for the implant business?
A: Yes, we remain committed to this vision. The market is still growing, and we are confident in achieving our target with the right efforts and market share gains.
Q: Could you provide more details on the Sanar Hospital acquisition and its timeline for scaling up?
A: Sanar Hospital has a capacity of 180 beds, with 130 currently operational. It generates 70% of its revenue from international business. We expect the hospital to achieve INR120-150 crores in revenue over the next 12 months and contribute significantly to our top line in the next three to four years.
Q: What is the debt on the books of Sanar Hospital?
A: The long-term debt is around INR38 crores, and the working capital outstanding is around INR7.5 crores, totaling INR45 crores.
Q: What is the occupancy level and margin profile expected in the next few quarters?
A: Occupancy has grown by 8% this quarter and double digits for the first nine months. We expect 15-18% occupancy growth and 3-6% ARPOB increase, leading to 20-22% overall growth. Margin expansion is expected due to operating leverage.
Q: How many more beds will be operational in Q4 and next year, apart from Sanar?
A: We will reassess and operationalize more beds in existing facilities like Jaipur, Naroda, Surat, and Jabalpur to meet demand.
Q: What is the reason for the 8% growth in the core business this quarter?
A: The growth in planned surgeries was lower than expected, but we see a spillover into Q4. We expect 18-20% annual growth in the hospital business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
