Shalby Limited is an integrated healthcare group with a 32-year legacy, founded by the world-renowned joint replacement surgeon Dr. Vikram I. Shah. The company has evolved from a single 6-bed hospital in 1994 into one of the largest corporate hospital groups in Western and Central India. Shalby operates a chain of 15 hospitals across 12 cities, with a total bed capacity of over 2,300. The hospital network is structured through a mix of owned, operated, and managed facilities, demonstrating a flexible approach to expansion. The company's core clinical strength lies in orthopedics, particularly Arthroplasty (joint replacement), where it is recognized as a global leader, having performed over 175,000 successful surgeries. While orthopedics remains its flagship specialty, Shalby has strategically diversified into other high-acuity areas including Cardiac Science, Oncology, Neurology, Nephrology, and Transplant services.

Beyond its hospital operations, Shalby has a significant presence in the medical technology sector through its subsidiaries. This includes an orthopedic implant manufacturing facility in California, USA, and distribution networks in India and Southeast Asia. This vertical integration allows Shalby to control a key part of its supply chain for joint replacements, creating a unique synergy between its service delivery and manufacturing arms. The company is publicly listed on India's premier stock exchanges and is driven by a vision of multi-fold growth while adhering to its core values of passion, compassion, and innovation.

Official Website: https://www.shalby.org/

• Consolidated Performance (Q3 FY26):

• Revenue stood at ₹2,794 million, a marginal decline of 0.6% year-over-year (YoY) from ₹2,811 million in Q3 FY25.

• EBITDA was ₹375 million, a decrease of 4.7% YoY from ₹393 million.

• Profit Before Tax (PBT) saw a significant decline of 25.3% YoY, falling to ₹92 million from ₹124 million.

• Profit After Tax (PAT) was ₹13 million, a notable turnaround from a loss of ₹29.9 million in the prior year's quarter.

• Net debt on the balance sheet was ₹4,086 million as of December 2025, with a Debt-to-Equity ratio of 0.41x.

• Annualized Return on Capital Employed (ROCE) was 6.7%.

• Standalone Performance (Q3 FY26):

• The standalone business, primarily representing the core hospital operations in India, reported revenue of ₹2,210 million, down 2.6% YoY.

• EBITDA fell more sharply by 27.4% YoY to ₹354 million, compared to ₹488 million in Q3 FY25.

• PBT declined by 38.9% YoY to ₹219 million.

• Net debt was significantly lower at ₹545 million.

• Annualized ROCE for the standalone entity was stronger at 11.1%.

• Segment Performance (Q3 FY26):

• Shalby Hospitals, Pharma & Franchise: This core segment contributed 80.5% of consolidated revenue (₹2,250 million) and the vast majority of EBITDA (₹322.3 million).

• Shalby International (Delhi-NCR): Accounted for 8.6% of revenue (₹239 million) and generated an EBITDA of ₹52.5 million.

• Shalby MedTech (Implant Business): Contributed 10.9% of revenue (₹304 million) and was nearly breakeven at the EBITDA level with ₹0.7 million.

• MedTech (Implant) Business Growth (YoY):

• The MedTech segment showed robust top-line growth, with consolidated revenue increasing by 29% YoY to ₹304 million in Q3 FY26.

• EBITDA for this segment improved dramatically from a loss of ₹69 million in Q3 FY25 to a positive ₹0.7 million in Q3 FY26, indicating a significant operational turnaround.

The company's Q3 FY26 financials show a stable top line but pressure on profitability at both consolidated and standalone levels, while the MedTech business demonstrates strong revenue growth and a turnaround to positive EBITDA.

• Global Leadership in Arthroplasty: Shalby is a globally recognized leader in joint replacement surgeries, having performed over 175,000 procedures. This specialty contributed 35% of the hospital revenue in Q3 FY26, making it the company's primary clinical and brand differentiator.

• Founder-Led Clinical Expertise: The company was founded by Dr. Vikram I. Shah, who pioneered the "Zero Technique" in joint replacement surgery. This deep-rooted clinical expertise at the leadership level permeates the organization's focus on quality and innovation.

• Integrated Healthcare Model: Unlike most hospital chains, Shalby operates a vertically integrated model. It owns an implant manufacturing unit in the USA (Shalby Advanced Technologies Inc.) which supplies its hospitals, providing control over quality, supply chain, and costs for its core specialty.

• Focus on Complex Clinical Work: The company demonstrates capabilities in handling rare and complex medical cases across multiple specialties, including neuro-oncology, advanced cardiac surgery, and trauma management, positioning it as a tertiary care provider.

• Maturity-Driven Profitability: The performance of its hospital assets is directly linked to their maturity. Hospitals operational for 10+ years generate a strong EBITDA margin of 21.4%, showcasing a proven and profitable operating model that can be replicated.

Shalby's distinctiveness stems from its world-class specialization in Arthroplasty, a unique vertically integrated model that includes implant manufacturing, and a proven ability to achieve high profitability in its mature hospital assets.

• MedTech Business Expansion: The implant business is a significant growth driver.

• Consolidated MedTech revenue grew 29% YoY in Q3 FY26 and 47% for the first nine months of FY26.

• The company has a clear international expansion roadmap, with approvals received for Malaysia and Argentina, and active conversations for entry into markets like Russia, Sri Lanka, and Ethiopia.

• High-Acuity Service Lines: Shalby is actively expanding its revenue streams beyond orthopedics by launching and scaling high-margin tertiary care services.

• Successful rollouts of Kidney and Liver Transplant programs, along with Bone Marrow Transplant (BMT) services, are underway. 32 transplants were performed in Q3 FY26 alone.

• Robotic surgery systems have been commissioned at two centers for Urology, Oncology, and other complex surgeries.

• Oncology Infrastructure Scale-Up: The company has invested in enhancing its cancer care capacity by installing new radiotherapy machines and PET-CT scanners across three hospital units.

• Payor Mix Improvement: The hospital business has strengthened its revenue quality by increasing the contribution from TPA/Insurance payers from 35% in Q3 FY25 to 42% in Q3 FY26. This shift, coupled with renewed contracts on improved commercial terms, positively impacts cash flows.

Growth is being driven by the rapid expansion of the MedTech implant business into new international markets and the strategic addition of high-value clinical services like transplants and robotic surgery in the hospital vertical.

• Organic Growth through Occupancy: With a current occupancy rate of 44%, there is significant room to increase patient volumes within the existing infrastructure of 1,415 operational beds. The document notes that an additional 40% of total bed capacity is available to support growth with limited capital expenditure.

• Asset-Light Expansion Model: The company is focused on a prudent capital allocation strategy that favors an Operations & Management (O&M) partnership model on a revenue-sharing basis. This allows for network expansion into key markets without incurring heavy upfront investment, as seen with its Mumbai and Gwalior units.

• Leveraging Technology: Adoption of technology is a key focus area to improve medical outcomes and patient reach. The implementation of orthopedic surgical robots and advanced imaging is a clear example of leveraging technology to enhance its premium procedure mix.

• Doubling ROCE: Management has a stated focus on doubling the Return on Capital Employed (ROCE) in the coming years by capitalizing on the operational leverage inherent in its existing hospital assets.

The primary opportunities for Shalby lie in increasing utilization of its existing hospital capacity for organic growth and pursuing asset-light expansion models, both of which can significantly enhance returns on capital.

• Bed Capacity and Utilization:

• The company has a total bed capacity of over 2,300 across its network.

• As of Q3 FY26, there were 1,415 operational beds.

• The average number of occupied beds during the quarter was 623, resulting in an overall occupancy rate of 44%. This represents a slight decline from 46% in Q3 FY25.

• Operational Metrics (Q3 FY26):

• In-Patient Count: 20,811 patients, a decrease of 7.0% YoY.

• Surgeries: 6,833 total surgeries were performed, down 8.5% YoY. Arthroplasty was the leading category with over 2,640 surgeries.

• Average Revenue Per Occupied Bed (ARPOB): Stood at ₹43,171, showing a marginal increase of 1.1% YoY.

• Average Length of Stay (ALOS): Increased to 3.92 days from 3.62 days in the previous year.

• Capital Allocation and Expansion:

• The company emphasizes a "sustainable Capex business model" by acting as a preferred O&M partner, which minimizes direct capital outlay.

• A key expansion plan in the pipeline is for a hospital in Mumbai with 175 beds.

The company is currently operating at 44% occupancy, indicating substantial unused capacity that can fuel future growth with minimal capex, while future expansion is guided by an asset-light O&M strategy.

• Hospital Business Focus:

• Grow Occupancy Rate: The primary goal is to drive organic growth by increasing patient volumes and utilizing the available 40% of bed capacity.

• Maintain Leadership in Arthroplasty: Continue to strengthen its global leadership position in joint replacements while diversifying into other specialties.

• Mumbai Expansion: Execute the plan to develop its Mumbai hospital, providing access to an important new market.

• Implant (MedTech) Business Roadmap:

• Geographic Expansion: Actively pursue entry into new international markets. The roadmap includes penetrating South Korea, Vietnam, and Iran (paper submitted) and developing markets like Russia and Sri Lanka (active conversations).

• New Product Launches: Broaden the product portfolio with new launches, including G21, CKS TiNbN, Cemented and Cementless Femoral Stems, and Dual Mobility implants.

• Capital Strategy:

• Focus on prudent capital allocation, prioritizing the asset-light O&M model for network expansion.

• Aim to double ROCE by leveraging existing operational infrastructure.

Shalby's future plans are centered on a dual strategy of increasing utilization in its core hospital business while aggressively expanding the geographic and product footprint of its high-growth MedTech implant division.

• Consolidated Margin Performance (Q3 FY26):

• EBITDA margin stood at 13.4%, a contraction from 14.0% in Q3 FY25 and 15.9% in the preceding quarter (Q2 FY26).

• PBT margin was 3.3%, down from 4.4% in the prior year's quarter.

• Standalone Margin Performance (Q3 FY26):

• The standalone business experienced more significant margin pressure.

• EBITDA margin contracted to 16.0% from 21.5% in Q3 FY25, a decline of 550 basis points. The primary drivers were increases in employee benefit expenses and other operating expenses as a percentage of revenue.

• PBT margin fell to 9.9% from 15.8% YoY.

• Profitability by Hospital Maturity:

• There is a clear correlation between hospital age and profitability.

• Hospitals operational for 10+ years (7 units) delivered a robust EBITDA margin of 21.4%.

• Hospitals aged 5-10 years (3 units) had a lower margin of 14.8%.

• Newer hospitals aged 0-5 years (3 units) operated at a 6.6% EBITDA margin, reflecting their ramp-up phase.

The company faced margin compression in Q3 FY26, particularly in its core standalone hospital business, but its mature hospitals continue to demonstrate a highly profitable and stable operating model with over 21% EBITDA margins.

• Shareholding Pattern (as of Dec 31, 2025): The promoter group maintains a strong majority stake in the company.

• Promoters: 74.33%

• Foreign Institutional Investors (FIIs): 4.47%

• Domestic Institutional Investors (DIIs): 0.19%

• Public: 20.36%

• Clinical and Quality Accreditations:

• Shalby's critical care leadership was invited by the Ministry of Health & Family Welfare (Govt. of India) to help define national ICU quality standards, positioning the company as a clinical benchmark.

• It became the first hospital group to achieve NABH accreditation for its ambulance services, highlighting a commitment to patient safety.

• Strategic Technology Adoption:

• Orthopedic surgical robots are now operational at the Delhi and Ahmedabad units to improve precision and attract premium procedures.

• Robotic surgery systems for other specialties like urology and oncology have also been commissioned in two centers.

Key updates reflect strong promoter conviction, national recognition for clinical excellence, and strategic investments in advanced medical technology to enhance service offerings.