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1. At a Glance
Revenue grew 5% to ₹1,141 Cr. The headline masks trouble underneath: PAT exploded 501% on a one-time tax regime shift, not better operations. The consolidated net debt sits at ₹573 Cr. Credit rating went negative. ICRA flagged slowing margins and weak returns on capital.
The Sanar acquisition in Gurugram is bleeding—occupancy at 23%. The implant business is still loss-making despite being the “growth engine.” Standalone hospital operations show fatigue: EBITDA margin fell to 18.4% from 20.7%.
One thread runs through the year: the company is spending hard to build, but the returns aren’t showing up yet. Occupancy rates hold steady at 45-48%. ROCE landed at 6.5%.
2. Introduction
Shalby is India’s largest joint replacement hospital chain by volume (1,75,000+ surgeries to date), operating 13 hospitals with 2,350+ beds across 10 cities. It acquired Sanar International in Gurugram (130 beds, 60+ countries served) for ₹206 Cr in Jan 2024, and also owns Shalby Advanced Technologies, a manufacturing business in California making orthopedic implants.
The company has two main verticals: hospital healthcare services (79% of group revenue in Q4) and the implant business (14% in Q4, up from 4% in FY22). A third string—the SOCE franchise model—was quietly wound down: two SOCEs closed because they were EBITDA-negative.
Doctor attrition hit PK Healthcare (now part of the Gurugram portfolio) in H1 FY26, though management claimed stabilization by Q4. Government schemes (CGHS, RGHS) contribute about 30% of payer mix. International patients drive Sanar revenue but have been disrupted by Middle East geopolitical tensions.
3. Business Model: WTF Do They Even Do?
The core business: Shalby owns and runs multi-specialty tertiary hospitals, dominating the arthroplasty (knee and hip replacement) segment. Arthroplasty is 31% of revenue in Q4, but the hospital has diversified into oncology (11%), critical care & general medicine (12%), cardiac science (10%), nephrology (6%), and others.
The unit economics look decent at the main hospitals. ARPOB (revenue per occupied bed per day) grew to ₹42,689 in FY26, up 14% from ₹37,517 in FY24. ALOS (average length of stay) is 3.75 days. Occupancy hovers at 46-48% — respectable for Indian hospitals, but leaves 52-54% of beds empty. Management says an additional 40% of capacity can be added without major capex.
Sanar, the Gurugram acquisition, runs at 23% occupancy and operates at a loss. International patient inflows (47% of Sanar’s operating revenue) crashed in Q4 due to US-Iran conflict, though management cited pickup in CIS (Central Asian) and African sourcing by April–May.
The implant business — housed under Shalby MedTech Limited, which owns Shalby Advanced Technologies Inc. in California — manufactures and sells knee and hip implants globally. Revenue nearly doubled to ₹135 Cr in FY26 (consolidated implant revenue), but EBITDA swung from -₹19.2 Cr loss in FY25 to +₹6.7 Cr in FY26. The company makes claims about a “transition from build phase to scale phase,” and management signaled confidence about FY30 ambitions (₹600-700 Cr revenue target). Currently the business is inventory-heavy (>900 days of inventory) and still not profitable at the manufacturing level.
4. Financials Overview
Figures are consolidated, in ₹ crore.
Metric
FY26
FY25
YoY
Revenue
1,141
1,087
+5.0%
EBITDA
170
160
+5.8%
PAT
37
6
+501%
EPS
3.46
0.58
+497%
Consolidated EBITDA margin stayed flat at 14.5%. Operating profit margin (OPM) dipped to 12.5% in Q4 versus the year-ago 13%. The PAT recovery is a mirage: management
