Shalby hosted a
conference call on Oct 30, 2023. In the conference call the company was
represented by- Dr. Vikram Shah, Chairman and Managing Director, Mr. Sushobhan Dasgupta, Vice Chairman &
Global President, Mr. Shanay Shah,
President and Mr. Amit Pathak, Chief Financial Officer.
Key takeaways of the call
Company’s hospital
business revenue grew by 22% YoY in Q2 FY23.
In Q2 FY24, Arthroplasty
contributed 42% to total revenue, Critical Care & General Medicine 11%,
Cardiac Science 8%, Oncology 11%, Orthopaedic 7%, Neurology 5%, Nephrology 5%
and Others 12%.
Company is well
placed to achieve double-digit growth in the hospital sector while maintaining
consistent profitability driven by launch of new products, increase in new
accounts, and addition of new territories.
Company’s core
specialties like Arthroplasty, Oncology, Cardiac Science, Orthopedic, Critical
care & General Medicine, and Neurology contributed 83% to the revenues in
Q2 FY24.
Its Homecare
business continued to grow by 62% YoY in Q2 FY24. Company performed more than
275 transplants so far at SG and Indore units in addition to conducting
critical surgeries across its units.
Going forward, management
expects better Q3 and much better Q4 FY24.
In Q2 FY24, in patient
count (incl. Day Care) was 22.652, growth of 21.6% YoY. Total Surgery count of
7,771, growth of 14.2% YoY.
Management
indicated better payor mix with the higher self-pay and insurance patients. In
Q2 FY24, Government contributed 21%, Self-Pay 35% and Insurance 44%.
Company’s
Occupancy rate was 54% in Q2 FY24 compared to 49% in Q2 FY23.
ARPOB during the
quarter was 36,136, growth of 8.1% YoY.
The number of
occupied beds stood at 678 increased by 13.14% YoY in Q2 FY24 because of
increased volumes.
Company has grown
its international presence in other new geographies like UAE, Oman, Bangladesh,
and Nepal through partnerships. Management expects increase in international
revenue going forward.
Company started supplying
implants to Indonesia market in Q2 FY24 against the bulk order received in last
quarter.
In homecare
business, company served 15,565 Patients in H1 FY24 compared to 12,686 patients
in H1 FY23, up by 23% YoY. Physio, Diagnostics and Pharmacy are the major
revenue contributor in Q2 FY24.
Company successfully
operationalized Shalby Managed SOCE franchise unit at Ranchi with 60-bed
capacity in the month of August 2023.
Company has plans
to enhance and expand its presence by introducing Orthopedic units within the
SOCE franchise segment, growing its implant business in current markets, and
venturing into new territories in the coming fiscal year.
In Q2 FY24, total
surgeries performed at SOCE units (operated and managed) have increased by 116%
and 31% QoQ.
The contribution
in sales mix from USA and India accounted for 66% and 34% respectively in Q2
FY24.
In terms of USA
Customer Sales Mix, Wholesale contributed 46% in Q2 FY24 and retail 54%. In
terms of Product Sales Mix, Knee contributed 82% and hip 18%.
20 clinical
trials are currently underway across all its hospital units and 4 clinical
trials are closed during Q2 FY24.
Management commentary: Mr. Shanay Shah, President said: “It has been a strong
quarterly performance in Q2 FY24, where in our hospital business has delivered
ever highest operating margin at 26% on account of operating leverage supported
with increasing self-pay and insurance patients year on year and quarter on
quarter which resulted into higher double-digit ROCE at 23% on an annualized
basis. Hospital business revenue and EBITDA grew by 22% and 31.6% YoY
respectively in Q2 FY23. The number of occupied beds at 678 increased by 13.14%
YoY in Q2 FY24 on account of increased volumes. The payor mix is better with
the higher self-pay and insurance patients in the second quarter of FY24 as compared
to the previous quarter. Our core specialties like Arthroplasty, Oncology,
Cardiac Science, Orthopedic, Critical care & General Medicine, and
Neurology contributed 83% to the revenues in Q2 FY24. Our Homecare business
continued to grow by 62% y-o-y in Q2 FY24. We have performed more than 275
transplants so far at SG and Indore units in addition to conducting critical
surgeries across our units. I am happy to mention that Shalby has grown its
international presence in other new geographies like UAE, Oman, Bangladesh, and
Nepal through partnerships to conduct regular OPDs and healthcare camps in Q2
FY24 and have plans to conduct surgeries as well at these locations. I am very
confident that these strategic locations will help us to increase our
international hospital revenue significantly. Shalby also takes pride in
nurturing young talent through our Shalby Academy vertical with 610+ students
registered in the various healthcare programs during Q2 FY24. We have closed
the quarter with a net cash balance of Rs.705 million at the group level and
are well positioned to fund our strategic growth plans. Shalby continued to add
many more milestones backed by clinical excellence and patient care. We stay
committed to making a positive difference in people’s lives.”
Mr. Sushobhan
Dasgupta, Vice Chairman and Global President said: “I am pleased to inform you
that we have successfully operationalized Shalby Managed SOCE franchise unit at
Ranchi with 60 bed capacity in the month of August 2023. Our SOCE Franchise
business delivered an adequate performance in Q2 FY24. Total surgeries
performed at SOCE units (operated and managed) have increased by 116% and 31%
qoq. Total Revenue from operated and managed units has increased by 104% yoy
and 27% qoq. I am pleased to report that our implant business has delivered
positive EBITDA in Q2 FY24 because of the continuous improvement in operational
efficiencies and better procurement costs. The revenue is at the moderate level
of Rs. 14.7 crore in Q2 FY24, was impacted mainly due to delay in full
commercial launch of our Uni knee across in India on account of delay in
low-cost instruments manufacturing and an unanticipated delay in our full
commercial launch of our new Knee brand in India and in the US. The
contribution in sales mix from USA and India accounted for 66% and 34%
respectively in Q2 FY24. We have started supplying our implants to Indonesia
market in Q2 FY24 against the bulk order received in last quarter. We continued
to strengthen our sales team by hiring new salespeople in the US and India.
Further we remain confident to deliver the results with launching new products,
bringing new accounts, adding new territories, gradually improving the
operational efficiencies, and furthermore substantially bringing down our
procurement and day to day operational costs to add more towards operating
profits. Having established all the essential strategies, Shalby is in an
excellent position to achieve double-digit growth in the hospital sector while
maintaining consistent profitability. We plan to enhance and expand our
presence by introducing Orthopedic units within the SOCE franchise segment,
growing our implant business in our current markets, and venturing into new territories
in the coming fiscal year. These initiatives collectively aim to generate
lasting value for all stakeholders at Shalby.”
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