Shalby hosted a conference call on July 9, 2024. In the conference call the company was represented by- Dr. Vikram Shah, Chairman and Managing Director, Mr. Shanay Shah, President and Mr. Amit Pathak, Chief Financial Officer.

Key takeaways of the call

Occupied Bed during Q1 FY25 were 669, growth of 6.87% YoY. ALOS (without daycare) stood at 3.7 compared to 3.97 in the corresponding quarter of the previous year.

In Q1 FY25, in patient count (incl. Day Care) was 22,792, growth of 10.31% YoY. Out Patient count increased 13.05% to 1,34,876.

ARPOB during the quarter was 43,365, growth of 14.1% YoY.

In Q1 FY25, Arthoplasty contributed 40% to total revenue, Critical Care & General Medicine 8%, Cardiac Science 9%, Oncology 10%, Orthopaedic 9%, Neurology 5%, Nephrology 5% and others 13%.

In terms of payor mix, self-pay was 35% in Q1 FY25, insurance 41% and Government 24%.

The company’s core specialties, including Arthroplasty, Oncology, Cardiac Science, Orthopedic, Critical Care & General Medicine, and Neurology, collectively contributed 82% to the revenues in Q1 FY25.

The company is increasing its focus on oncology.

The company is expanding and deepening its presence by opening up new geographies. The company is also working on new products launches from scratch.

As of Q1 FY25, 22 active clinical trials are ongoing across all hospitals, 25 upcoming clinical trials & 1 EC approval received. Four clinical trials are closed.

In Q1 FY25, USA contributed 44% to revenue and India 56%. US customer sales mix from retail and wholesale stood at 45% and 55% respectively.

Homecare business increased by 3.2% YoY in Q1 FY25. Physio, Diagnostics and Pharmacy are the major revenue contributors.

The company is pivoting towards multivendor supply system with higher capacity.

The company diversified into Knee and Hip Implant Manufacturing in California, USA. In Q1 FY25, Knee contributed 685 of product sales mix and Hip 32%.

In Q1 FY25, Arthroplasty fell 3.1% YoY, Oncology grew 20.8%, Orthopaedic grew 29.5%, Nephro & Urology grew 13.1%, General & Cosmetic grew 13.6% and Other Surgery grew 23.2%.

Shalby Academy vertical witnessed an encouraging response, with over 428 students enrolled in various healthcare programs during Q1 FY25.

The company has headroom to grow further with existing bed capacity without major capex.

As of June 2024, net debt balance at the group level amounted to Rs 168 crore, with a net cash balance of Rs 62.7 crore at the standalone level, reinforcing its ability to support strategic growth initiatives.

Paid-up equity share capital, having face value of Rs 10 each increased from Rs 107.31 crore in quarter ended March 2024 to Rs 107.475 crore in quarter ended June 2024.

Management commentary: Mr. Shanay Shah, President said, “The company continued to show a steady performance in Q1’FY25 with a revenue of 289 crore and an EBITDA of 55 crores which is a growth of 20% and 15% respectively from the last financial year. I''m pleased to announce that our hospital business has maintained consistent performance across key operational and financial metrics, witnessing a 6.9% increase in occupancy and a 10.3% rise in in-patient count (including day care) year-on-year in Q1 FY25. Additionally, hospital revenue and EBITDA grew by 20.2% and 15.1% respectively, with a robust EBITDA margin of 19.02% in the same period. Notably, ARPOB and ALOS stood at Rs.43,365 and 3.7 respectively in Q1 FY25, compared to Rs. 38,000 and 3.97 in the corresponding quarter of the previous year up by 14.1% and (6.8) % respectively. Our core specialties, including Arthroplasty, Oncology, Cardiac Science, Orthopedic, Critical Care & General Medicine, and Neurology, collectively contributed 82% to the revenues in Q1 FY25. Our Homecare business contributed Rs.3.77 crores in Q1 FY25 compared to Rs.3.66 crores in Q1 FY24. Additionally, our Shalby Academy vertical witnessed an encouraging response, with over 428 students enrolled in various healthcare programs during Q1 FY25. Furthermore, our Realized Return on Capital Employed from the hospital business stood at 16% in Q1’FY25 on an annualized basis. As of the quarter''s close, our net debt balance at the group level amounted to Rs. 1,680 million, with a net cash balance of Rs. 627 million at the standalone level, reinforcing our ability to support strategic growth initiatives. Shalby has continued to achieve numerous milestones driven by clinical excellence and patient satisfaction, and we take pride in making a positive impact on people''s lives.”

Mr. Deepak Anand, Global Chief Business Officer said, "During the first quarter of this financial year, our implant business made significant progress, generating revenues of INR 259 million up by 58% YOY, with contributions from the USA and OUS at 44% and 56% respectively. We are actively focused on bolstering our team with skilled professionals, transitioning our sales mix to retail customers from wholesale, enhancing operational capacity and efficiency, expanding our product pipeline through extensive research and development efforts, and significantly reducing procurement costs. The reception of our Shalby Advanced Technology implants in hospitals across all markets that we have launched has been highly positive, and we have received additional orders from the Indonesian market. With our key strategies firmly in place, our team is fully dedicated to executing these plans flawlessly. Shalby is well-positioned to achieve double-digit growth with sustainable profitability, while also expanding and deepening our presence by opening up new geographies. These efforts will ultimately drive the creation of sustainable value for all stakeholders at Shalby."