Capitaline

Results 08-Feb-24

Analysis

Shalby

OPM jumped 289 bps

For the quarter ending Dec 2023, consolidated Net sales (including other operating income) of Shalby has increased 6.71% to Rs 216.05 crore compared to quarter ended Dec 2022. Sales of Health care services segment has gone up 8.36% to Rs 194.52 crore (accounting for 90.04% of total sales). Sales of Manufacturing of implants segment has gone down 6.17% to Rs 21.53 crore (accounting for 9.96% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 30.89% to Rs 30.81 crore. PBIT of Health care services segment rose 28.67% to Rs 37.06 crore (accounting for 120.28% of total PBIT). PBIT of Manufacturing of implants segment fell 18.76% to Rs -6.25 crore (accounting for -20.28% of total PBIT).

PBIT margin of Health care services segment rose from 16.04% to 19.05%. PBIT margin of Manufacturing of implants segment fell from negative 22.93% to negative 29.03%. Overall PBIT margin rose from 11.63% to 14.26%.

Operating profit margin has jumped from 16.70% to 19.59%, leading to 25.17% rise in operating profit to Rs 42.32 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 3.53% to 3.20%. Purchase of finished goods cost fell from 9.57% to 8.41%. Employee cost decreased from 17.10% to 16.60%. Other expenses fell from 54.02% to 53.17%. Other direct service cost rose from 43.29% to 44.85%.

Other income rose 7.88% to Rs 4.52 crore. PBIDT rose 23.26% to Rs 46.84 crore. Provision for interest rose 35.96% to Rs 3.63 crore.

PBDT rose 22.30% to Rs 43.21 crore. Provision for depreciation rose 5.17% to Rs 12.4 crore.

Profit before tax grew 30.88% to Rs 30.81 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 11.75 crore, compared to Rs 8.26 crore. Effective tax rate was 38.14% compared to 35.09%.

Net profit attributable to owners of the company increased 24.72% to Rs 19.07 crore.

Promoters’ stake was 74.12% as of 31 December 2023 ,compared to 74.12% as of 31 December 2022 .

For year-to-date (YTD) results analysis.

Net sales (including other operating income) of Shalby has increased 13.79% to Rs 689.52 crore. Sales of Health care services segment has gone up 19.56% to Rs 636.99 crore (accounting for 92.38% of total sales). Sales of Manufacturing of implants segment has gone down 28.21% to Rs 52.52 crore (accounting for 7.62% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 28.43% to Rs 106.41 crore. PBIT of Health care services segment rose 28.12% to Rs 122.92 crore (accounting for 115.51% of total PBIT). PBIT of Manufacturing of implants segment fell 26.20% to Rs -16.51 crore (accounting for -15.51% of total PBIT).

PBIT margin of Health care services segment rose from 18.01% to 19.30%. PBIT margin of Manufacturing of implants segment fell from negative 17.88% to negative 31.43%. Overall PBIT margin rose from 13.67% to 15.43%.

Operating profit margin has jumped from 18.33% to 20.04%, leading to 24.39% rise in operating profit to Rs 138.18 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 3.56% to 3.33%. Purchase of finished goods cost fell from 8.40% to 8.08%. Employee cost decreased from 16.05% to 15.92%. Other expenses fell from 54.49% to 53.62%. Other direct service cost rose from 44.35% to 44.47%.

Other income rose 8.25% to Rs 14.44 crore. PBIDT rose 22.66% to Rs 152.62 crore. Provision for interest rose 51.75% to Rs 9.56 crore.

PBDT rose 21.10% to Rs 143.06 crore. Provision for depreciation rose 3.88% to Rs 36.64 crore.

Profit before tax grew 28.43% to Rs 106.42 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 38.96 crore, compared to Rs 29.08 crore. Effective tax rate was 36.61% compared to 35.10%.

Net profit attributable to owners of the company increased 25.43% to Rs 67.48 crore.

Promoters’ stake was 74.12% as of 31 December 2023 ,compared to 74.12% as of 31 December 2022 .

Full year results analysis.

Net sales (including other operating income) of Shalby has increased 15.16% to Rs 804.92 crore. Sales of Health care services segment has gone up 6.86% to Rs 713.97 crore (accounting for 88.70% of total sales). Sales of Manufacturing of implants segment has gone up 195.47% to Rs 90.96 crore (accounting for 11.30% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 28.93% to Rs 102.04 crore. PBIT of Health care services segment rose 23.44% to Rs 118.64 crore (accounting for 116.26% of total PBIT). PBIT of Manufacturing of implants segment rose 2.16% to Rs -16.59 crore (accounting for -16.26% of total PBIT).

PBIT margin of Health care services segment rose from 14.38% to 16.62%. PBIT margin of Manufacturing of implants segment rose from negative 55.10% to negative 18.24%. Overall PBIT margin rose from 11.32% to 12.68%.

Operating profit margin has declined from 17.16% to 16.99%, leading to 14.01% rise in operating profit to Rs 136.75 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 2.39% to 3.80%. Purchase of finished goods cost fell from 16.28% to 8.49%. Employee cost increased from 13.97% to 16.88%. Other expenses rose from 52.76% to 54.75%. Other direct service cost fell from 44.25% to 44.24%.

Other income rose 81.32% to Rs 22.52 crore. PBIDT rose 20.32% to Rs 159.27 crore. Provision for interest rose 54.75% to Rs 9.13 crore. Loan funds rose to Rs 180.51 crore as of 31 March 2023 from Rs 174.07 crore as of 31 March 2022. Inventories rose to Rs 185.40 crore as of 31 March 2023 from Rs 121.12 crore as of 31 March 2022. Sundry debtors were higher at Rs 106.36 crore as of 31 March 2023 compared to Rs 100.99 crore as of 31 March 2022. Cash and bank balance declined from Rs 110.56 crore as of 31 March 2022 to Rs 12.29 crore as of 31 March 2023. Investments rose to Rs 145.72 crore as of 31 March 2023 from Rs 24.70 crore as of 31 March 2022 .

PBDT rose 18.72% to Rs 150.14 crore. Provision for depreciation rose 12.18% to Rs 48.09 crore. Fixed assets increased to Rs 685.56 crore as of 31 March 2023 from Rs 671.01 crore as of 31 March 2022. Intangible assets declined from Rs 10.16 crore to Rs 10.15 crore.

Profit before tax grew 22.07% to Rs 102.05 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 34.37 crore, compared to Rs 25.18 crore. Effective tax rate was 33.68% compared to 31.81%.

Minority interest increased 86.67% to Rs -0.02 crore. Net profit attributable to owners of the company increased 25.07% to Rs 67.70 crore.

Equity capital decreased from Rs 108.01 crore as of 31 March 2022 to Rs 107.31 crore as of 31 March 2023 . Per share face Value remained same at Rs 10.00.

Promoters’ stake was 74.12% as of 31 March 2023 ,compared to 74.02% as of 31 March 2022 .

Cash flow from operating activities increased to Rs 67.77 crore for year ended March 2023 from Rs 18.92 crore for year ended March 2022. Cash flow used in acquiring fixed assets during the year ended March 2023 stood at Rs 18.48 crore, compared to Rs 75.39 crore during the year ended March 2022.

Business Highlights

Paid-up Equity Share Capital, having face value Rs 10 each increased from Rs 107.31 crore in quarter ended Sept 2023 to Rs 107.353 crore in quarter ended Dec 2023. This increase is due to exercise of 42,735 employee stock options.

Occupied Bed during Q3 FY24 were 590, growth of 8.4% YoY. In patient count (incl. Day Care) was 20,737, growth of 15.2% YoY.

ARPOB during the quarter was 37,342, growth of 2.9% YoY.

Management Comments :
Mr. Shanay Shah, President said, “I am happy to report that our hospital business continued to deliver consistent performance in all key operational and financial parameters with occupancy and In-patient count (Incl day care) growing by 8.4% and 15.2% Y-o-Y respectively in Q3 FY24. Hospital revenue and EBITDA also grew by 11.5% and 25.6% Y-o-Y with robust EBITDA margin of 24.2% in Q3 FY24. ARPOB and ALOS were recorded at Rs.37,342 and 3.79 respectively in Q3 FY24 vis-à-vis Rs 36,291 and 3.74 in the same quarter of the previous year. Our core specialties such as Arthroplasty, Oncology, Cardiac Science, Orthopedic, Critical care & General Medicine, and Neurology contributed 83% to the revenues respectively in Q3 FY24. “We are happy to announce our strategic entry into northern India with acquisition of 87.26% stake into 130 Beds Sanar International hospital. Sanar offers comprehensive, advanced surgical care in specialties such as Cancer, Heart, Blood and Marrow Transplant, Kidney & Liver Transplant, Bone & Joint and Neurosciences among other specialties with 70% business from international markets catering to more than 60 countries. Homecare business showed a strong performance grew by 30% y-o-y in Q3 FY24, from Q3 FY23. Shalby Academy vertical also showed an encouraging response with 400+ students enrolled for various healthcare programs during Q3 FY24. Our Realized Return on Capital Employed from hospital business recorded at 20% in 9M FY24 on annualized basis. We have closed the quarter with a net cash balance of Rs. 611 million at group level and Rs. 1,775 million at standalone level to support our strategic growth plans. Shalby continued to add many milestones backed by clinical excellence and patient satisfaction. We are proud to make a positive difference in people lives.”

Mr. Deepak Ananthakrishnan, Global Chief Business Officer said. “Other than Hospital business, our growth platforms like SOCE Franchise business and Implant business have also delivered healthy performance in Q3 FY24. I am happy to inform that our SOCE Franchise business has delivered 10.7% growth in Q3-FY24 from Q3-FY23. Moreover, our focus remains on capitalizing our expertise and excellence in Orthopedics to have over 40 Shalby franchise hospitals across 30 cities in India. Our implant business made some satisfactory strides during the third quarter of this financial year with revenues of INR 215 million, wherein USA and India contributed 43% and 57% respectively. Our US customer sales mix from retail and wholesale remained at 59% and 41% respectively in Q3 FY24. Further, we are staying focused on adding more talent and building a strong team with the right attitude, shifting our sales to retail customer mix from wholesale, continuously increasing operational capacity and thereby efficiencies, adding new products pipeline supported with extensive research & development activities and substantially bringing down our procurement costs. We continue to receive very positive response from the consumption of our Shalby-Consensus implants in our hospitals as well as we got another couple of orders from Indonesia market. With all the key strategies in place, our team is extremely committed on flawless execution of these strategies. Shalby is well poised to deliver double digit growth in the hospital business with sustainable profitability, deepen and increase our footprints by adding Orthopedic units under SOCE. All this, in turn, will drive to create sustainable value for all stakeholders at Shalby.”

Shalby : Consolidated Results

	Quarter ended			Year to Date			Year ended
Particulars	202312	202212	Var.(%)	202312	202212	Var.(%)	202303	202203	Var.(%)
Net Sales (including other operating income)	216.05	202.46	6.71	689.52	605.94	13.79	804.92	698.95	15.16
OPM (%)	19.59	16.70	289 bps	20.04	18.33	171 bps	16.99	17.16	-17 bps
OP	42.32	33.81	25.17	138.18	111.09	24.39	136.75	119.95	14.01
Other Inc.	4.52	4.19	7.88	14.44	13.34	8.25	22.52	12.42	81.32
PBIDT	46.84	38.00	23.26	152.62	124.43	22.66	159.27	132.37	20.32
Interest	3.63	2.67	35.96	9.56	6.30	51.75	9.13	5.90	54.75
PBDT	43.21	35.33	22.30	143.06	118.13	21.10	150.14	126.47	18.72
Depreciation	12.4	11.79	5.17	36.64	35.27	3.88	48.09	42.87	12.18
PBT	30.81	23.54	30.88	106.42	82.86	28.43	102.05	83.6	22.07
Share of Profit/(Loss) from Associates	0	0	-	0	0	-	0	0	-
PBT before EO	30.81	23.54	30.88	106.42	82.86	28.43	102.05	83.6	22.07
EO Income	0	0	-	0	0	-	0	-4.44	-
PBT after EO	30.81	23.54	30.88	106.42	82.86	28.43	102.05	79.16	28.92
Taxation	11.75	8.26	42.25	38.96	29.08	33.98	34.37	25.18	36.50
PAT	19.06	15.28	24.74	67.46	53.78	25.44	67.68	53.98	25.38
Minority Interest (MI)	-0.01	-0.01	0	-0.02	-0.02	0	-0.02	-0.15	86.67
Net profit	19.07	15.29	24.72	67.48	53.8	25.43	67.7	54.13	25.07
P/(L) from discontinued operations net of tax	0	0	-	0	0	-	0	0	-
Net profit after discontinued operations	19.07	15.29	24.72	67.48	53.8	25.43	67.7	54.13	25.07
EPS (Rs)*	1.77	1.42	24.72	6.25	4.98	25.43	6.27	5.29	18.44

* EPS is on current equity of Rs 108.01 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Shalby : Consolidated Segment Results

td>-

	Quarter ended				Year to Date				Year ended
	% of (Total)	202312	202212	Var.(%)	% of (Total)	202312	202212	Var.(%)	% of (Total)	202303	202203	Var.(%)
Sales
Health care services	90.04	194.52	179.52	8.36	92.38	636.99	532.78	19.56	88.70	713.97	668.16	6.86
Manufacturing of implants	9.96	21.53	22.94	-6.17	7.62	52.52	73.16	-28.21	11.30	90.96	30.78	195.47
Total Reported Sales	100.00	216.05	202.46	6.71	100.00	689.52	605.94	13.79	100.00	804.92	698.95	15.16
Less: Inter segment revenues		0.00	0.00	-		0.00	0.00		0.00	0.00	-
Net Sales	100.00	216.05	202.46	6.71	100.00	689.52	605.94	13.79	100.00	804.92	698.95	15.16
PBIT
Health care services	120.28	37.06	28.80	28.67	115.51	122.92	95.94	28.12	116.26	118.64	96.11	23.44
Manufacturing of implants	-20.28	-6.25	-5.26	-18.76	-15.51	-16.51	-13.08	-26.20	-16.26	-16.59	-16.96	2.16
Total PBIT	100.00	30.81	23.54	30.89	100.00	106.41	82.86	28.43	100.00	102.04	79.15	28.93
Less : Interest		0.00	0.00	-		0.00	0.00	-		0.00	0.00	-
Add: Other un-allcoable		0.00	0.00	-		0.00	0.00	-		0.00	0.00	-
PBIT Margin(%)
Health care services		19.05	16.04	300.80		19.30	18.01	128.95		16.62	14.38	223.30
Manufacturing of implants		-29.03	-22.93	-609.30		-31.43	-17.88	-1,355.08		-18.24	-55.10	3,685.12
PBT	100.00	30.81	23.54	30.89	100.00	106.41	82.86	28.43	100.00	102.04	79.15	28.93

Previous News

Shalby
( Results - Analysis 08-Feb-24 09:39 )

Shalby tumbles after Q3 PAT drops 31% due to higher taxes
( Hot Pursuit - 08-Jan-21 14:35 )

Shalby consolidated net profit rises 18.16% in the December 2022 quarter
( Results - Announcements 18-Jan-23 07:36 )

Shalby announces change in company secretary
( Corporate News - 08-Mar-21 11:23 )

Board of Shalby appoints director
( Corporate News - 19-Oct-22 09:30 )

Shalby revises board meeting date
( Corporate News - 10-May-23 10:58 )

Board of Shalby to consider reducing promoter holding to 75%
( Corporate News - 24-Sep-20 09:40 )

Shalby update on investment in Shalby Global Technologies, Singapore
( Corporate News - 28-Jul-21 13:24 )

Shalby
( IPO Centre - New Issue Monitor 30-Nov-17 17:04 )

Shalby consolidated net profit rises 49.81% in the September 2023 quarter
( Results - Announcements 27-Oct-23 14:09 )

Mars Devices (WOS of Shalby) acquires US based manufacturer of medical devices
( Corporate News - 05-May-21 11:39 )