Compliance and Overview
• Shalby Limited submitted a transcript of its Q1 FY 2024-25 earnings call to the National Stock Exchange of India and BSE Limited.
• The call featured key management, including Chairman Dr. Vikram Shah.
• Focus on consistent performance and leadership in joint replacement surgeries.
• Strategic expansion into oncology and transplant surgeries post-acquisition in Delhi.
Financial Performance
• Q1 Revenue: INR 289 crores, a 20% year-over-year increase.
• EBITDA: INR 55 crores with a margin of 20%.
• PBT: Decreased to INR 30 crores (8% decline).
• PAT: Fell to INR 15 crores from INR 21 crores.
• Standalone Hospital Revenue: INR 240 crores (11% increase).
Growth Strategies
• Targeting double-digit growth and sustainable profitability.
• Key strategies include:
• Increasing US sales to $8 million.
• Achieving 50-80% cost reduction through efficiencies.
• Establishing a multi-vendor system for capacity enhancement.
• Developing new FDA-approved products.
Sanar Hospital Acquisition
• Sanar contributed INR 23.77 crores to revenue.
• High ARPOB of INR 75,000 to INR 80,000.
• Expected breakeven at EBITDA level in the next quarter.
Operational Insights
• Concerns raised about declining Arthroplasty revenue mix.
• Home care business experienced a slight decline in patients.
• Leadership changes in the SOCE business with a focus on franchisee model.
Future Prospects
• New hospital agreement in Santacruz, Mumbai, awaiting approvals.
• Emphasis on brand equity and patient referrals through franchisee model.
• Management confident in growth despite regulatory changes.
Conclusion
• Shalby Limited is well-positioned for growth with a strong focus on innovation, operational efficiency, and community health initiatives.

Earnings Report
• Date of Call: May 29, 2024
• Revenue: Rs. 953 crores for FY24 (15% growth)
• Profit: Rs. 197 crores for FY24 (23% growth)
• Q4 Revenue: Rs. 249 crores (20% year-on-year growth)
• EBITDA: Rs. 44 crores (17.6% margin)
• PAT: Rs. 16.04 crores (16% growth)
Key Highlights
• Acquisition: Delhi NCR hospital and Sanar Hospital completed.
• Implant Business: Revenue of Rs. 258 million; focus on operational efficiency and product pipeline expansion.
• Surgery Counts: Increased by 15-16%.
Strategic Initiatives


Sales Growth

Targeting an additional $8 million in U.S. sales.
Focus on Southeast Asia and Latin America for international sales.



COGS Reduction

Aim to reduce COGS from over 80% to 50-55% in 8-12 months.



Capacity Increase & Supply Chain Diversification

Developing a dual supply chain system to enhance capacity and reduce costs.



New Product Development

New Head of Engineering appointed for product initiatives.
Upcoming launches: CKS Gold, Ambition, Stux Gold.



Operational Performance
• Standalone Hospital Revenue: Rs. 211 crores in Q4 (14.5% increase).
• International Business: Generated Rs. 13.6 crores in Q4.
• Home Care Growth: 50% increase with a revenue target of Rs. 40 crores.
Q&A Insights
• Institutionalization of Practices: Dr. Vikram Shah's surgical practices are being institutionalized.
• Sanar Acquisition: Expected to reach breakeven soon; focus on enhancing orthopedic services.
• ARPOB Trends: 12% year-on-year growth influenced by case mix changes.
• CAPEX Plans: Rs. 36 crores for existing units and Rs. 60-65 crores for new units in FY '25.
• Tax Rate Outlook: Expected to remain stable.
Conclusion
• Shalby Limited is focused on growth through strategic initiatives, operational efficiency, and expanding its service offerings while maintaining a commitment to quality healthcare.

Conference Call Details
• Date: February 12, 2024
• Submission Date: February 16, 2024
• Hosted by: Elara Securities
• Key Personnel:
• Dr. Vikram Shah (Chairman and Managing Director)
• Mr. Amit Pathak (CFO)
• Mr. Deepak (New Global Chief Business Officer)
Financial Highlights
• Consolidated Revenue: Rs. 221 Crores (6.8% YoY increase)
• EBITDA: Rs. 47 Crores (21.2% margin)
• Standalone Hospital Revenue: Rs. 200 Crores (11.5% growth)
• Surgeries Performed: 6,476, including 31 transplants
• Bed Occupancy: Increased by 9%
Strategic Developments
• Acquisition: Majority stake in Sanar International Hospital to enhance presence in Delhi/NCR.
• International Expansion: Initiatives in community health programs and market entry.
• New Leadership: Mr. Deepak appointed as Global Chief Business Officer.
Implant Business Performance
• Revenue Growth: 46% increase to INR 21.5 Crores.
• Product Mix: Knees (71%) and hips (29%).
• Challenges: Delays in new product launches and engineering approvals.
• Sales Contribution: US (43%) and India (53%).
Future Outlook
• Sanar Hospital: Projected revenue of ₹120-150 Crores in the next 12 months.
• Mumbai Santacruz Plan: Property handover expected in 3-4 months.
• Franchise Strategy: Shift from 50 to 40 targets to focus on company-owned hospitals.
Market Expansion and Product Development
• US Market Growth: Significant expansion with new product launches planned.
• International Markets: Addressing supply chain issues in Indonesia and Japan.
• Knee Implant Offerings: Emphasis on expanding product range to compete effectively.
Management Insights
• Revenue Projections: Commitment to maintain previous year's revenue levels.
• Occupancy Growth: 8% growth reported, with expectations of 15-18% in upcoming quarters.
• Margin Expansion: Potential for increased margins due to operating leverage.
Conclusion
• Optimism for Future: Management expressed confidence in achieving growth and market expansion goals.

Earnings Call Overview
• Date: November 1, 2023
• Focus: Unaudited financial results for Q2 2024 (ending September 30, 2023)
• Hosted by: Elara Securities
• Key Participants:
• Dr. Vikram Shah (Chairman and Managing Director)
• Sushobhan Dasgupta (Vice Chairman and Global President)
• Amit Pathak (Chief Financial Officer)
Financial Performance Highlights
• Record EBITDA margin: 26%
• Year-on-year growth:
• Hospital revenue: 22%
• EBITDA: 32%
• Inpatient and surgery counts increased by 22% and 14%, respectively.
• Home Care Services revenue increased by 62%.
• International expansion in UAE and Bangladesh.
Challenges and Strategic Plans
• Implant business faced delays in new product launches affecting revenue.
• Plans to:
• Enhance engineering team
• Accelerate product launches
• Strengthen sales force
• Focus on operational efficiency and cost reduction
Franchise Business Growth
• Successful operationalization of SOCE franchise unit in Ranchi (60 beds).
• Significant growth in surgeries and revenue:
• Surgeries: 116% year-on-year increase
• Revenue: 104% year-on-year increase
• Plans to establish over 40 more franchise hospitals in India within 3-4 years.
Financial Metrics
• Record consolidated revenues: 243 Crores (17.5% year-on-year growth).
• Standalone hospital revenues: 223 Crores (22% year-on-year increase).
• Diversification into other medical specialties while maintaining focus on orthopedics.
Supply Chain and Inventory Management
• Supply chain issues affecting implant business revenue.
• Inventory levels managed to align with sales plans for Q3 and Q4.
• Ongoing efforts to resolve supply chain disruptions and maintain surgeon relationships.
Market Expansion and Future Growth
• Negotiations to supply the Japanese market and exploring opportunities in Korea.
• Plans to expand sales force in the U.S. and strengthen the team in India.
• Targeting a $100 million revenue goal over the next five years.
Conclusion
• Commitment to cover current year's sales shortfall in the next budget.
• Projected hospital segment revenue target: 900 Crores.
• Discussion on profitability of different business models and appreciation for participant engagement.

Submission Details
• Date of submission: July 25, 2023
• Conference call date: July 21, 2023
• Submitted to: National Stock Exchange of India and BSE
Financial Performance Highlights
• Hospital Business:
• Strong year-on-year growth in inpatient and surgery counts.
• Improved occupancy rates.
• Achieved 150,000 joint replacement surgeries.
• Home Care Business:
• 70% year-on-year revenue increase.
• Knee and Hip Implant Manufacturing:
• Faced challenges with lower revenues due to product launch delays.
Key Executives' Insights
• Sushobhan Dasgupta (Vice Chairman):
• Focus on operational efficiencies and growth strategies.
• Anticipates 50% growth in the implant segment for the full year.
• Confirmed an order from Indonesia valued between $350,000 to $500,000.
• Parag Agarwal:
• Reported 44% increase in surgeries and 31% rise in revenue for the SOCE franchise.
• Plans to open a new 60-bed hospital in Ranchi, Jharkhand.
• Amit Pathak (CFO):
• Consolidated revenue of INR 240 crores, up 15% quarter-on-quarter.
• PAT of INR 21 crores, reflecting a 50% increase.
Growth Projections
• Franchisee Business:
• 40% year-on-year growth reported.
• Home Care Segment:
• Projected to grow to 5% of the hospital's top line in 2-3 years.
Strategic Concerns and Responses
• Anup Ramachandra's Concerns:
• Raised issues regarding the implant business's strategic risks and management experience.
• Sushobhan Dasgupta's Reassurances:
• Emphasized his extensive background in orthopedics and the recruitment of a strong team.
• Discussed a five-year strategic roadmap focusing on processes and market share in the U.S.
Capital Expenditure Plans
• Estimated capex for Mumbai: INR 150-200 crores.
• Estimated capex for Nashik: INR 50-70 crores.
• Plans to increase operational beds from 1,260 to 2,000.
Raw Material Sourcing
• Raw materials sourced from U.S., Germany, and Europe.
• 90% of vitamin E polyethylene plastics from a U.K. supplier.
Conclusion
• Strong performance in Q1, particularly in the hospital business.
• Optimism for future growth across all segments.
• Invitation for further questions via email.

Key Financial Highlights
• Inpatient and Surgery Growth:
• 24% increase in inpatient counts
• 18% rise in surgery counts
• Revenue Growth:
• 21% growth in hospital revenue
• 13% increase in EBITDA for Q4 FY23
• Full-Year Performance:
• Total revenue of Rs 827 crores, up 16% from FY22
• Q4 revenue reached Rs 208 crores, a 25% increase
Strategic Initiatives
• Occupancy and Brand Recognition:
• Implementation of healthcare camps and digital marketing
• Franchise Expansion:
• Addition of two new franchise units, totaling four
• Plans for over 50 franchise hospitals across India
Business Segments Performance
• Homecare Services:
• 38% growth reported
• Knee and Hip Implant Manufacturing:
• Revenues tripled with positive EBITDA achieved
• US Implant Business:
• Over threefold growth to Rs 94 crores
Future Growth Strategies
• Focus on:
• Hospital business expansion
• SOCE franchise growth
• Home care services
• Target of USD 100 million in the implant business within five years
Management Insights
• Investment in US Business:
• Necessary capital investments for operational needs and capex
• EBITDA and PBT Clarifications:
• Depreciation and interest costs affecting PBT
• Pricing and Competition:
• Need for diverse implant sizes in the US market
• Strategies to regain lost customers and improve margins
Operational Insights
• Capacity Utilization:
• Current utilization at 60-65%
• Plans to increase external sales as confidence grows
• Revenue from Franchises:
• Four operational units with varying revenue recognition
Challenges and Considerations
• Employee Costs:
• Rising costs attributed to normal increments and additional manpower
• Market Dynamics:
• Price elasticity differences between India and the US
• Anticipated 10% price increase in India due to inflation
Conclusion
• Management expressed confidence in sustaining growth rates and improving operational efficiency, with a focus on strategic investments and market expansion.

Company Overview
• Date of Call: January 19, 2023
• Submission Date: January 24, 2023
• Key Participants:
• Dr. Vikram Shah (Chairman and Managing Director)
• Mr. Venkat Parasuraman (Chief Financial Officer)
• Parag Agarawal (Chief Business Officer)
Financial Performance
• Standalone Revenues: Increased by 17% year-on-year to INR 179 crores.
• Consolidated Revenues: Grew by 25% to INR 207 crores.
• EBITDA: Rose by 23% to INR 39 crores.
• PAT: Increased by 52% to INR 19 crores.
• Net Cash Balance: INR 150 crores.
Business Segments
• Hospital Business:
• Strong performance with significant year-on-year growth in inpatient counts and revenue.
• Conducted over 270 healthcare camps; expanded home care services by 42%.
• Plans to increase bed capacity from 1,260 to 2,000.
• Implant Manufacturing:
• Steady growth; received ISO 13485 certification.
• Monthly revenues from the US implant business reached $1 million.
• Plans to increase production and expand into new markets.
Strategic Initiatives
• Expansion Plans:
• Aim to establish 50 franchise hospitals in the next three years.
• Focus on an asset-light model through new SOCE units.
• Growth Projections:
• 20% growth in hospital business over the next three years.
• Implant business projected to reach $100 million in five years.
Market Position and Competitive Landscape
• Patents: 50 patents allowing rapid market entry, positioning ahead of competitors.
• Market Share: Small share in the U.S. orthopedic market but targeting customer dissatisfaction with larger competitors.
• Production Capacity: Current capacity of 60,000 units per year, with potential expansion.
Financial Strategy
• Free Cash Flow: Approximately INR 70-80 crores annually, expected to grow by 20%.
• Capital Expenditure: INR 400-500 crores needed for investments over the next few years.
• Funding: Plans to fund growth through internal cash flows without borrowing for at least two years.
Management Insights
• Robotic Surgery: Emphasis on the importance of skilled surgeons over robotic assistance in complex procedures.
• Occupancy Rates: Typical peak occupancy between 70%-80%, with a healthy average of 65%-75%.
• Future Discussions: Management open to further discussions and clarifications post-call.