Shalby Q1 FY27: Hospital occupancy improves, Gurugram turns EBITDA positive, MedTech works through margins

/n# Shalby Q1 FY27: Hospital occupancy improves, Gurugram turns EBITDA positive, MedTech works through margins

Shalby Limited started FY27 with higher consolidated revenue and a mixed profitability picture. Consolidated total revenue rose to INR 338.6 crore in Q1 FY27 from INR 303.4 crore in Q1 FY26, while EBITDA was largely flat at INR 49.0 crore versus INR 48.5 crore. Profit before tax declined to INR 19.7 crore from INR 22.7 crore, but profit after tax improved to INR 10.5 crore from INR 7.7 crore.

The quarter captured three moving parts at once. The core hospital network saw better utilisation, Shalby International in Gurugram delivered its first EBITDA positive quarter since acquisition, and the MedTech business showed strong revenue growth but still low consolidated EBITDA. Management commentary on the earnings call leaned heavily on operating leverage in hospitals, a time-bound ramp-up at Gurugram, and cost and working capital actions in MedTech.

Consolidated performance: growth led by hospitals, margins remain work in progress

On a consolidated basis, Shalby reported Q1 FY27 revenue of INR 338.6 crore and EBITDA margin of 14.5%, compared with 16.0% a year ago. PAT margin stood at 3.1% versus 2.5% in Q1 FY26.

The segment mix shows why consolidated margins can look choppy. According to the investor presentation’s consolidated breakup for Q1 FY27, the hospitals, pharma and franchise cluster contributed 78.32% of revenue, while MedTech contributed 13.92% but only INR 0.17 crore of EBITDA for the quarter. Shalby International accounted for 7.75% of revenue and delivered positive EBITDA.

The balance sheet snapshot in the deck reports gross borrowings of INR 550.9 crore and cash and cash equivalents of INR 87.3 crore, resulting in net debt of INR 463.6 crore. Debt-equity stood at 0.46x. Annualised ROCE was presented at 6.7%.

Hospital business: occupancy improves, margin reset attributed to doctor additions

Standalone hospital revenue grew to INR 259.1 crore in Q1 FY27 from INR 242.2 crore, a 7.0% year-on-year increase. Standalone EBITDA, however, fell to INR 47.8 crore from INR 52.4 crore, bringing EBITDA margin down to 18.4% from 21.6%.

Management described the margin pressure as temporary, linked to deploying new doctors and adding specialties that take time to reach mature utilisation. In the call, the CFO said the company expects EBITDA margins to improve as new capacity and new hires ramp up, and he guided to an EBITDA margin of up to 20% for FY27 at the hospital level.

Operationally, the hospital network showed better utilisation in Q1 FY27. In-patients increased 6.2% year on year to 23,895, and total surgeries rose 3.5% to 9,326. Occupied beds increased 9.8% to 701 and occupancy rate improved to 51% from 45%. The deck also notes occupancy excluding PK Healthcare at 54%.

ARPOB declined modestly to INR 44,711 from INR 45,673, and the payor mix shifted toward government business. In Q1 FY27, self-pay was 30%, TPA and insurance was 38%, and government was 32%, compared with 36%, 40% and 24% respectively in Q1 FY26.

Management acknowledged that a higher government mix can compress ARPOB and complicate collections. It said the increase also reflects rate renewals and work to secure better pricing, including super-specialty rates at certain units. It also referenced improved internal processes and tools for billing and follow-up.

A specialty mix shift is visible as well. Arthroplasty remained the largest specialty, but its share reduced to 35% from 41% a year ago. Oncology increased to 12% from 9%. This diversification is aligned with the company’s stated strategy of maintaining leadership in joint replacement while expanding into cardiac science, oncology, neuro-science, critical care, general medicine and transplants.

The company also disclosed transplant volumes on the call: 47 transplants in the quarter, including 41 kidney, 5 liver and 1 bone marrow transplant.

Shalby International (Gurugram): first EBITDA positive quarter, PBT still negative

Shalby International reported revenue of INR 26.23 crore in Q1 FY27, up from INR 23.25 crore in Q1 FY26. EBITDA improved sharply to INR 1.82 crore from INR -3.18 crore. PBT and PAT remained negative at INR -3.98 crore.

Operationally, the deck highlights ARPOB of INR 91,326, ALOS of 3.80 days and occupancy of 24% for the 130-bed facility. It also states that 42% of revenue came from international patients, with patients from over 60 countries.

Management framed the quarter as an inflection point, calling the EBITDA break-even the first since acquisition and stating it expects the improvement to be sustainable. It guided that occupancy could reach 30% or higher by Q3 or Q4 FY27. It also said it expects to be PBT positive around the end of Q3 or in Q4, within 6 to 9 months, supported by specialty additions and improving international inflows.

MedTech: revenue scales, profitability and inventory remain the key watch items

Shalby MedTech consolidated revenue increased to INR 47.17 crore in Q1 FY27 from INR 30.83 crore in Q1 FY26, and from INR 40.27 crore in Q4 FY26. Yet consolidated EBITDA was only INR 0.17 crore in Q1 FY27, down from INR 3.72 crore in Q4 FY26.

The MedTech table in the presentation breaks out performance by entity. SMTL, the India entity, nearly doubled revenue to INR 36.10 crore and posted EBITDA of INR 2.94 crore. SAT Inc. in the US delivered revenue of INR 32.81 crore but EBITDA was negative at INR -0.60 crore. The Singapore entity posted EBITDA of INR 0.58 crore.

On the call, management attributed weaker MedTech profitability partly to forex movements and said US volumes were stable rather than growing. It described vendor and operational initiatives that should reduce cash flow requirement by about INR 3 crore per month, with a further reduction of another INR 3 crore per month by Q4 FY27 once fully implemented. Management also stated that the objective is to build a MedTech business with stronger margins, higher asset productivity and better cash conversion.

Inventory remains a central issue. The investor presentation shows MedTech days of inventory to sales improving to 651 days in Q1 FY27 from 934 days in FY26. Total consolidated inventory stood at INR 337.4 crore in Q1 FY27. Management said inventory holding days are expected to improve by about 30% and emphasised working capital discipline.

Capital allocation and ROCE: near-term focus on sweating assets

In the presentation, Shalby highlights prudent capital allocation and a preference for revenue-sharing models where it acts as an O and M partner. It also states that about 40% of total bed capacity is available to support organic growth with limited capex.

On the call, the CFO linked low ROCE to heavy capex in recent years, including bunker facilities, robotics and MedTech investments. The company’s ROCE was presented at 6.7% on a consolidated basis and 9.4% on a standalone hospital basis for Q1 FY27 annualised.

Mumbai expansion was discussed but remained early-stage. Management said discussions with trustees are underway, and any development would be shared with stakeholders. No capex outlay or commissioning timeline was disclosed in the call.

Key takeaways from Q1 FY27

Shalby’s quarter can be read as a two-track story. Hospitals are showing improving occupancy and surgical throughput, and the Gurugram unit has moved into positive EBITDA with a stated timeline toward PBT break-even. At the same time, MedTech is scaling strongly in India but consolidated profitability remains thin, with inventory and forex sensitivity continuing to shape investor questions.

Management’s near-term signposts are clear in the call: an FY27 hospital EBITDA margin aspiration of around 20%, Gurugram occupancy rising toward 30% by the second half, and MedTech margin improvement tied to cost actions expected to play out by Q4 FY27. For investors, the next few quarters are likely to revolve around whether operating leverage in hospitals persists and whether MedTech converts scale into sustainable profitability and cash conversion.