SPA Research has come out with its report on Shalby Company IPO , The research firm has recommended to “ Subscribe ” the IPO in its research report as on December 04, 2017.
Shalby Hospitals is one of the leading multi-specialty chain of hospitals in India. The hospitals are tertiary care hospitals, few of which also offer quaternary healthcare services to patients in various areas of specialization such as orthopedics, complex joint replacements, cardiology, neurology, oncology, and renal transplantations. The company provides inpatient
and outpatient healthcare services through eight fully operational hospitals, having an aggregate operational bed count of 781 beds, as on March 31, 2017. This apart, it currently provides outpatient consultative healthcare services through three hospitals which were recently set up. Its 11 hospitals, inclusive of eight fully operational and three hospitals which were recently set up, have an aggregate bed capacity of 2,012 beds, as on March 31, 2017.Outlook and Valuation
Since FY12, the company has experienced a steady growth in providing
orthopedic and non-orthopedic healthcare services, maintaining
higher margins and RoE than its peers because of several costefficiency
measures, such as procurement of medical consumables, lower capital expenditure per bed, higher beds to operation theatre, and better space utilization. This helps the company achieve EBITDA positive levels for new hospitals in less than two years. The company's revenues, EBITDA and PAT have grown at a CAGR of 7.9%, 5.1% and 16.8% respectively, between FY14-17. The company has showcased healthy EBITDA margins in the range of 20-25% consistently. At the upper price band of INR 248/share, the issue is valued at a PE of 35x with FY17 Adj.EPS of INR 7.0. We recommend to SUBSCRIBE to the issue as a good long term investment.
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