Buy Shalby; target of Rs 180: ICICI Direct

ICICI Direct's research report on Shalby

Started by renowned orthopaedic surgeon Dr Vikram Shah, Shalby is a multi-specialty hospitals chain with expertise in joint replacement. Revenue-wise breakup Q3FY23: Arthroplasty: 43%, Critical care & General medicine: 9%, Cardiac science: 9%, Orthopaedic: 8%, Oncology: 10%, Neurology: 5%, Nephrology: 4%, Others: 11% • Shalby registered a blended ARPOB of Rs 36,291 and ALOS of 3.74 days (without day care procedures) in Q3FY23 • Acquisition of US based Consensus to diversify into related implant business besides supporting arthroplasty and orthopaedic segments.

Outlook

We maintain BUY due to 1) Diversification towards other specialities especially high end surgeries 2) Asset light model via franchisee drive, 3) Launch of implant business in newer geographies and ramp up of production likely to aid growth. We value Shalby at Rs 180 based on SOTP valuation.