Hold Shalby; target of Rs 100: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on Shalby

Q2FY21 results were better than expectations on all fronts. Revenues grew 201% QoQ to Rs 115.6 crore (Rs 38.4 crore in Q1FY21) on the back of a revival in patient footfalls, higher surgeries count, better occupancy. EBITDA margins were at 25.5% vs. -12.6% in Q1 due to better overall operational performance QoQ stemming from cost rationalisation measures. Hence, Shalby posted EBITDA of Rs 29.5 crore (vs. EBITDA loss of Rs 4.8 crore in Q1). PAT for the quarter was at Rs 24.5 crore vs. a loss of Rs 8.7 crore in Q1FY21.

Outlook

However, skewed margins, weak return ratios still remain major deflators. We arrive at a target price of Rs 100 based on SOTP by valuing hospitals (above six years) at 8x FY23E EV/EBITDA and hospitals (below six years) at 1x FY23E EV/sales.

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