Disclaimer - The information provided on this blog is for general informational purposes only and represents the personal opinions and experiences of the author. It is not intended as investment, financial, legal, or tax advice. All investment strategies and investments involve risk of loss. Readers are advised to conduct their own research and seek independent professional advice before making any investment decisions. The blog owner and contributors are not registered investment advisers, and past performance is not indicative of future results. The use of any information provided is solely at your own risk.
Company Overview
Shalby is a leading healthcare group headquartered in India, primarily known for its strong presence in multispecialty hospital services and as a global leader in joint replacement surgery. Founded by Dr. Vikram Shah in 1994 as a small orthopedic center in Ahmedabad, it has rapidly expanded to operate a network of 16 hospitals across 13 Indian cities and 8 states, serving numerous medical specialties beyond orthopedics.
Key Facts
- Shalby specializes in orthopedics and joint replacements, and is recognized as one of the world's largest centers for such surgeries.
- The hospital group has undertaken more than 100,000 joint replacement surgeries to date, utilizing innovative techniques such as the "ZERO Technique" that dramatically reduces surgical time.
- In addition to joint replacements, Shalby offers a wide range of tertiary and quaternary care in fields such as cardiology, oncology, neurology, and renal transplantation.
- Shalby Ltd is a publicly traded company with a market capitalization of ₹2,598 crore as of 2024.
Expansion and Innovation
- Shalby MedTech, a division of the group, is a global MedTech company based out of California, USA, focused on designing and manufacturing advanced orthopedic implants and instruments.
- The group continues to expand its business verticals, aiming to further transform both the Indian and global medical landscape.
Locations
Shalby has a strong presence in cities such as Ahmedabad, Rajkot, Surat, Vapi, Indore, Gwalior, Jabalpur, Jaipur, Lucknow, Ranchi, Mohali, and more.Its flagship hospital in Ahmedabad has grown from a six-bed center to a multi-hospital chain with over 200 beds in its main facility.
Shalby’s reputation for clinical quality, innovation, and international patient care has cemented its place as a cornerstone in India’s modern healthcare infrastructure. Information Source
|
Segment |
H1 FY25 |
FY24 |
FY22 |
|
In-Patient & Day-Care Count |
46,699 |
85,363 |
56,065 |
|
Out-patient Count |
2,78,137 |
4,85,897 |
3,18,455 |
|
Surgeries Count |
16,529 |
30,031 |
20,240 |
|
ARPOB (In Rs) |
41,072 |
37,517 |
31,347 |
|
Average Length of Stay (Days) |
3.65 |
3.83 |
4.55 |
|
Occupancy Rate |
48% |
46% |
46% |
|
Segment |
Q2 FY25 Mix |
FY22 Mix |
|
Arthroplasty |
34% |
29% |
|
Critical Care & General Medicine |
12% |
22% |
|
Cardiac Science |
10% |
8% |
|
Oncology |
10% |
9% |
|
Orthopaedic |
9% |
8% |
|
Neurology |
6% |
5% |
|
Nephrology |
6% |
3% |
|
Other |
13% |
16% |
Implants Business (10% in H1 FY25 vs 4% in FY22):The company manufactures knee and hip implants through Shalby Advanced Technologies, Inc., based in California, USA, with an annual production capacity exceeding 80,000 components. These implants are distributed across the USA, Japan, and Indonesia. Segment revenue grew 150% from FY22 to FY24, driven by a significant rise in production, reaching 4,600 units per month. The company aims to grow the implant segment into a USD 100 million business. [10] [11] [12]
Segment Revenue Mix Q2 FY25
a) Geography-Wise::
India: 70%
USA: 30%
b) Product-Wise:
Knee: 84%
Hip: 16% [13]
Specialization in Arthroplasty
The company has completed over 1,50,000 joint replacement procedures and has emerged as the global leader in joint replacements by volume. It is India's largest center of Joint replacement surgeries with a 15% market share in the organized market. [3]
On-Going Expansion
The company is undertaking a greenfield expansion project to establish a 175+ bed healthcare facility for Asha Parekh Hospital in Santacruz, Mumbai, with a capital expenditure of Rs. 160 Cr, expected to become operational by 2027-28. Additionally, it is investing Rs. 31 Cr in medical equipment for a 146-bed hospital in Nashik. [14]
Acquisition
In Jan 2024, the company invested ₹102 Cr for an 87% stake in PK Healthcare, the holding company of Sanar International Hospital, and ₹104 Cr for a 100% stake in Healers Hospital Pvt Ltd. to support its Sanar acquisition in Gurugram. Sanar has a 130-bed capacity, expandable to 180 beds with additional investment, and specializes in advanced surgical care, including transplants and cancer treatment. Serving over 60 countries, it generates 70% of its business from international markets.[15]
Asset-Light Franchise Model
The company operates an asset-light franchise business model under the Shalby Orthopedics Centre of Excellence (SOCE) brand, featuring two operational models: Franchise Owned Shalby Operated (FOSO) and Franchise Owned Shalby Managed (FOSM). As of FY24, it has launched four franchise units, with a new SOCE in Rajkot commencing operations in August 2024. The company plans to establish over 40 SOCEs across India within the next 3-4 years. [16] [17]
Debt
The total debt has increased to Rs. 463 Cr as of Q2 FY25 from Rs. 155 Cr in FY22. [18]
Focus
The company aims to achieve an additional $8 million in sales growth for its implants business by offering the right products in key markets, including Southeast Asia, 5 countries in Latin America, Russia, and other regions with higher reimbursement rates. [19] It focuses to doubling ROCE in coming years due to operational leverage. [20]
Reason To Hold this Scrip for 10-15 years
Age Group Distribution (2025)
- Under 15 years: About 29.7% of the total population (roughly 434 million people).
- 15–64 years: About 64.9% (about 948 million people).
- 65 years and above: Around 5.5% (over 80 million people).
Key Demographic Insights
- Half of India's population is under the age of 30, making it one of the world's youngest major countries.
- Around 65% of the population is below 35 years of age, giving India a demographic dividend compared to older economies like China and the US.
- The elderly (65+ years) population, although currently a small fraction, is expected to rise rapidly in coming decades.
|
Age Group |
% of Population |
Approximate Numbers (Millions) |
|
0-14 years |
29.7% |
434 |
|
15-64 years |
64.9% |
948 |
|
65+ years |
5.5% |
80 |
The demand for hip and knee replacements in India is expected to grow significantly over the next 10 to 15 years, driven by an aging population, increasing prevalence of osteoarthritis, obesity, and greater awareness of treatment options.
Prevalence and Projections:
- The pooled prevalence of knee osteoarthritis among elderly Indians (60+ years) is about 47%, with higher rates in urban areas and females.
- Studies estimate that osteoarthritis affects about 22-39% of the Indian population in certain age groups, indicating a large pool of potential candidates for joint replacement.
- The Indian knee replacement market is projected to grow at a compound annual growth rate (CAGR) of around 9% through 2030, fueled by demographic shifts and increasing demand for surgery.
Number of Surgeries Forecast:
- While exact estimates vary, models from global and Indian research indicate the total number of hip and knee arthroplasty procedures in India could increase by 40% or more over the next decade.
- Market analyses suggest that India’s orthopedic large joint devices market, which includes hip and knee replacements, is growing at roughly 8.9% annually, implying a substantial rise in surgeries performed.
Estimated Demand:
- Given India's population demographics, aging trends, and osteoarthritis prevalence, it's estimated that in the next 10-15 years, several million Indians will require hip and knee replacements. Some projections suggest a need for millions of such surgeries, potentially in the range of 2-5 million or more, although precise figures from Indian-specific epidemiological data are limited.
- The rise in obesity and trauma cases also contributes to this growing demand.
Summary:
India will likely see a multifold increase in hip and knee replacement surgeries within the next 10-15 years due to high osteoarthritis prevalence among its growing elderly population, market growth rates of about 8-9%, and ongoing improvements in healthcare access and technology.
If a more exact number estimate is desired, a deeper epidemiological model considering India's aging population growth and osteoarthritis prevalence could refine this projection further. However, current data strongly indicates a significant surge in demand for joint replacement surgeries in India soon. Information Source
Comments
Post a Comment