Shares of Shalby, a multi-speciality hospitals chain, gained strongly during Wednesday's trade after the company signed an agreement with Divine Super Specialty Hospital Pvt. Ltd., a leading hospital in Ranchi, to establish a Franchise-Owned Shalby-Managed (FOSM) hospital in the region.
"As per the terms of the Agreement, Shalby Limited will provide its expertise, operational guidance, specialist doctor services, supply chain, and Learning & Development Support to facilitate the establishment and smooth functioning of the hospital. Divine Super Specialty Hospital Pvt. Ltd (Franchisee) will be responsible for the day‐to‐day operations of the hospital," the company said in an exchange filing.
Following the positive development, the stock began the session positively at ₹170.60 apiece and strengthened further to reach a new 52-week high of ₹181, up by 8% from the previous closing price of ₹167.55.
Shalby is one of the leading multi-speciality chains of hospitals and tertiary care centres in India, offering treatment in over 35 medical disciplines, holding an aggregate capacity of over 2,062 beds with more than 500 active physicians and more than 3,000 employees, its website shows.
The company's shares in the current month so far have rallied nearly 29%, and in the current year so far, the stock has soared 16.5%. In recent March, ace investor Porinju Veliyath bought a 0.56% stake in the company at an average price of ₹117 apiece.
Following the company's Q4FY23 performance, domestic brokerage firm ICICI Direct Research in its May note maintained its 'buy' recommendation on the stock with a 12-month target price of ₹170 apiece. However, the stock reached the brokerage's target price within a month.
During the March quarter, the company received the license approval to sell implants in Indonesia. It launched a product called TUKS (Tahoe Unicompartmental Knee) in the US and India. Further, Shalby added new franchises in Lucknow and Gwalior under the SOCE model, as highlighted by the brokerage.
In Q4FY23, Shalby reported a 15.38% rise in its consolidated net profit to ₹13.9 crore as compared to ₹10 crore in Q4FY22. The revenue from operations during the same quarter came in at ₹199 crore, a surge of 22% from ₹163 crore in the corresponding quarter of the last fiscal.
The brokerage highlights that Shalby holds a significant market share of approximately 15% in arthroplasty procedures, making it a market leader in joint replacement surgeries among organized private corporate hospitals.
The brokerage also noted that the expansion of the arthroplasty and orthopaedics division to include cardiac science, oncology, and neuro-science, with an additional 40% bed capacity, will support organic growth.
The company aims to achieve 2.5x sales in the next three to five years by expanding to 50 franchises, improving occupancy rates, and introducing new service offerings such as home care and Shalby Care Cards, according to the brokerage.
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