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Shalby’s fundamentals are mixed rather than unequivocally strong. Consolidated revenue and EBITDA increased in FY2025-26, but finance costs and depreciation consumed much of the operating profit before it reached shareholders. At the same time, the latest investor presentation shows a materially higher net-debt balance than the earlier comparison period, while Q1 FY2027 EBITDA margin was 14.5%. The stock can only be judged at a reasonable valuation after refreshing the share price, earnings, book value and enterprise value with the latest filings.
What Shalby does
Shalby Limited is listed on the NSE as SHALBY and on the BSE as 540797. Its investor-relations disclosures describe a multi-specialty hospital group operating 11 tertiary hospitals with more than 2,000 beds. The consolidated business also includes pharmaceutical and franchise activities and Shalby MedTech’s implant business.
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That mix matters when analysing the stock. Hospital revenue, implant sales and pharma or franchise income can have different growth rates, margins, working-capital needs and capital intensity. A consolidated profit figure therefore does not represent a pure hospital operating model. Any peer comparison should identify whether the peer numbers are standalone or consolidated and whether medtech or other non-hospital activities are included.
FY2025-26 financial snapshot
The Economic Times reported the following consolidated figures for FY2025-26 and FY2024-25. Amounts are in ₹ million; ₹10 million equals ₹1 crore.
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| Consolidated measure | FY2025-26 | FY2024-25 | Year-on-year change |
|---|---|---|---|
| Revenue from operations | ₹11,414.29 million (₹1,141.43 crore) | ₹10,869.55 million (₹1,086.96 crore) | 5.0% increase |
| EBITDA | ₹1,695.42 million (₹169.54 crore) | ₹1,602.02 million (₹160.20 crore) | 5.8% increase |
| Finance cost | ₹389.95 million | Not stated in the cited figures | Not stated |
| Depreciation and amortization | ₹699.87 million | Not stated in the cited figures | Not stated |
| Profit before tax | ₹605.59 million | Not stated in the cited figures | Not stated |
| Profit after tax | ₹346.86 million | Not stated in the cited figures | Not stated |
Revenue rose by about 5.0%, while EBITDA grew about 5.8%. On the reported numbers, FY2025-26 EBITDA margin was approximately 14.9%, versus about 14.7% in FY2024-25. That is a small improvement in the full-year calculation, not evidence of a decisive margin expansion cycle.
Why EBITDA does not equal earnings
EBITDA excludes interest, tax, depreciation and amortization. Shalby’s FY2025-26 finance cost of ₹389.95 million was about 23% of EBITDA. Depreciation and amortization of ₹699.87 million was about 41% of EBITDA. After those charges and other items, ₹1,695.42 million of EBITDA converted into ₹605.59 million of profit before tax and ₹346.86 million of profit after tax.
On the reported consolidated figures, PBT margin was approximately 5.3% and PAT margin approximately 3.0%. PAT represented only about one-fifth of EBITDA. This conversion gap is central to the investment case: operating profit can grow while equity earnings remain vulnerable to borrowing costs, asset depreciation, taxation and non-operating items.
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Debt and balance-sheet direction
Shalby’s Q1 FY2027 investor presentation reported gross borrowings of ₹5,509 million, cash and equivalents of ₹873 million, net debt of ₹4,636 million and debt-to-equity of 0.46 times. The Q1 FY2025 presentation had reported net debt of ₹1,680 million and debt-to-equity of 0.18 times.
| Balance-sheet indicator | Q1 FY2025 presentation | Q1 FY2027 presentation | What changed |
|---|---|---|---|
| Net debt | ₹1,680 million | ₹4,636 million | Increase of ₹2,956 million, or roughly 176% |
| Debt/equity | 0.18x | 0.46x | Higher financial leverage |
| Gross borrowings | Not stated in the cited comparison | ₹5,509 million | Latest disclosed amount |
| Cash and equivalents | Not stated in the cited comparison | ₹873 million | Latest disclosed amount |
The two presentations are different reporting periods, so the comparison is directional rather than a like-for-like annual balance-sheet bridge. Even with that qualification, the latest disclosed leverage is materially higher and deserves more attention than the earlier 0.18x debt-to-equity level.
What higher debt changes for shareholders
- Interest sensitivity: higher borrowings can raise finance costs when rates increase or when debt is refinanced.
- Cash-flow priority: operating cash must fund interest, maintenance capital expenditure and scheduled repayments before it is available for expansion or distributions.
- Execution risk: new beds, hospitals or medtech capacity may take time to reach target utilization, leaving debt in place before earnings arrive.
- Valuation effect: enterprise value includes net debt, so equity investors should not rely on an equity multiple alone.
- Refinancing risk: maturity dates, lender terms and the mix of fixed and floating-rate debt can materially alter future earnings; those details are not stated in the cited figures and should be checked in the latest filing.
Using the latest net debt of ₹4,636 million and FY2025-26 EBITDA of ₹1,695.42 million gives an approximate net-debt-to-EBITDA ratio of 2.7 times. This is only an analytical cross-period approximation because the debt figure is from Q1 FY2027 and the EBITDA figure is a completed-year number. Investors should recalculate the ratio with trailing-twelve-month EBITDA and the same reporting date.
Are Shalby’s margins improving?
The answer depends on the period selected. The audited-style FY2025-26 financial summary shows a modest full-year EBITDA-margin improvement to roughly 14.9% from 14.7% in FY2024-25. The quarter-to-quarter presentation comparison points in the opposite direction.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute| Period | Revenue (₹ million) | EBITDA (₹ million) | EBITDA margin |
|---|---|---|---|
| Q1 FY2025 presentation | 2,886 | 549 | 19.02% |
| Q1 FY2027 presentation | 3,386 | 490 | 14.5% (rounded) |
| FY2025-26 consolidated financial summary | 11,414.29 | 1,695.42 | 14.9% (calculated) |
Q1 FY2027 revenue was higher than the Q1 FY2025 presentation, but EBITDA was lower and the margin fell by roughly 4.5 percentage points. The presentations do not establish a complete multi-year quarterly trend, and seasonality, consolidation scope and one-off effects can influence a single quarter. Treat 14.5% as a monitoring signal rather than proof that the full-year margin will remain at that level.
The same Q1 FY2027 presentation shows FY2026 revenue of ₹11,168 million and EBITDA of ₹1,600 million, implying a 14% EBITDA margin. Those figures differ from the FY2025-26 consolidated financial-summary amounts of ₹11,414.29 million revenue and ₹1,695.42 million EBITDA. The difference may reflect presentation period definitions, cut-off dates or consolidation scope. For the latest completed year, use the consolidated figures reported by The Economic Times; use the presentation figures to understand how management presented the period and to track subsequent quarterly disclosures.
How to assess Shalby’s earnings quality
Start with operating growth
Check whether revenue growth is coming from higher hospital occupancy, increased average revenue per occupied bed, new capacity, surgical volumes, implant sales or the pharma and franchise businesses. Revenue growth without utilization or cash-flow improvement is less durable than growth supported by better asset productivity.
Trace EBITDA to PAT
Reconcile EBITDA with depreciation, finance costs, tax and exceptional items. For Shalby, the FY2025-26 bridge shows why the headline EBITDA number should not be used as a proxy for shareholder earnings.
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Compare operating cash flow with EBITDA and PAT, then subtract maintenance and expansion capital expenditure. A hospital group can report accounting profit while cash is absorbed by receivables, inventory, construction or interest payments. The cited figures do not provide free cash flow, so a current analysis must obtain cash-flow statements from the latest filing.
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Separate hospital and medtech economics
Implant manufacturing or distribution may carry a different gross-margin profile from hospitals and may require different working capital. Pharma and franchise revenue may also be less capital intensive than owned hospitals. Segment disclosure should be used to determine which activity is driving consolidated growth.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Valuation: a practical framework
A reasonable valuation cannot be stated from the supplied financial figures alone because the live share price, current share count, trailing EPS, book value and current enterprise value are not provided. Market-ratio pages are time-sensitive; a multiple captured on one date can become stale after a price move or a new filing.
| Metric | Formula | How to use it for Shalby |
|---|---|---|
| P/E | Share price ÷ trailing or forward EPS | Use consolidated EPS and specify the period. Low P/E can reflect leverage or weak earnings quality rather than a bargain. |
| EV/EBITDA | (Market capitalization + net debt) ÷ EBITDA | Useful when comparing different debt levels, but use a matching date and consistent EBITDA definition. |
| Price-to-book | Market capitalization ÷ shareholders’ equity | Relevant for an asset-heavy hospital operator, provided asset values and impairment risks are considered. |
| Free-cash-flow yield | Free cash flow ÷ market capitalization | Tests whether reported earnings become distributable cash after capital expenditure and working-capital needs. |
| Net debt/EBITDA | Net debt ÷ trailing EBITDA | Measures leverage; recalculate with same-period debt and trailing EBITDA rather than mixing quarters and years. |
Building a current valuation sheet
- Record the latest NSE or BSE closing price and the date.
- Multiply price by the latest diluted shares outstanding to obtain market capitalization.
- Add latest gross borrowings and subtract cash and equivalents to calculate net debt and enterprise value.
- Use trailing-twelve-month consolidated EBITDA, PAT, EPS and operating cash flow from the latest filings.
- Calculate P/E, EV/EBITDA, price-to-book and free-cash-flow yield.
- Compare the results with Indian hospital operators using the same accounting basis and valuation date.
- Run sensitivity cases for margin recovery, flat margins and further debt growth rather than relying on one target multiple.
What to compare with hospital peers
A useful peer table should include revenue growth, EBITDA margin, PAT margin, return on capital employed, net debt/EBITDA, occupancy or other disclosed asset-utilization measures, and valuation multiples. It should also show whether each company owns hospitals, manages them, manufactures implants or reports pharma income.
Shalby’s higher disclosed leverage means an apparently similar EV/EBITDA multiple may imply a different equity risk from a peer with a stronger balance sheet. Conversely, a medtech contribution could justify a different growth or margin profile from a hospital-only company. Do not compare Shalby’s consolidated P/E with a peer’s standalone P/E, or mix quarterly EBITDA with annual net debt, without clearly labelling the mismatch.
Key risks and potential positives
Risks to monitor
- Net debt and debt-to-equity are materially above the earlier presentation levels.
- Finance costs and depreciation substantially reduce EBITDA-to-PAT conversion.
- Q1 FY2027 EBITDA margin of 14.5% is below the 19.02% shown for Q1 FY2025.
- Hospital expansion can require substantial capital before new capacity reaches mature utilization.
- Consolidated results can obscure weaker performance in a specific hospital, segment or geography.
- Valuation multiples can change quickly with the share price and with revised earnings estimates.
Potential positives
- FY2025-26 consolidated revenue increased to ₹11,414.29 million.
- FY2025-26 EBITDA increased to ₹1,695.42 million.
- The group has a diversified platform spanning tertiary hospitals, implants and pharma or franchise activities.
- Margin recovery, stronger cash generation and debt reduction would improve earnings quality and financial flexibility.
Investor monitoring checklist
- Update revenue, EBITDA, PBT and PAT after every quarterly and annual filing.
- Track EBITDA margin against the 14.5% Q1 FY2027 reference and the approximately 14.9% FY2025-26 full-year calculation.
- Recalculate gross debt, cash, net debt, debt-to-equity and net-debt-to-EBITDA on the same date.
- Review finance cost, interest coverage and the maturity or refinancing profile of borrowings.
- Check operating cash flow, capital expenditure and free cash flow rather than relying on EBITDA.
- Look for hospital occupancy, average revenue per occupied bed, bed additions and segment profitability where disclosed.
- Refresh P/E, EV/EBITDA, price-to-book and free-cash-flow yield using the current market price.
- Compare every ratio with peers on a consistent consolidated or standalone basis.
Verdict
Shalby delivered genuine FY2025-26 operating growth: revenue rose about 5.0% and EBITDA about 5.8%. However, ₹389.95 million of finance cost and ₹699.87 million of depreciation left PAT at ₹346.86 million, so the balance-sheet and earnings-conversion story is more important than EBITDA growth alone. The latest disclosed net debt of ₹4,636 million and debt-to-equity of 0.46x are materially higher than the earlier comparison, while Q1 FY2027 margin compression adds uncertainty.
For investors, the appropriate conclusion is not “cheap” or “expensive” without a live price and current filings. Shalby becomes a stronger fundamental case if it sustains revenue growth, restores margins, converts EBITDA into cash and reduces leverage. Until those indicators improve, valuation should include a clear discount for debt, depreciation and the mixed hospital-medtech-pharma business model.
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