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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesShalby Limited has a growing operating base but a more leveraged balance sheet. Consolidated revenue and EBITDA rose in FY2025-26, yet finance costs and depreciation left profit after tax at only ₹346.86 million. By Q1 FY2027, reported net debt had reached ₹4,636 million and EBITDA margin was 14.5%. The stock therefore requires two tests at once: whether hospitals and the medtech business can expand cash earnings, and whether that growth can outpace the cost and risk of the additional debt.
This analysis uses consolidated figures unless explicitly labelled otherwise. FY2025-26 refers to the completed year reported in 2026; Q1 FY2027 refers to the quarter identified by Shalby’s investor presentation.
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What Shalby does and why the business mix matters
Shalby Limited is listed as NSE: SHALBY and BSE: 540797. Its investor-relations materials describe a multi-specialty hospital group with 11 tertiary hospitals and more than 2,000 beds. In addition to hospital services, the group discloses pharma and franchise activities and Shalby MedTech’s implant business.
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That mix affects how investors should read the accounts. Hospitals are generally asset-intensive: beds, operating theatres, equipment and clinical staff require continuing investment before revenue is generated. A medtech operation can have a different margin, working-capital and growth profile, while pharma or franchise revenue may not carry the same economics as owned hospital capacity. Consolidated revenue growth is therefore useful, but it does not by itself reveal which activity is driving earnings or cash flow.
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FY2025-26 financial snapshot
The Economic Times’ 2026 financial summary reports higher consolidated revenue and EBITDA for FY2025-26 than for FY2024-25.
| Consolidated measure | FY2024-25 | FY2025-26 | Change |
|---|---|---|---|
| Revenue from operations | ₹10,869.55 million | ₹11,414.29 million | ₹544.74 million, approximately 5.0% |
| EBITDA | ₹1,602.02 million | ₹1,695.42 million | ₹93.40 million, approximately 5.8% |
| Finance cost | Not stated for comparison year in the cited summary | ₹389.95 million | — |
| Depreciation and amortization | Not stated for comparison year in the cited summary | ₹699.87 million | — |
| Profit before tax | Not stated for comparison year in the cited summary | ₹605.59 million | — |
| Profit after tax | Not stated for comparison year in the cited summary | ₹346.86 million | — |
On the FY2025-26 figures, EBITDA margin was approximately 14.9% (₹1,695.42 million divided by ₹11,414.29 million), while PBT margin was about 5.3% and PAT margin about 3.0%. Those derived margins show the difference between operating profit and what remains for shareholders.
Why EBITDA does not translate directly into PAT
Finance cost of ₹389.95 million consumed roughly 23% of FY2025-26 EBITDA. Depreciation and amortization of ₹699.87 million represented about 41% of EBITDA. These are not interchangeable expenses: interest reflects financing choices and debt pricing, while depreciation reflects the accounting allocation of the capital invested in hospitals and equipment. Together they explain why ₹1,695.42 million of EBITDA converted to ₹605.59 million of PBT and ₹346.86 million of PAT.
For a hospital operator, depreciation is economically relevant because medical assets must eventually be replaced or upgraded. An investor should therefore examine maintenance and expansion capital expenditure and operating cash flow alongside EBITDA, rather than treating EBITDA as distributable cash.
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Debt has increased materially
Shalby’s Q1 FY2027 investor presentation reports gross borrowings of ₹5,509 million, cash and equivalents of ₹873 million, net debt of ₹4,636 million and debt/equity of 0.46x. The Q1 FY2025 presentation reported net debt of ₹1,680 million and debt/equity of 0.18x.
| Balance-sheet measure | Q1 FY2025 presentation | Q1 FY2027 presentation | Direction |
|---|---|---|---|
| Net debt | ₹1,680 million | ₹4,636 million | Increase of ₹2,956 million, approximately 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 increase makes refinancing, interest rates, debt maturities and cash generation central to the investment case. Net debt is not automatically negative: borrowing can create value if it funds hospitals or capacity that earns returns above the cost of capital. The risk rises when new assets take longer to ramp, operating margins fall or cash is tied up in working capital. Because the cited presentations do not provide a complete maturity schedule or interest-rate breakdown here, those items should be checked in the latest filing before making a debt-service forecast.
Margins: the latest quarter raises a monitoring issue
Shalby’s Q1 FY2027 presentation shows revenue of ₹3,386 million and EBITDA of ₹490 million, implying a 14.5% EBITDA margin. The Q1 FY2025 presentation showed revenue of ₹2,886 million, EBITDA of ₹549 million and a 19.02% EBITDA margin.
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|---|---|---|---|
| Q1 FY2025 | ₹2,886 million | ₹549 million | 19.02% |
| Q1 FY2027 | ₹3,386 million | ₹490 million | 14.5% |
Revenue was higher in the periods represented, but EBITDA and margin were lower in the later presentation. That is a warning about profitability quality, not proof of a permanent decline: one quarter can be affected by case mix, seasonality, start-up costs, salary timing, payer mix or consolidation changes. The correct test is whether subsequent quarters restore margin and whether operating cash flow follows EBITDA.
The same Q1 FY2027 presentation lists FY2026 revenue of ₹11,168 million and FY2026 EBITDA of ₹1,600 million, or a 14% EBITDA margin. Those presentation figures differ from the audited-style FY2025-26 summary figures of ₹11,414.29 million revenue and ₹1,695.42 million EBITDA. They should not be blended into one series without checking the presentation’s period definition and consolidation scope. For the latest completed-year discussion, the Economic Times figures are used above; the presentation numbers are retained as management-period context.
How to value SHALBY without using a stale multiple
A defensible valuation requires the share price, current diluted share count, latest net debt and the earnings period selected. Market-ratio pages are time-sensitive, and the supplied figures do not include a live price. It would therefore be misleading to state a current P/E or EV/EBITDA multiple here. Refresh the calculation on the date of analysis using the NSE or BSE quote and the latest company filing.
| Metric | Calculation | What it tells you |
|---|---|---|
| P/E | Share price ÷ trailing twelve-month diluted EPS | Equity value paid for reported earnings; highly sensitive to a low or temporarily depressed PAT |
| EV/EBITDA | (Market capitalization + gross debt − cash) ÷ trailing EBITDA | Values operations before financing; useful when comparing companies with different leverage |
| Price-to-book | Share price ÷ latest diluted book value per share | Market premium or discount to accounting net assets; interpret cautiously for hospitals and intangible assets |
| Free-cash-flow yield | Free cash flow to equity ÷ market capitalization | Cash return to equity holders after operating needs and capital expenditure |
Use consolidated numbers consistently. Pair the latest market capitalization with the same date’s debt and cash, and use a clearly labelled trailing or forward earnings period. If a finance portal shows a different multiple, check whether it uses standalone accounts, annualized quarterly earnings, adjusted profit or an outdated price.
Adjustments that matter for Shalby
- Leverage: Net debt of ₹4,636 million means an equity-only multiple can understate the value burden carried by lenders. EV/EBITDA should be read with debt/equity and interest coverage.
- Margin direction: A 14.5% Q1 FY2027 EBITDA margin deserves a lower confidence level than a stable multi-year margin. A recovery case and a persistent-compression case can produce very different fair values.
- Medtech and pharma mix: Segment revenue, margins and capital intensity should be separated where the filing provides them. A hospital multiple may not fit every consolidated rupee of EBITDA.
- ROCE: Compare return on capital with the company’s cost of debt and the return available from new beds or facilities. More borrowing without improving ROCE can destroy value even when revenue grows.
- Earnings quality: Reconcile EBITDA to operating cash flow, then subtract maintenance and expansion capital expenditure. PAT alone does not show whether debt can be reduced.
Peer comparison: what to put beside Shalby
A useful Indian hospital comparison is not a single P/E league table. Build a peer set with similar ownership and reporting bases, then keep consolidated and standalone figures separate. Compare the following on the same trailing period:
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- Revenue growth and the contribution from new capacity.
- EBITDA margin and whether it is expanding or contracting.
- PAT margin after depreciation and interest.
- ROCE and return on equity.
- Net debt/EBITDA, debt/equity and interest coverage.
- Occupancy, average revenue per occupied bed and asset utilization where disclosed.
- Hospital, medtech and pharma/franchise mix.
- P/E, EV/EBITDA and price-to-book using the same market date.
Shalby’s combination of higher disclosed leverage and a lower recent quarterly margin means it should not receive a premium simply because revenue is rising. A premium could be justified if management demonstrates durable margin recovery, strong cash conversion and returns on new investment; a discount is rational if debt-funded growth produces weak ROCE or recurring refinancing pressure.
What could improve the investment case
- Several quarters of EBITDA margin recovery toward or above the FY2025-26 level.
- Operating cash flow that consistently covers maintenance capital expenditure and begins reducing net debt.
- Higher utilization of the existing 11-hospital, more-than-2,000-bed network without disproportionate staff or overhead growth.
- Medtech or pharma/franchise growth that adds profit without requiring hospital-level capital intensity.
- Lower finance cost through debt repayment, refinancing or improved borrowing terms.
- ROCE improvement as newer assets mature.
Risks that can invalidate a bullish thesis
- Leverage risk: Net debt has risen from ₹1,680 million in the Q1 FY2025 comparison to ₹4,636 million in Q1 FY2027. Higher rates, weak cash generation or refinancing delays would pressure PAT.
- Margin risk: Q1 FY2027 EBITDA margin of 14.5% was below the 19.02% shown for Q1 FY2025. Continued compression would reduce the earnings available to service debt.
- Capital-intensity risk: Depreciation of ₹699.87 million in FY2025-26 highlights the scale of the asset base; replacement and expansion spending can make free cash flow much lower than EBITDA.
- Mix and consolidation risk: Group results combine hospitals with medtech and pharma/franchise activities. Segment changes can make headline growth look stronger or weaker than the underlying hospital trend.
- Execution risk: New beds, facilities or products may take time to reach target utilization, while costs begin immediately.
A practical quarterly monitoring checklist
- Download the latest consolidated results and investor presentation, and record revenue, EBITDA, PBT, PAT and operating cash flow.
- Recalculate EBITDA margin and PAT margin; compare both with FY2025-26 and the preceding quarter.
- Update gross debt, cash, net debt, debt/equity, interest expense and the debt maturity profile.
- Separate hospital, medtech and pharma/franchise performance wherever segment disclosures permit.
- Check occupancy, bed additions, payer mix and asset utilization indicators disclosed by management.
- Calculate maintenance and growth capital expenditure, then compare free cash flow with scheduled debt repayment.
- Refresh market capitalization, P/E, EV/EBITDA, price-to-book and free-cash-flow yield using the same date and accounting basis.
- Reassess whether the share price already discounts margin recovery and deleveraging, rather than assuming either outcome.
Bottom line for a fundamental investor
Shalby’s FY2025-26 fundamentals show approximately 5% revenue growth and 5.8% EBITDA growth, but only a 3% PAT margin after ₹389.95 million of finance cost and ₹699.87 million of depreciation. The balance sheet is the key change in the investment case: Q1 FY2027 net debt of ₹4,636 million and debt/equity of 0.46x are materially above the earlier comparison. The 14.5% Q1 FY2027 EBITDA margin adds a second concern because growth must now be accompanied by margin recovery and cash conversion.
SHALBY can be fundamentally attractive if hospitals and medtech generate improving ROCE, sustained operating cash flow and measurable deleveraging. Until those are demonstrated, valuation should be calculated from refreshed market data and tested against conservative margin and debt assumptions, not justified by revenue growth alone.
Frequently Asked Questions
Is Shalby fundamentally strong?
The business has positive revenue and EBITDA growth, but its latest disclosed leverage and 14.5% quarterly EBITDA margin make the conclusion conditional. Strength depends on margin recovery, cash generation and debt reduction.
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What was Shalby’s FY2025-26 revenue and EBITDA?
Consolidated revenue from operations was ₹11,414.29 million and consolidated EBITDA was ₹1,695.42 million, according to The Economic Times’ 2026 financial summary.
How much net debt does Shalby have?
The Q1 FY2027 investor presentation reports gross borrowings of ₹5,509 million, cash and equivalents of ₹873 million and net debt of ₹4,636 million.
Why can’t a current P/E be stated here?
P/E changes with the share price, diluted share count and earnings period. A reliable figure must be refreshed with the latest NSE or BSE price and filing rather than using a stale market-ratio page.
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