1. Macroeconomic Overview
1.1 Global Macroeconomic Overview
Global economic growth and the business environment
The global economy proved resilient through 2025, yet the year closed under a distinct shadow. World output is estimated to have grown by about 3.2% in 2025, easing to around 3.1% in 2026, below the long-run average.IMF Growth was supported by stronger activity in large emerging markets, an investment surge linked to artificialintelligence and digital infrastructure, and a gradual easing of financial conditions. Advanced economies expanded by roughly 1.6% developing economies by a little over 4%, continuing to drive the bulk of world growth.IMF
The most consequential development of the year was the outbreak of conflict in West Asia, which lifted oil prices, raised shipping and insurance costs and added fresh uncertainty to trade and investment. International institutions revised global growth lower for 2026 and 2027 on the back of higher energy prices and weaker confidence.IMF For a healthcare group, the practical effects were felt mainly through input costs, the price of imported medical devices, and the flow of international patients from the affected region.
Inflationary trends and cost pressures
Global headline inflation continued to recede towards central-bank targets in most advanced economies, though it remained somewhat sticky in the United States, firmerenergy and the and commodity prices that followed the West Asia conflict tempered the disinflation story. IMF Healthcare providers everywhere face cost pressure from clinical wages and advanced equipment, with medical inflation typically running ahead of general inflation, which reinforces the case for operating efficiency and for locally manufactured, cost-competitive devices.
Interest rates and the financing environment
Major central banks broadly eased policy through 2025 as inflation moderated, improving the cost and availability of capital for capital-intensive sectors such as hospitals. The re-emergence of energy-driven inflation risk late in the year prompted a more cautious, data-dependent stance. IMF A gradually normalising rate environment is supportive of the healthcare infrastructure cycle, lowering the cost of funding new beds, equipment and technology, while a measured pace of easing keeps balance-sheet discipline in focus.
Demographic change and an ageing population
The world is undergoing a demographic transition unprecedented in human history. The population aged 60 and older is growing faster than any younger age group, driven by rising life expectancy and falling fertility rates. By 2030, 1 in 6 people in the world will be aged 60 years or over. WHO The headline figures, all from the World Health Organization, are these: the share of the population aged 60 years and over will increase from 1 billion in 2020 to 1.4 billion [by 2030]. By 2050, the worlds population of people aged 60 years and older will double (2.1 billion). Put as proportions, between 2015 and 2050, the proportion of the worlds population over 60 years will nearly double from 12% to 22%. WHO
The "oldest old" cohort is expanding fastest of all. The number of persons aged 80 years or older is expected to triple between 2020 and 2050 to reach 426 million.
Rising burden of non-communicable diseases
Non-communicable diseases, including cardiovascular disease, cancer, diabetes, chronic respiratory illness and degenerative joint disorders, now account for the majority of the global disease burden and tend to rise with income levels and urbanisation. Demand for healthcare services linked to lifestyle-related diseases such as cardiac ailments, cancer and diabetes is set to climb, with orthopaedics an emerging segment within this trend. In India, diabetes cases are projected to approach 93 million by 2030 and the prevalence of obesity continues to rise, each a powerful driver of demand across cardiac sciences, nephrology, oncology and orthopaedics. ICMR-INDIAB
Healthcare expenditure and investment trends
Healthcare commands a growing share of national output and household budgets worldwide. In the third quarter of 2025 alone, the pharma, hospital and biotech sectors recorded 72 deals worth about US$3.5 billion, a sharp increase that reflects strong investment momentum.IBEF
Healthcare technology and digital transformation
Technology is reshaping how care is planned, delivered and monitored. Robotic-assisted surgery, three-dimensional printing of patient-specific implants, digital surgical planning, electronic health records, tele-consultation and the early use of artificial intelligence in diagnostics are improving precision, shortening recovery and lowering the total cost of care. Indias digital-health market is growing at around 25% a year and its telehealth segment at roughly 21%.IBEF In orthopaedics, robotic platforms and navigation systems are raising implant longevity and reducing revision rates, a trend the Company has embraced early.
Medical device and healthcare supply-chain dynamics
The global medical-device supply chain remained a focus through the year. Concentration of manufacturing, episodes of input-material tightness and higher cross-border logistics costs, aggravated by the West Asia conflict, underscored the value of localised, vertically integrated manufacturing.IMF In India, imports continue to meet a large majority of medical-device and orthopaedic-implant demand, a dependence that government policy is actively seeking to reduce and that creates a clear opening for credible domestic and integrated manufacturers DoP .The Companys implant vertical, with a facility in California and distribution across India and South-East Asia, is positioned to benefit from this re-evaluation of supply-chain resilience.
Regulatory and policy environment
Healthcare is among the most regulated of industries, and the global direction of travel is towards stronger quality and safety standards, greater price transparency, tighter device approval and a steady expansion of publicly funded coverage. These developments raise the bar for clinical governance and accreditation, areas in which established, accredited operators enjoy an advantage, while widening the insured population that can access organised care.
Healthcare workforce challenges
A persistent global shortage of doctors, nurses and allied health professionals continues to constrain capacity and push up wages. India is investing to address this, with around 818 medical colleges now operating and roughly 43 added in 2025-26, alongside a large nursing-education base and a healthcare workforce that has crossed six million.IBEF Providers that can train, attract and retain clinical talent hold a structural edge, and the Companys academic and training initiatives are designed precisely to address this constraint.
Medical tourism and cross-border healthcare
Cross-border healthcare continued to expand, driven by cost differentials, clinical quality and waiting times in source countries, with India among the most competitive destinations for advanced, affordable treatment. Indias medical-value-travel market is estimated at about US$8.7 billion in
2025 and is projected to reach roughly US$16.2 billion by 2030, with more than 4.5 lakh patients visiting India between January and November 2025.IBEF During the year, however, the West Asia conflict disrupted patient flows from parts of the Middle East, a headwind felt across the industry, even as inflows from Africa and the Commonwealth of Independent States (CIS) provided an offset.
Insurance coverage and healthcare accessibility
The expansion of health insurance, both government-funded and private, remains the single most important lever for widening access to organized care. Indias health-insurance premiums rose to about 1,18,688 crore in FY25 from 1,09,007 crore in FY24, and as coverage deepens, out-of-pocket spending falls and patients increasingly seek treatment at accredited facilities.IRDA
Geopolitical risks and global uncertainty
Geopolitics moved to the center of the macroeconomic narrative in FY2025-26. Beyond the West Asia conflict and its effect on energy prices, shifting trade policy and tariff uncertainty weighed on investment sentiment For the Company, the most direct exposures are imported device and consumable costs, currency movements and the volume of international patients, each of which is actively monitored and managed.
Outlook for the global healthcare sector, and the shifts that matter most
Despite near-term uncertainty, the medium-term outlook for global healthcare remains among the most attractive of any sector, supported by ageing populations, the rising burden of non-communicable diseases, technological advance, deepening insurance coverage and rising health awareness. Within this, three shifts are particularly relevant to the Company: the migration of value towards medical technology and devices; the continued broadening of clinical portfolios by leading providers; and a decisive consumer shift towards organized, accredited, technology-enabled care. The Companys clinical brand strength, its orthopedic and arthroplasty franchise, and its growing implant-manufacturing capability position it well against each of these trends.
1.2 Indian Economic Overview
India remained the fastest-growing major economy. Provisional Estimates, the growth rate in Real GDP during 2025-26 is estimated at 7.7% as compared to 7.1% in 2024-25. In level terms, Real GDP is estimated to attain a level of 323.12 lakh crore in the FY 2025-26, against the First Revised Estimate of GDP for the year 2024-25 of 299.89 lakh crore, while Nominal GDP is estimated to attain a level of 346.36 lakh crore in the year 2025-26, against 318.07 lakh crore in 2024-25 a nominal rise of about 8.9%. Momentum held into year-end: Real GDP in Q4 of FY 2025-26 grew 7.8% year-on-year. Ministry of Statistics and Programme Implementation
Growth was broad-based and led by industry and services. The manufacturing sector expanded by 10.7% in FY26 (compared to 9.3% in FY25), and the contact-intensive sector comprising trade, repair, hotels, transport, and communication quickened to an 11% growth rate in FY26 from 6.6% in the previous fiscal. On the demand side, both private consumption and investment were firm, with Private Final Consumption Expenditure growing 7% while Gross Fixed Capital Formation rose 8.2%, indicating stronger demand and investment. The primary (agriculture-led) sector grew more modestly at about 3.2%. Drishti IASInsightsIAS
A defining feature of the year was exceptionally low inflation. Headline CPI for nine consecutive months to reach an 8-year low of 1.6% in July 2025, and recorded 0.7% in November and 1.3% in December 2025, with food prices in deflation. Full-year CPI is estimated at around 2%, well inside the RBIs 2 6% band. Against this backdrop the RBI eased policy: it cut the repo rate by 25 bps at the December meeting to 5.25%, then held at 5.25% in February 2026 with a neutral stance. Press Information Bureau
Growth was broad-based. Manufacturing expanded in double digits and the contact-intensive services cluster of trade, hotels, transport and communication grew at around 11%, while agriculture posted moderate growth of about 3%. On the demand side, private final consumption grew around 7% and gross fixed capital formation rose more than 8%, signaling a healthy investment cycle supported by sustained public capital expenditure. MoSPI
A defining feature of the year was exceptionally benign inflation. Headline Consumer Price Index inflation fell sharply through the first half, touching an eight-year low of about 1.6% in mid-2025 on a prolonged decline in food prices, and stayed comfortably within the Reserve Bank of Indias 2 to 6% tolerance band for most of the year.RBI The rationalization of the Goods and Services Tax into a simpler structure from late September 2025 eased consumer prices further, and full-year inflation is estimated at around 2%, which the Economic Survey described as a rare combination of strong growth and low inflation.
Against this backdrop, the Reserve Bank of India eased policy through 2025, bringing the repo rate down to 5.25% by December 2025, and thereafter held a neutral stance as it weighed the inflation risks from the West Asia conflict. External balances stayed healthy: the current account deficit narrowed to a small fraction of GDP, remittances and services exports remained strong, foreign direct investment inflows were firm, and the rupee was among the least volatile emerging-market currencies.RBI
The Government maintained its emphasis on capital expenditure and infrastructure while continuing fiscal consolidation, and Indias growth is expected to remain among the fastest of any major economy over the medium term, keeping the country on track to become the worlds third-largest economy. For healthcare, the mix of resilient growth, rising incomes, low inflation and an easing rate cycle is favorable, supporting both discretionary health spending and the financing of fresh capacity. IMF
Indias external position and capital markets remained supportive through the year. Foreign-exchange reserves stayed ample, the rupee was comparatively stable, and equity markets continued to attract domestic and foreign flows, keeping the cost of capital reasonable for well-run companies. Rising household incomes and financial savings, together with deepening health-insurance penetration, are steadily expanding the pool of patients able to access organized, quality care, a trend from which accredited multi-specialty providers such as the Company are well placed to benefit.RBI
1.3 Industry Overview, Structure and Developments
Healthcare is among the largest and fastest-growing sectors of the Indian economy. The overall market was valued at about US$372 billion in 2023 and is estimated to have approached US$638 billion in 2025, with health spending expected to rise from roughly 3.3% of GDP towards 5% by the end of the decade. Hospitals and clinics form the largest segment, at around 40% of the market.
IBEF
The industry remains highly fragmented, with a long tail of standalone hospitals and nursing homes alongside a consolidating set of corporate chains. Three structural shifts are reshaping it: a steady migration of patients from unorganised to organised, accredited providers; the deepening of organised care into Tier-2 and Tier-3 cities; and a growing emphasis on asset-light, capital-efficient expansion. The Company is an active participant in each.
The private sector accounts for the larger share of hospital capacity and tertiary care in India and is expected to lead capacity addition over the coming years, supported by rising insurance coverage, growing demand for specialised care and continued investor interest. Consolidation is gathering pace as larger groups acquire regional assets and extend their networks, raising the importance of scale, clinical depth and brand. Within this, the Companys strategy of pairing a differentiated orthopaedic core with capital-efficient franchise and management models is designed to let it participate in this consolidation without compromising returns on capital.IMARC
A widening healthcare ecosystem: high-growth adjacencies
Around the hospital core, several adjacent segments are growing faster than the ~12% pace of the overall market, and together they describe the broader ecosystem in which an integrated provider operates. Each is driven by the same structural forces - chronic-disease burden, an ageing population, deepening insurance, rising incomes, and a young, smartphone-enabled consumer base - but at different speeds.
Diagnostics is the largest of these adjacencies. As of 2024, the India diagnostics services market is valued at USD 35.4 billion, with a CAGR of 13.4% from 2024 to 2030, reflecting increasing demand due to a rise in chronic disease prevalence and technological advancements. A clear shift is underway from clinic-based to at-home and at-scale testing, supported by mobile collection and automated lab workflows.Nexdigm
Home healthcare is one of the fastest-growing adjacencies as post-operative care, ICU-at-home and rehabilitation move into the home. Estimates vary by methodology, but a mid-range view puts the market at USD 11.90 billion in 2025, growing at a CAGR of 18.13% to reach USD 27.38 billion by 2030, driven by rising disposable incomes, an aging population, increasing prevalence of chronic diseases, and advancements in technology.
Mordor IntelligenceMordor Intelligence
Digital health and telemedicine is the fastest-growing adjacency. The India digital health market was estimated at USD 17.81 billion in 2025 and is projected to reach USD 106.97 billion by 2033, growing at a CAGR of 25.12%, propelled by the Ayushman Bharat Digital Mission, rising smartphone use and demand for remote monitoring. The scale of the digital backbone is already striking: the Ayushman Bharat Digital Mission has created over 670 million ABHA accounts and linked 420 million health records. Research And MarketsResearch And Markets
Medical devices is a large, import-dependent market and the one most directly relevant to Shalbys implant vertical. Indias medical devices market size is projected to grow more than threefold to USD 50.1 billion by 2030, up from USD 15.2 billion in 2025, a CAGR of 26.9%, driven by policy support, rising investments, and growing healthcare demand. Crucially for the import-substitution thesis, the sector continues to be highly import-dependent, with 70 80% of domestic demand met through imports, particularly in technologically advanced segments. BW Health
The table below brings these adjacencies together, illustrating an ecosystem whose fastest-growing segments cluster around technology, the home and preventive care, all areas the Company is positioned to participate in
| Segment | Growth context / opportunity indicator | Source |
| Hospitals & healthcare delivery | Hospitals account for nearly 80% of the overall healthcare market. Indias hospital market was valued at US$98.98bn (2023), projected to reach US$193.59bn by 2032 at an 8.0% CAGR. India has only 1.3 hospital beds per 1,000 people against a global median of 29 per 10,000, and needs 3 million additional beds by 2025 to reach 3 beds/1,000 — a large under-bedding opportunity for organised players. | IBEF |
| Diagnostics services | Demand is propelled by rising chronic-disease burden, preventive testing and a decisive shift to at-home and at-scale collection. The diagnostic-imaging-equipment segment is set to grow from US$2.06bn (2025) to US$3.01bn by 2030 ( 7.9% CAGR); the broader diagnostic-equipment market is targeted to reach US$6bn by 2027, up from US$4bn (CY23). | IBEF |
| Orthopaedic implants / MedTech | The medical-devices sector is targeted to reach US$50bn by 2030 (from US$15.2bn in 2025). Critically, 70 80% of demand is currently met by imports, and government policy — the National Medical Device Policy 2023, PLI scheme ( US$400mn) and MedTech Mitra is explicitly aimed at import substitution, creating a clear runway for integrated domestic manufacturers. | IBEF / DoP |
| Home healthcare | Driven by an ageing population (60+ projected to roughly double to 347mn by 2050), the shift from communicable to chronic/lifestyle disease, rising incomes and demand for post-operative and ICU-at-home care; home delivery can save patients 20 50% versus institutional care. | IBEF |
| Digital health | The fastest-growing adjacency: valued at US$8.79bn (2024) and projected to reach US$47.80bn by 2033 at a 17.67% CAGR, propelled by the Ayushman Bharat Digital Mission (670mn+ ABHA accounts, 420mn+ linked health records), rising smartphone/ internet penetration and government telemedicine platforms like eSanjeevani. | IBEF ? PIB |
The orthopaedics and orthopaedic-implant opportunity
Orthopaedics is among the most attractive sub-segments of Indian healthcare and is core to the Companys identity. Rising longevity, the growing prevalence of osteoarthritis and osteoporosis, higher rates of obesity and an increase in road and sports injuries are all driving demand for joint reconstruction, trauma fixation and spine procedures, with the knee and hip segments accounting for the largest share. DoP
India orthopedic implants market size reached USD 2.5 Billion in 2025. Looking forward, and the market to reach USD 5.2 Billion by 2034, exhibiting a growth rate (CAGR) of 7.92%. A critical feature is that imports meet close to 70% of demand, leaving the market dependent on global majors. DoP This dependence, combined with the Governments Make in India thrust, the Production
Linked Incentive scheme for medical devices and customs-duty relief on implant inputs, creates a compelling opening for credible domestic and integrated manufacturers. The Companys implant business sits directly within this opportunity.
Competitive structure and the Companys position
Organised tertiary care in India is served by a handful of large, well-capitalised multi-specialty chains alongside many regional and standalone providers. The Company competes with national groups such as Apollo Hospitals, Fortis Healthcare, Max Healthcare, Narayana Hrudayalaya and Aster, yet occupies a distinctive position. It is globally recognised in orthopaedics and joint replacement, performs over 15,000 joint-replacement surgeries a year and holds an estimated 15% share of Indias organised joint-replacement market, and it is the only Indian hospital group with an integrated, in-house orthopaedic-implant manufacturing capability.Shalby
| Dimension | Shalbys differentiated position |
| Clinical signature | Global leadership in arthroplasty; founders pioneering "Zero Technique"; 1,75,000+ cumulative joint replacements. |
| Vertical integration | Only Indian hospital group with in-house orthopaedic-implant design and manufacturing (Shalby MedTech). |
| Technology | Early and deep adoption of robotic surgery, with 20%+ of surgeries performed robotically. |
| Capital efficiency | Asset-light SOCE franchise extends the brand into new markets with limited capital. |
| Geography | Leadership across Western and Central India, with a Delhi-NCR international centre. |
Table 1.2: How the Company is positioned within a competitive industry. Source: Shalby; Company release.
1.4 Regulatory Environment and Government Schemes
Government policy is a powerful tailwind for organised healthcare in India, both through the expansion of publicly funded insurance and through targeted support for domestic manufacturing and infrastructure.
Ayushman Bharat and PM-JAY
Pradhan Mantri Jan Arogya Yojana (PM-JAY), the worlds largest publicly funded health-assurance scheme, provides cover of 5 lakh per family per year for secondary and tertiary hospitalisation to more than 12 crore families.NHA During the year the scheme continued to widen its reach, building on the landmark extension of coverage to all senior citizens aged 70 and above irrespective of income, and a further extension to gig workers. With more than 32,000 hospitals empanelled and over 1.78 lakh Ayushman Arogya Mandirs providing primary care, the scheme is materially expanding the insured base and channelling patients towards accredited providers.Ayushman Bharat
Government initiatives in the Union Budget 2025-26
The Union Budget for FY2025-26 allocated close to 1 lakh crore to the Ministry of Health and Family Welfare, taking healths share of the Budget to just under 2%.Budget Key measures of direct relevance to the sector included:
Cancer care: a commitment to set up day-care cancer centres in all district hospitals over three years, with 200 such centres targeted in FY2025-26, directly supportive of oncology, a specialty the Company is scaling.Budget
Affordable medicines: basic-customs-duty exemptions on a list of 36 life-saving drugs, including several for cancer and rare diseases, lowering the cost of treatment.Budget
Medical education and workforce: 10,000 additional medical-education seats in the year, towards a five-year goal of 75,000, alongside skilling centres for healthcare professionals.
Budget
Domestic manufacturing: continued support for medical-device and pharmaceutical manufacturing through the Production Linked Incentive scheme and duty relief on inputs such as special-grade steel and polyethylene used in orthopaedic implants.Budget
Health infrastructure and digital health: sustained funding for the PM Ayushman Bharat Health Infrastructure Mission and the Ayushman Bharat Digital Mission.PRS
Alongside fiscal measures, the regulatory architecture, including quality accreditation through NABH and NABL, device regulation under the CDSCO and Medical Device Rules, and price oversight by the National Pharmaceutical Pricing Authority, continues to raise standards across the sector. As an accredited, multi-specialty operator with an integrated device vertical, the Company is well placed to benefit from a regulatory environment that rewards quality and scale.
Beyond the central scheme, most states operate their own health-assurance programmes, and the Ayushman Bharat Digital Mission is building a national digital-health backbone of unique health identifiers, digitised records and tele-consultation. Together with rising private insurance, these initiatives are steadily formalising healthcare financing in India, increasing the share of care that is funded and delivered through accredited, organised providers. For the Company, this means a larger addressable patient pool, more predictable demand and a strong incentive to maintain the accreditation and digital readiness that scheme participation increasingly requires.Ayushman Bharat
1.5 Key Industry Trends, Structural Shifts and Growth Drivers
Five structural shifts, in the view of the management, will define the next phase of the industry and inform the Companys strategy:
Shift towards MedTech. Value within healthcare is migrating towards medical technology and devices, with robotic surgery, 3D-printed and patient-specific implants and digital planning becoming standard of care in orthopaedics, while import-substitution policy creates room for integrated domestic manufacturers.
Product-portfolio expansion. Leading providers are broadening beyond a single specialty into full multi-specialty and quaternary care, including oncology, cardiac sciences, nephrology and transplant, to capture a larger share of each patients lifetime spend and to de-risk revenue.
Brand strength and the technology advantage. Clinical brand, surgeon reputation and proprietary techniques are decisive in attracting patients, surgeons and referrals, and the Companys arthroplasty franchise and founders pioneering technique are durable assets.
Consumer trends. Patients are increasingly informed, insured and quality-conscious, and are migrating decisively towards organised, accredited, technology-enabled care, including in smaller cities where rising affordability is unlocking large, under-served markets.
Capital-efficient growth. Asset-light franchise and management models, day-care and short-stay formats, home healthcare and selective, profitability-led expansion are improving returns on capital across the industry.
Taken together, demographic ageing, the rising burden of non-communicable diseases, deepening insurance penetration, technological advance, supportive government policy and a decisive consumer shift towards organised care form a powerful and durable set of growth drivers, each of which aligns closely with the Companys strategic direction.
2. Company Overview
2.1 Heritage and evolution
Shalby Limited is one of Indias leading multi-specialty tertiary-care healthcare groups and is globally recognised for its excellence in orthopaedics and joint-replacement surgery. Founded by Dr. Vikram I. Shah, a world-renowned joint-replacement surgeon and the originator of the pioneering "Zero Technique" that transformed arthroplasty, the Company has grown from a six-bedded hospital established in 1994 into an integrated healthcare enterprise.Shalby Over three decades it has built one of the deepest orthopaedic franchises in the world, with a cumulative track record of more than 1,75,000+ joint-replacement surgeries and over 15,000 such surgeries performed each year.
2.2 An integrated, orthopaedic-led platform
Shalby today operates an integrated platform that spans the full orthopaedic and tertiary-care continuum, from diagnosis and specialist consultation through surgery and in-house implants to rehabilitation and home care. This integration of clinical services with implant manufacturing, unusual among Indian hospital groups, is the defining feature of the Shalby model and the foundation of its strategy to capture value across the care pathway.
The business is organised around three complementary engines:
Hospitals, Pharmacy and Franchise: the core multi-specialty tertiary-care network across more than 30 specialties, together with in-hospital pharmacy and the asset-light Shalby
Orthopaedics Centre of Excellence (SOCE) franchise.
Shalby MedTech: the orthopaedic-implant design, manufacturing and distribution business, with a facility in California and distribution across India and South-East Asia, addressing both domestic import-substitution and export markets.
Shalby International: the Delhi-NCR / Gurugram tertiary-care operation, a focused centre for international and quaternary care.
These are complemented by Shalby Academy, the Companys training and clinical-research arm, and a growing home-healthcare offering that includes ICU-at-home, diagnostics, pharmacy, nursing, physiotherapy and doctor visits.Shalby
2.3 Network and footprint
The Company operates a network of around 13 hospitals with over 2,200 beds across 10 cities, concentrated in Western and Central India where it is the largest corporate hospital group, with a tertiary-care presence in the National Capital Region. Its hospitals span more than 30 specialties, including orthopaedics and complex joint replacement, cardiac sciences, neurosciences, oncology, nephrology and renal transplantation, gastroenterology, critical care and mother-and-child care.
Shalby
2.4 Clinical leadership and differentiation
Beyond scale, the Companys differentiation rests on clinical depth. It is the largest joint-replacement centre of its kind, an early and deep adopter of robotic and minimally invasive surgery, and a centre that performed 70 organ transplants in the year and has crossed 525 cumulative transplants across its units.Shalby Its critical-care leadership was invited by the National Health Systems Resource Centre under the Ministry of Health and Family Welfare to help define national ICU quality standards, positioning Shalby as a clinical benchmark.
2.5 Corporate structure and milestones in FY2025-26
During the year the Company sharpened its structure and portfolio. It rationalised two EBITDA-negative units (Rajkot and Lucknow) to improve capital allocation, while reorganising its implant operations by transferring Shalby Advanced Technologies India into Shalby Medtech Limited to create a focused MedTech vehicle. It increased its stake in the Gurugram international hospital (PK Healthcare) to over 91% through a rights issue.Shalby On the clinical side, it commissioned oncology departments with advanced radiotherapy at its Krishna (Ahmedabad) and Surat units, installed PET-CT and radiotherapy capability across three units, secured a five-year kidney-transplant approval for the Krishna unit, and obtained NABH accreditation for the Gurugram international hospital.Shalby
2.6 Milestones in the Companys journey
| Year | Milestone |
| 1994 | Founded by Dr. Vikram I. Shah as a six-bedded hospital in Ahmedabad. |
| Early Years | Pioneering of the "Zero Technique" in joint-replacement surgery, building global recognition in arthroplasty. |
| 2017 | Initial public offering; listing on the NSE and BSE. |
| Growth Phase | Expansion into a multi-city, multi-specialty network and establishment of orthopaedic-implant manufacturing in California, USA. |
| 2025 | Acquisition of the Gurugram international hospital (Sanar / PK Healthcare);performanceoftheworldsfirst fully autonomous robotic joint-replacement surgery. |
| 2025-26 | Shalby MedTech turns EBITDA-positive; cumulative joint replacements cross 1,75,000+; NABH accreditation for the Gurugram unit; oncology and transplant capability expanded. |
Table 2.1: Selected milestones in the Companys evolution. Source: Shalby; Company release.
2.7 Material developments during FY2025-26
The principal developments during the year, each of which is reflected in the operating and financial review that follows, were:
Portfolio rationalisation: closure of the two EBITDA-negative units at Rajkot and Lucknow to improve capital allocation, while continuing selected services at those locations.Shalby
MedTech reorganisation: transfer of Shalby Advanced Technologies India into Shalby Medtech Limited to create a focused implant vehicle, and the turn to positive EBITDA in the implant business.
Consolidation of the international unit: an increase in the stake in the Gurugram international hospital (PK Healthcare) to over 91% through a rights issue, and NABH accreditation for that unit.
Clinical expansion: commissioning of oncology departments with advanced radiotherapy at the Krishna (Ahmedabad) and Surat units, installation of PET-CT and radiotherapy across three units, and a five-year kidney-transplant approval for the Krishna unit.
Technology leadership: performance of the worlds first fully autonomous robotic joint-replacement surgery and commissioning of robotic systems at two centres.Company release
Tax and leadership: election of the concessional tax regime under Section 115BAA and strengthening of the senior leadership team, including the finance function.
2.8 Recognition and leadership position
The Companys standing in Indian healthcare is reflected in its clinical leadership and external recognition. It is acknowledged as the largest joint-replacement centre of its kind, holds an estimated 15% share of Indias organised arthroplasty market, and performed the worlds first fully autonomous robotic joint-replacement surgery during the year.Company release Its critical-care expertise was sought by the National Health Systems Resource Centre to help shape national ICU quality standards, and its Gurugram international hospital secured NABH accreditation under the latest standards. Together these underline a reputation for clinical excellence that is central to the
Companys competitive position and to its ability to attract patients, surgeons and partners.Shalby
3. Strategy and Strategic Priorities
The Companys ambition is to roughly double its revenue from the FY2025-26 base of about 1,141.43 crore over the medium term, while improving returns on capital, by deepening its clinical core, scaling its differentiated implant business and expanding in a capital-efficient way.Shalby Managements strategy rests on five clear priorities:
Deepen the hospital core and lift case mix. Raise utilisation of the existing network, grow high-acuity surgical volumes (led by arthroplasty), and scale high-value specialties such as oncology, nephrology and transplant, cardiac sciences and neurosciences. This lifts revenue per occupied bed and broadens the revenue base beyond a single specialty.
Scale Shalby MedTech. Build the now-EBITDA-positive implant business into a flagship of Indias import-substitution opportunity, growing volumes across domestic and export markets and broadening the product portfolio, including planned new product launches.
Expand capital-efficiently. Extend the brand into under-served Tier-2 and Tier-3 markets through the asset-light SOCE franchise and management contracts, complemented by selective, profitability-led greenfield and brownfield additions such as the planned Mumbai (Santacruz) project.
Lead on technology and quality. Continue early adoption of robotic and minimally invasive surgery, digital health and clinical research, while maintaining the accreditation and clinical-governance standards that anchor the brand.
Maintain financial discipline. Improve return ratios, reduce gearing as MedTech and the international unit mature, and allocate capital only to opportunities that meet the Companys quality and return thresholds.
This strategy is deliberately built on the Companys structural advantages, its orthopaedic brand, its integrated implant capability and its capital-efficient bed addition, and is designed to compound value through cycles.
3.1 Capital-allocation framework
Capital allocation follows the same disciplined logic. The Company prioritises investments that strengthen its clinical core and brand, scale the high-return MedTech vertical, and extend reach through asset-light models, while maintaining a conservative balance sheet. The closure of two EBITDA-negative units during the year, alongside the move to a focused MedTech vehicle and the consolidation of the Gurugram operation, illustrates a readiness to reallocate capital away from underperforming assets towards higher-return opportunities. With gearing modest at about 0.44 times and MedTech now self-funding at the EBITDA level, the Company expects to fund its growth ambitions, including its stated aim of roughly doubling revenue over the medium term, from a balanced mix of internal accruals and prudent borrowing.Shalby
4. Opportunities, Threats and SWOT
4.1 Opportunities
Structural growth in orthopaedics. Ageing, rising non-communicable diseases and a doubling of the orthopaedic-implants market over the coming decade play directly to the
Companys arthroplasty leadership.
Import substitution in implants. With imports meeting about 70% of Indian implant demand and policy favouring domestic manufacturing, Shalby MedTech has a long runway in India and in export markets across South-East Asia, Africa and the CIS region. DoP
Specialty broadening. Scaling oncology, nephrology and transplant, and cardiac and neurosciences raises revenue per bed and deepens the case mix.
Tier-2 and Tier-3 penetration. Asset-light SOCE and management models extend the brand with limited capital, improving returns.
Insurance-led volume. The widening of PM-JAY and rising private insurance expand the funded patient base.Ayushman Bharat
Adjacencies. Fast-growing diagnostics, home healthcare and digital health offer capital-light avenues to extend the patient relationship beyond the hospital.
4.2 Threats and challenges
Geopolitical and international-patient risk. Conflict in West Asia disrupted inflows from the Middle East during the year, partly offset by Africa and the CIS region.Shalby
Cost and margin pressure. Clinical-talent costs, imported-device prices and the start-up costs of new specialties can compress margins in the near term.
Competitive intensity. Large, well-capitalised chains compete for patients, surgeons and acquisitions.
Regulatory and pricing risk. Price controls on devices and procedures, evolving device regulation and scheme reimbursement rates can affect realisations.
Execution risk. New units and the international and MedTech businesses take time to reach maturity and breakeven.
4.3 SWOT summary
| Strengths | Weaknesses | Opportunities | Threats |
| Global arthroplasty leadership; integrated implant manufacturing; strong brand; healthy balance sheet (0.44x | Concentration in orthopaedics and Western/Central India; international unit and MedTech still maturing; modest occupancy | Import substitution in implants; specialty broadening; Tier- 2/3 via franchise; insurance-led volume; adjacencies | Geopolitical/ international-patient risk; cost and pricing pressure; competition; execution risk on expansion |
Table 4.1: SWOT summary. Source: Shalby.
5. Operating Review and Segment Performance
The Company reports its business across three principal verticals: Hospitals, Pharmacy and Franchise; Shalby MedTech; and Shalby International. The revenue contribution of each in the fourth quarter of FY2025-26 is shown below.Shalby
5.1 Hospitals, Pharmacy and Franchise
The core hospital and pharmacy business remains the engine of the group, contributing close to 80% of consolidated revenue. The standalone hospital business performed steadily, with revenue growth supported by higher surgical volumes and an improving case mix. Arthroplasty, the Companys signature franchise, grew strongly, with surgeries rising more than 15% year-on-year in the fourth quarter to over 2,650 procedures. Total surgical volumes across the hospital network, by contrast, declined about 7% year-on-year in the fourth quarter, to around 6,900 procedures, mainly reflecting the closure of the Rajkot and Lucknow units, even as arthroplasty and other high-acuity volumes grew.Shalby Through the year the Company also expanded high-value specialties, commissioning oncology departments and installing PET-CT and radiotherapy capability, and performing 70 organ transplants (51 kidney and 19 liver), taking its cumulative transplant tally past 525.
Broadening the specialty mix is central to the hospital strategy. Alongside its orthopaedic core, the Company is scaling oncology (medical, surgical and radiation), nephrology and renal transplantation, cardiac sciences, neurosciences and critical care. These higher-acuity specialties raise revenue per occupied bed, lengthen the clinical relationship with patients and reduce reliance on any single service line. The commissioning of comprehensive cancer-care capability across multiple units, supported by advanced imaging and radiotherapy, and the growth of the transplant programme are clear evidence of this shift from a predominantly single-specialty model towards full multi-specialty tertiary and quaternary care.Shalby
5.2 Operating-metric deep dive
The Companys operating metrics improved through the year, reflecting a richer case mix and better utilisation:
| Operating metric | Q4 FY26 | Q4 FY25 | Trend |
| ARPOB ( / occupied bed / day) | 42,689 | 41,585 | +2.7% |
| Occupied beds (operational) | 649 | 633 | +2.4% |
| Occupancy rate | 48% | 46% | Improving |
| Average length of stay (days) | 3.6 | 3.9 | Improved |
| Arthroplasty surgeries | 2,650+ | 2,300 | +15.4% |
Occupancy rate is calculated on operational beds (649), not the Companys total installed bed capacity (2,300); on an installed-bed basis, the implied occupancy would be materially lower (~28%) Table 5.1: Selected hospital operating metrics, Q4 FY26 versus Q4 FY25. Source: Shalby.
Average revenue per occupied bed rose to around 42,700 per day on a richer case mix, occupancy recovered to about 48% by the fourth quarter, and a shorter average length of stay reflected improved clinical pathways and the growing share of robotic and minimally invasive procedures. The payer mix spans self-pay, private insurance and third-party administrators, government schemes such as PM-JAY and state programmes, and international patients, giving the business a balanced and resilient revenue base.
Payer and geographic diversification. This balance across payers is a source of resilience: self-pay and private-insurance volumes support realisations, government-scheme volumes add throughput and social reach, and international patients contribute high-value cases. Geographically, the Companys leadership across Western and Central India provides a stable core, while the Gurugram international centre and the export footprint of MedTech add diversification. The deliberate decision to exit two loss-making units, rather than pursue scale for its own sake, illustrates a consistent focus on the quality and profitability of revenue rather than on volume alone. Shalby
Segment profitability. Beyond the revenue mix, the table below sets out revenue and segment result for each of the three reporting verticals, to show where profit is generated across the group.
| Segment ( crore) | Rev FY26 | Rev FY25 | Seg. Result FY26 | Seg. Result FY25 |
| Hospitals, Pharmacy & Franchise | 1,010.14 | 979.79 | 95.28 | 96.06 |
| Shalby MedTech | 131.29 | 107.17 | (34.72) | (40.34) |
| Consolidated | 1,141.43 | 1,086.96 | 60.56 | 55.73 |
Table 5.3: Segment revenue and segment result, FY2025-26 versus FY2024-25. Figures are audited consolidated segment disclosures. The segment result is stated after depreciation and is not the same as segment EBITDA: the implant segment result remained negative at (34.72) crore even though management reports the business turned EBITDA-positive (about 6.7 crore) before depreciation. The hospital vertical remains the principal profit engine. Source: Company audited consolidated segment information, FY2025-26.
5.3 Shalby MedTech (orthopaedic implants)
Shalby MedTech, the implant design, manufacturing and distribution vertical, was the standout performer of the year and a validation of the Companys integrated strategy. Audited segment revenue (Manufacturing and Trading of Implants) grew about 22% to 131.29 crore from 107.17 crore, and management reports that the business turned EBITDA-positive for the year, delivering positive EBITDA of about 6.7 crore (before depreciation) against a loss in the prior year, with positive EBITDA sustained across the final two quarters. The audited segment result, which is stated after depreciation, remained negative at (34.72) crore. Shalby This turnaround is strategically significant. It shows that the Company can build a credible, profitable domestic-and-export implant business positioned squarely within Indias import-substitution opportunity and the global search for resilient, cost-effective implant supply. DoP As volumes scale across India, South-East Asia, Africa and the CIS region and the product portfolio broadens, MedTech offers a higher-growth, capital-efficient profit pool that complements the hospital business. The MedTech investment thesis rests on three pillars. First, structural demand: with imports meeting close to 70% of Indian orthopaedic-implant demand and the market set to roughly double over the coming decade, a credible domestic manufacturer has a long runway. Second, integration: the Companys own high surgical volumes provide a captive, demanding proving ground for its implants, while its clinical reputation supports adoption. Third, a broadening portfolio and geography: with a manufacturing facility in California, a distribution footprint across India and South-East Asia, and plans to launch new products, the business is positioned to grow both at home and in export markets. Government support through Make in India, the Production Linked Incentive scheme and duty relief on implant inputs further strengthens the case.
5.4 Shalby International (Gurugram)
The Delhi-NCR / Gurugram operation is the Companys focused centre for international and quaternary care, in which international patients form a majority of revenue. The unit secured NABH accreditation during the year, an important quality milestone, and the Company raised its stake in the operation to over 91% through a rights issue.Shalby International-patient revenue, however, was affected by the West Asia conflict, which disrupted inflows from parts of the Middle East, and fourth-quarter segment revenue was 21.5 crore, modestly below the prior year. Management is offsetting this through growth in patients from Africa and the CIS region and expects the unit to progress towards EBITDA breakeven as volumes recover.
The acquisition of the Gurugram hospital, in which the Company first took a majority stake and subsequently increased its holding to over 91%, gives Shalby a tertiary-care platform in the high-value National Capital Region and a dedicated gateway for international patients. The strategic logic is to combine the Companys clinical brand and protocols with a strong international-patient base, and to diversify source geographies so that the business is less exposed to any single region. Asglobalconditionsnormaliseandthebenefitsof accreditation and a broader payer mix accrue, management expects the international vertical to become a meaningful contributor to group growth
and Shalby
5.5 Shalby Academy, clinical research and home care
Shalby Academy continued to extend the Companys brand and clinical protocols and to build its talent pipeline, enrolling students and interns across physiotherapy, nursing, nutrition and clinical-paramedical disciplines and conducting accredited certification workshops. The Companys clinical-research programme remained active, with a portfolio of clinical trials across its units, reinforcing its standing as an academic and research-led institution.Shalby Its home-healthcare offering, spanning ICU-at-home, diagnostics, pharmacy, nursing, physiotherapy and doctor visits, extends the patient relationship beyond the hospital and positions the Company in one of the fastest-growing adjacencies in Indian healthcare.
5.6 Clinical activity and volumes
Underlying the financial result is a large and growing base of clinical activity, which is the truest measure of a hospital groups franchise. The Companys scale in arthroplasty, its expanding transplant and oncology programmes, and its early lead in surgical robotics together describe a deepening clinical moat.
| Clinical indicator | Measure | Basis |
| Cumulative joint replacements | 1,75,000+ | Since inception |
| Annual joint replacements | 15,000+ | Per year |
| Share of organised arthroplasty | 15% | India, organised segment |
| Organ transplants (FY26) | 70 | 51 kidney, 19 liver |
| Cumulative transplants | 525+ | Across units |
| Surgeries performed robotically | 20%+ | Of total surgeries |
Table 5.2: Selected clinical-activity indicators. Source: Shalby; Company release.
This activity base is both a source of current revenue and a durable competitive advantage: high surgical volumes attract and retain leading surgeons, generate the clinical data that drives better outcomes, and underpin the standardised protocols that allow the Company to extend consistent quality into franchise and managed locations.
6. Financial Performance Review
The financial statements have been prepared in accordance with Indian Accounting Standards. The audited consolidated and standalone results for FY2025-26 were approved by the Board on 27 May 2026, and the statutory auditors, M/s. T R Chadha & Co LLP, issued an unmodified(clean) opinion.Shalby During the year the Company elected the concessional tax regime under Section 115BAA of the Income-tax Act, 1961. This lowers the Companys normalised statutory tax rate to about 25% from around 35% on an ongoing basis. In the year of election, it also triggered a onetime remeasurement of deferred tax, recognised in the fourth quarter, which is the principal reason the reported effective tax rate for FY2025-26 differs materially from the normalised rate (see Table 6.3).
6.1 Consolidated results overview
| crore (consolidated) | FY2025-26 | FY2024-25 | Change |
| Revenue from operations | 1,141.43 | 1,086.96 | +5.0% |
| EBITDA | 169.5 | 160.2 | +5.8% |
| EBITDA margin (%) | 14.5% | 14.4% | +10 bps |
| Profit before tax | 60.6 | 55.7 | +8.7% |
| Profit after tax | 34.7 | 1.9 | Over 17x |
| Net profit margin (%) | 3.0% | 0.2% | +280 bps |
| Net debt | 446.22 | 279.00 | +59.9% |
| Net debt-to-equity | 0.44x | 0.28x | Healthy |
Table 6.1: Consolidated financial summary, FY2025-26 versus FY2024-25. Source: Shalby.
6.1a Three-yearfinancialtrack record (audited)
| Metric ( crore, consolidated) | FY24 | FY25 | FY26 |
| Revenue from operations | 933.75 | 1,086.96 | 1,141.43 |
| Total income | 953.18 | 1,114.55 | 1,168.22 |
| EBITDA | 196.47 | 160.20 | 169.54 |
| EBITDA margin (% of total income) | 20.6% | 14.4% | 14.5% |
| Profit before tax | 128.19 | 55.73 | 60.56 |
| Profit after tax (total) | 83.50 | 1.92 | 34.69 |
| PAT attributable to owners | 84.08 | 6.22 | 37.39 |
| Basic EPS ( ) | 7.78 | 0.18 | 3.23 |
| Net worth (total equity) | 1,007.79 | 995.33 | 1,005.69 |
Table 6.1b: Three-year consolidated financial summary (audited); all figures in crore. Source: Company audited consolidated financial statements.
6.2 Revenue analysis
Consolidated revenue from operations grew 4.8% to 1,141.43 crore. Growth strengthened through the year, with fourth-quarter revenue from operations at 287.5 crore, up 8.5% year-on-year (total income 295.5 crore, up 9.4%), as both the hospital and MedTech verticals gained momentum. Revenue growth was led by higher surgical volumes, an improving case mix and the rapid scaling of the MedTech business, partly offset by softer international-patient revenue at the Gurugram unit and the planned exit of two non-core units.Shalby
The quarterly trajectory shows revenue strengthening into the fourth quarter and a marked rise in fourth-quarter profit after tax, although the quarterly EBITDA margin eased sequentially as new-specialty and staffing costs were absorbed:
| Particulars ( Crore) | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | FY26 |
| Revenue | 303.4 | 289.9 | 279.4 | 295.5 | 1,141.43 |
| EBITDA | 48.5 | 46.1 | 37.5 | 37.4 | 169.5 |
| EBITDA Margin % | 16.00% | 15.90% | 13.40% | 12.70% | 14.50% |
| PBT | 22.7 | 19.1 | 9.2 | 9.6 | 60.6 |
| PAT | 7.7 | 7.3 | 1.3 | 18.5 | 34.7 |
| PAT Margin % | 2.50% | 2.50% | 0.50% | 6.20% | 3.00% |
Table 6.2: Quarterly consolidated performance for quarters FY2025-26 Source: Shalby.
The fourth quarter delivered the years highest revenue and a year-on-year improvement in the EBITDA margin to 12.7% from 9.7%, although sequentially the quarterly margin was the lowest of the year as new-doctor and oncology start-up costs were absorbed. Profit after tax of 18.5 crore was materially aided by a one-time credit of about 34 crore arising from the change in tax regime, rather than by operating gains alone. Management regards the full-year direction, the turn to positive EBITDA in MedTech and the exit of the two loss-making units as the basis for a more durable recovery as it enters FY2026-27.Shalby
6.3 Cost and margin analysis
Operating profitability improved, with EBITDA rising to 169.5 crore and the consolidated margin edging up to 14.5%. The fourth-quarter EBITDA margin rose year-on-year to 12.7% from 9.7% as operating leverage and the MedTech turnaround took hold, although on a sequential basis the quarterly margin eased through the year. Gross margin narrowed to about 85% from about 90%, due to one time adjustment of obsolete inventory of ~ 9crs. Shalby The principal cost heads for a hospital group are clinical and employee costs, consumables and implants, and other operating expenses; during the year the Company absorbed higher costs from new-doctor recruitment and the start-up of oncology services, which it expects to be earnings-accretive as these specialties mature. Exiting the two EBITDA-negative units removed a structural drag on group margins. Two features of the cost structure are worth noting. First, the Companys in-house implant capability gives it a degree of control over a major clinical input that most peers must import, supporting both margins and supply resilience over time. Second, the start-up costs of new high-value specialties such as oncology and transplant depress reported margins in the near term but are expected to lift both revenue per bed and profitability as volumes build. Margin progression through the year, culminating in the stronger fourth quarter, is consistent with this expected trajectory.Shalby
6.4 Profitability and taxation
Profit before tax rose 8.7% to 60.6 crore. The most striking movement was at the net level, where consolidated profit after tax increased to 34.7 crore from 1.9 crore in the prior year. This reflects three factors working together: healthier operating performance across the core hospital and implant businesses; the elimination of drag from the two discontinued units; and the favourable impact of the shift to the lower-tax regime under Section 115BAA, including a one-time tax credit of about 34 crore, recognised during the year. The standalone hospital business remained solidly profitable, with a standalone EBITDA margin in the mid-teens.
At the consolidated level this one-time tax benefit was partly offset by a reassessment of subsidiary deferred-tax assets of about 21.1 crore, so the underlying figure above is indicative and should be read together with the audited tax note.
Per-share performance. To translate the profit recovery into per-share terms:
| Per share ( ) | FY26 | FY25 |
| Basic EPS (reported) | 3.23 | 0.18 |
| Dividend per share | Nil | Nil |
Table 6.4a: Reported basic EPS was 3.24 in FY2025-26 compared with 4.44 in FY2024-25, reflecting the Companys reported earnings for the respective financial years.
Source: Company Audited Consolidated Financial Statements.
Reconciliation of the tax charge. To aid comparability, the table below reconciles the reported tax charge for the year. The reported effective rate is distorted by a one-time, non-cash deferred-tax movement recognised on election of the Section 115BAA regime (a deferred-tax credit, partly offset by the write-off of MAT credit and a reassessment of subsidiary deferred-tax assets). Figures are drawn from the audited tax note.
| Tax reconciliation ( crore) | FY26 | FY25 | Basis |
| Profit Before Tax (PBT) | 60.56 | 55.73 | Reported Incl. earlier-year adj. and MAT write-off; per audited P&L Non-cash; 115BAA |
| Current Tax | 44.03 | 56.53 | |
| Deferred Tax | (18.15) | (2.72) | remeasurement and subsidiary DTA reassessment |
| Total Tax Expense | 25.88 | 53.81 | PBT less PAT |
| Profit After Tax (PAT) | 34.69 | 1.92 | Per audited P&L |
Table 6.4: The Companys tax expense for FY2025-26 was 25.88 crore againstaprofitbefore tax of 60.56 crore, resulting in a reported effective tax rate of approximately 42.7%, which is elevated relative to the normalised Section 115BAA rate mainly because of the write-off of MAT credit and a reassessment of subsidiary deferred-tax assets.
6.5 Balance sheet and capital structure
The Company closed the year with net debt of 446.22 crore and a comfortable net debt-to-equity ratio of about 0.44 times. The increase in borrowings over recent periods is attributable mainly to investments in the US implant operations and the Gurugram acquisition; with MedTech having reached EBITDA breakeven, management expects incremental borrowing to moderate and the gearing ratio to improve from here. Promoter holding stood at around 74%, with no encumbrance on promoter shares at the year-end, a marker of alignment and balance-sheet quality.Shalby The Company maintained a prudent capital structure during FY2025-26, with gearing remaining at a moderate level despite an increase in net debt from 279.00 crore to 446.22 crore. The increase primarily reflects strategic investments in Shalby MedTech, the acquisition of an additional stake in PK Healthcare (Gurugram), and higher working capital requirements to support business growth. The Company continues to focus on disciplined working capital management, strengthening receivables collections, and maintaining a balanced capital allocation approach to support long-term growth while preserving financial flexibility.
The capital structure reflects a deliberately conservative approach for a growth-oriented healthcare group. A founder-led promoter group holding of around three-quarters of the equity, free of any pledge, signals strong alignment with minority shareholders, while the employee stock option scheme extends ownership to key staff. The Companys borrowings are oriented towards productive, return-generating assets, and the combination of improving operating cash flows, a self-funding MedTech vertical and modest gearing gives it the financial flexibility to pursue its growth agenda while preserving balance-sheet resilience.Shalby
6.6 Liquidity and cash flow
The Companys liquidity position remained sound through the year, supported by steady operating cash generation from the core hospital business and an improving contribution from MedTech. Capital expenditure was directed selectively towards high-return clinical capability, including oncology, robotics and imaging, while the discipline of exiting loss-making units freed up management attention and capital. With gearing modest and the implant business now self-funding at the EBITDA level, the Company is well placed to fund its growth plans from a combination of internal accruals and prudent borrowing.
Cash flow and capital expenditure. The table below summarises the Companys cash generation and investment for the year, drawn from the audited consolidated cash-flow statement.
| Cash flow ( crore, consolidated) | FY26 | FY25 |
| Operating cash flow (pre-working-capital) | 138.44 | 140.48 |
| Changes in working capital | (98.57) | (130.58) |
| Net cash from operating activities | (0.01) | (4.34) |
| Capital expenditure (Purchase of PPE) | 149.05 | 71.45 |
| Free Cash Flow (OCF Capex) | (149.06) | (75.79) |
Table 6.5a: Operating cash flow was impacted by higher working capital requirements during FY2025-26, while capital expenditure increased significantly to support the Companys expansion and infrastructure investments. Consequently, free cash flow remained negative during the year. Source: Company Audited Consolidated Cash Flow Statement.
Working-capital management remains a focus for a hospital group, where receivables from insurers, third-party administrators and government schemes can lengthen the cash cycle. The Company continues to strengthen its revenue-cycle processes, including claims management and collections, to support healthy operating cash conversion as scheme-funded volumes grow.
6.7 Standalone performance
At the standalone level, which principally comprises the core Indian hospital operations, the
Company delivered healthy growth and profitability, with fourth-quarter standalone revenue rising and a standalone EBITDA margin in the mid-teens. The standalone balance sheet remained lightly geared, underscoring the strength of the core franchise that underpins the wider group.Shalby
Standalone financial summary. The table below sets out the standalone results of the core Indian hospital operations, drawn from the audited standalone financial statements.
| Standalone ( crore) | FY26 | FY25 |
| Revenue from operations | 898.56 | 868.86 |
| EBITDA | 169.62 | 185.74 |
| EBITDA Margin (%) | 18.88% | 21.38% |
| Profit Before Tax (PBT) | 116.02 | 135.74 |
| Profit After Tax (PAT) | 112.91 | 83.78 |
| Net debt | 43.81 | (22.50) |
Table 6.6: Standalone financial summary, FY2025-26 versus FY2024-25.
Source: Company audited standalone financial statements.
6.7a Standalone-to-consolidated profit bridge
| Reconciliation ( crore) | FY2025-26 |
| Standalone profitafter tax | 112.91 |
| Less: net loss of subsidiaries (audited) | (71.65) |
| Less: consolidation adjustments and eliminations | (6.57) |
| Consolidated profit after tax (total) | 34.69 |
| of which attributable to owners | 37.39 |
| of which non-controlling interest | (2.70) |
Table 6.7: Reconciliation of standalone to consolidated profit after tax, FY2025-26. Standalone PAT of 112.91 crore reduces to consolidated PAT of 34.69 crore mainly because consolidation absorbs the net losses of the subsidiaries (the implant, international and other units). The subsidiaries net loss is per the statutory auditors Other Matters paragraph; the consolidation-adjustments line is a balancing figure.
Source: Company audited standalone and consolidated financial statements.
6.8 Key financial ratios (Schedule V disclosure)
In accordance with Schedule V of the SEBI Listing Regulations, the key financial ratios and significant movements are set out below. The most material change relates to profitability and return ratios, driven by the turn to higher net profitability and the change in tax regime. Detailed computations form part of the audited financial statements and the notes thereto. Shalby
| Ratio (consolidated, year-end) | FY26 | FY25 | Principal reason for change |
| EBITDA Margin | 14.50% | 14.40% | Improved operational efficiency and higher contribution from core healthcare operations. |
| Net Profit Margin | 3.05% | 0.18% | Rose sharply as net profit recovered to 34.7 cr (FY25: 1.9 cr), aided by the lower Section 115BAA tax rate and the exit of loss-making units. |
| Interest Coverage | 2.79x | 2.96x | Improved operating profitability supported debt servicing capacity. |
| Return on Capital Employed (ROCE) | 6.85% | 7.56% | Marginal changereflecting higher capital deployment for expansion initiatives. |
| Net Debt Equity | 0.44x | 0.28x | Increased due to strategic investments and higher working capital requirements. |
| Current Ratio | 1.19x | 1.29x | Lower on account of increased current borrowings and working capital utilization. |
| Inventory Turnover | 3.26x | 3.11x | Improved due to better inventory management and higher consumption levels. |
| Trade Receivables Turnover | 6.05x | 6.69x | Moderated due to higher receivables arising from increased institutional and insurance business. |
Table 6.3: Key financial ratios and explanations for significant movements.
Source: Shalby
The sharp rise in net profit margin and return on net worth is explained by the combination of improved operating profitability, the materially lower effective tax rate following the move to the Section 115BAA regime, and the removal of losses from the discontinued Rajkot and Lucknow units.
Basis of preparation and key judgements: the consolidated results combine the parent hospital company with its subsidiaries, including the MedTech and Gurugram operations, and segment figures are reported on the basis described in the financial statements. The election of the Section 115BAA tax regime is a significant judgement affecting the years tax charge and the comparability of net profit with the prior year. Certain prior-year and segment figures referred to in this discussion are indicative and drawn from the Companys public disclosures, and should be read together with the audited financial statements and the notes thereto.Shalby
7. Technology, Digital and Innovation
Technology is central to the Companys clinical differentiation and to the experience it offers patients and surgeons. The Company has been an early and deep adopter of robotic and minimally invasive surgery: more than 20% of its surgeries are already performed robotically, and during the year its arthroplasty team performed what was described as the worlds first fully autonomous robotic joint-replacement surgery, using a new-generation robotic system, as part of a global clinical collaboration.Company release Robotic surgery systems were also commissioned at two centres covering urology, oncology, gynaecology and complex abdominal surgery.
In diagnostics and oncology, the Company installed PET-CT and radiotherapy capability across multiple units and advanced imaging and interventional capability such as endobronchial ultrasound, strengthening comprehensive cancer care.Shalby The Company also pursues an active research and digital agenda, maintaining a portfolio of clinical trials through its clinical-research department and investing in digital pathways across the patient journey, in step with an Indian digital-health market growing at around 25% a year. DoP Robotic and minimally invasive techniques improve surgical precision and implant alignment, reduce tissue trauma, shorten hospital stays and improve recovery, benefits that show through in the Companys improving length-of-stay metrics and that reinforce its reputation as a centre of clinical excellence.
The Companys technology capabilities span the clinical pathway:
Surgical robotics and navigation: robotic-assisted joint replacement, including a next-generation autonomous system, together with robotic platforms for urology, oncology, gynaecology and complex abdominal surgery.
Advanced imaging and oncology technology: PET-CT and radiotherapy installed across multiple units, plus endobronchial ultrasound and interventional capability, underpinning comprehensive cancer care.
Digital surgical planning and implants: digital planning and the Companys in-house implant capability, supporting precision and, over time, patient-specific solutions.
Clinical research and academics: an active clinical-trial portfolio through a dedicated clinical-research department, keeping the Company at the frontier of evidence-based practice.
Beyond the operating theatre, the Company is progressively digitising the patient journey, from access and consultation to records and follow-up, and is extending care into the home through its home-healthcare services. These investments align the Company with an Indian digital-health market expanding at around 25% a year and position it to capture efficiency and experience gains as digital adoption deepens across the sector. DoP
8. Quality, Accreditation and Clinical Governance
Quality and patient safety are foundational to the Companys brand and to its ability to attract patients, surgeons and institutional referrals. The Companys hospitals operate under structured clinical protocols, standard operating procedures and patient-safety systems, and pursue recognised accreditation, including NABH for hospitals and NABL for laboratories. During the year the Gurugram international hospital secured NABH accreditation under the latest and is recognised AACI (American Accreditation Commission International) accreditation..Shalby The Companys clinical standing was further recognised when its critical-care leadership was invited by the National Health Systems Resource Centre, under the Ministry of Health and Family Welfare, to help define national ICU quality standards, positioning Shalby as a benchmark for the wider system.Shalby The Companys long-standing investment in standardised, audited clinical pathways, refined across more than 1,75,000 joint-replacement procedures, is a key reason its franchise and management models can extend consistent quality into new markets.
Patient safety is managed through a structured framework that includes infection-control protocols, surgical-safety checklists, medication-safety systems, clinical audits and adverse-event monitoring, supported by trained quality teams at each unit. The pursuit of recognised accreditation provides independent assurance that these systems meet national and international benchmarks, and accreditation is increasingly a prerequisite for empanelment with insurers, third-party administrators and government schemes, linking quality directly to access and revenue.
Clinical research reinforces quality by embedding evidence-based practice and continuous improvement. The Companys active portfolio of clinical trials, run through a dedicated clinical-research department, keeps its clinicians engaged with the latest protocols and contributes to better outcomes for patients across its specialties.Shalby
9. Environment, Social and Governance (ESG) and CSR
As a responsible healthcare provider, the Company integrates environmental, social and governance considerations into the way it operates, guided by its Board-approved Business Responsibility and
Sustainability Policy and Corporate Social Responsibility Policy.Shalby
Social
The Companys most significant social contribution is the delivery of high-quality, accessible tertiary care, including treatment of patients under government health-assurance schemes such as PM-JAY and state programmes, and the training of healthcare professionals through Shalby Academy, which helps address Indias clinical-workforce shortage. Its corporate social responsibility activities are directed by its CSR Policy and overseen by the Boards CSR Committee.
Patient-centricity sits at the heart of the Companys social purpose. By making advanced orthopae -dic and tertiary care more affordable and accessible, including through cost-competitive, locally manufactured implants, the Company helps widen access to treatments that materially improve quality of life. Its clinical-research and academic activities further contribute to the broader health-care system by advancing evidence-based practice and building clinical talent.
Environment
In line with sound clinical and environmental practice, the Company manages bio-medical waste, energy and water use and the broader environmental footprint of its facilities in accordance with applicable regulations, and continues to seek efficiencies in resource use across its network. As a service-based healthcare provider, its direct environmental intensity is relatively low, but it recognises the importance of responsible resource management and continues to strengthen practices in this area.
Governance
The Company maintains a sound governance framework, with a Board comprising executive and independent directors, chaired by the founder, Dr. Vikram Shah, as Chairman and Managing Director, and supported by the Audit, Nomination and Remuneration, Stakeholders Relationship, Risk
Management and CSR Committees. A comprehensive set of policies, including codes of conduct, a whistle-blower and vigil mechanism, an insider-trading policy and a related-party-transaction policy, underpins transparency and accountability.Shalby Detailed ESG metrics are disclosed in the Companys Business Responsibility and Sustainability Report, which forms part of the Annual
Report.
The Board discharges its oversight through committees, each with a defined mandate:
| Committee | Principal mandate |
| Audit Committee | Oversight of financial reporting, internal controls, internal and statutory audit, and related-party transactions. |
| Nomination and Remuneration Committee | Board and senior-management appointments, evaluation and remuneration policy. |
| Stakeholders Relationship Committee | Investor and shareholder grievance redressal and service standards. |
| Risk Management Committee | Oversight of the enterprise risk-management framework and key risks. |
| Corporate Social Responsibility Committee | Direction and monitoring of CSR policy and spending. |
Table 9.1: Board committees and their mandates. Source: Shalby.
10. Human Resources and Industrial Relations
People are central to the Companys operations, and it regards its doctors, nurses, allied health professionals and support staff as its most important asset. As of the end of FY26, the Company employed over 4,500 people, including more than 1,150 doctors, across a hospital network with an installed capacity of about 2,200+ beds. During the year the Company continued to invest in attracting and retaining clinical talent, including the recruitment of senior doctors for its expanding oncology, transplant and other specialty programmes, and in skilling and training through Shalby
Academy. The Companys employee stock option scheme aligns the interests of employees with those of shareholders. Industrial relations remained cordial throughout the year, and the Company remains committed to a safe, inclusive and merit-based workplace that supports the wellbeing and professional development of its people.Shalby The Companys talent strategy is closely tied to its growth model. Building and retaining surgeon and clinician capability is essential to sustaining high surgical volumes and to extending clinical protocols into new units and franchise locations, while Shalby Academy provides a structured pipeline of trained allied-health professionals. The Company also strengthened its leadership bench during the year, including in its finance function, supporting the next phase of disciplined, profitable growth. Shalby
11. Risks, Concerns and Risk Management
The Company operates an enterprise risk-management framework, overseen by the Board and its Risk Management Committee, that seeks to identify, assess and mitigate the principal risks to the business on a continuing basis. The key risks and the Companys mitigation approach are summarised below.
| Risk area | Mitigation approach |
| Geopolitical and international-patient risk | Diversify source markets (Africa, CIS) to reduce reliance on any single region; use NABH accreditation to broaden the international referral base. |
| Input-cost and currency risk | Vertical integration through in-house implant manufacturing; procurement discipline; natural hedge from export revenues in MedTech. |
| Margin and new-specialty ramp-up risk | Phased, profitability-led specialty roll-out; exit of EBITDA-negative units; close monitoring of unit-level economics. |
| Regulatory and pricing risk | Strong clinical governance, accreditation and compliance; active engagement with the evolving regulatory framework. |
| Talent risk | Investment in Shalby Academy and training pipelines; surgeon and clinician engagement and retention initiatives. |
| Financial and leverage risk | Conservative gearing of about 0.44x; MedTech breakeven reducing further funding needs; unencumbered promoter holding. |
| Clinical and reputational risk | Stringent quality protocols, accreditation, patient-safety systems and the Companys long-standing clinical brand. |
| Technology and cyber risk | Investment in IT systems, data protection and clinical-information security across the network. |
Table 11.1: Principal risks and mitigation.
Three risks warrant particular emphasis in the current environment. The first is the exposure of the international business to geopolitical events: the West Asia conflict reduced patient inflows from parts of the Middle East during the year, and the Company is responding by diversifying its source markets towards Africa and the CIS region and by drawing on the Gurugram units new NABH accreditation to broaden referrals. The second is input-cost and currency risk on imported devices and consumables, which the Company mitigates structurally through its in-house implant manufacturing and the natural hedge provided by MedTechs export revenues. The third is execution risk on new specialties and expansion, which the Company manages through a phased, profitability-led approach, close monitoring of unit-level economics, and a willingness to exit operations that do not meet its return thresholds, as demonstrated by the closure of the two loss-making units during the year.Shalby
12. Internal Control Systems and Their Adequacy
The Company maintains an adequate and effective system of internal controls commensurate with the size, scale and nature of its operations. These controls are designed to provide reasonable assurance regarding the reliability of financial reporting, the safeguarding of assets, compliance with applicable laws and regulations, the prevention and detection of fraud and errors, and the orderly and efficient conduct of business. Standard operating procedures, clinical protocols, delegation-of-authority frameworks and an enterprise resource planning system govern day-to-day operations across the network. The internal audit function reviews the adequacy and effectiveness of these controls on a continuing basis, and its observations, together with managements responses and action taken, are placed before the Audit Committee of the Board, which monitors implementation. The statutory auditors have issued an unmodified opinion on the financial statements for the year.
Shalby
The Company also maintains internal financial controls over financial reporting, designed to ensure that transactions are recorded accurately and completely and that financial statements are prepared in accordance with applicable accounting standards. These are supported by information-technology controls within the enterprise resource planning environment, a structured compliance-monitoring framework that tracks adherence to applicable statutory and regulatory requirements across the network, and periodic management review. Taken together, these systems provide the
Board and management with reasonable assurance over the integrity of operations and reporting, while continuing to be strengthened as the Company grows.
13. Outlook
The Company enters FY2026-27 from a positionofrenewedfinancialand strategic strength. The macro backdrop in India, with resilient growth, benign inflation, an easing rate cycle and supportive government policy, is favourable for healthcare, while the structural drivers of demand, from demographic ageing and the rising burden of non-communicable diseases to deepening insurance coverage and the consumer shift to organisedcare,remainfirmly intact.MoSPI
The managements strategy rests on five priorities. First, to deepen the core hospital business through higher surgical volumes, a richer case mix and the scaling of high-value specialties such as oncology, nephrology and transplant. Second, to grow Shalby MedTech, now EBITDA-positive, as a flagship of Indias import-substitution opportunity across domestic and export markets. Third, to expand the brand into under-served Tier-2 and Tier-3 markets through capital-efficient, asset-light franchise and management models, complemented by selective greenfield additions. Fourth, to lead on technology and quality through continued early adoption of robotic and minimally invasive surgery and the accreditation and clinical-governance standards that anchor the brand.
Fifth, to maintain financial discipline, improving return ratios, reducing gearing and pursuing only selective, profitability-led expansion. The Company will continue to monitor near-term headwinds, in particular the path of the West Asia conflict and its effect on international-patient flows and input costs.
With its globally recognised orthopaedic and arthroplasty franchise, a diversified and broadening specialty portfolio, a differentiated and now-profitable implant-manufacturing vertical, early leadership in surgical robotics, and a strengthened balance sheet, the management is confident of delivering sustainable, profitable growth and enhanced value for all stakeholders in the years ahead.
Medium-term ambition. Management has articulated an aim to roughly double the Companys revenue over the medium term, to be achieved primarily by lifting utilisation of the existing network, scaling high-value specialties and the MedTech business, and adding capacity selectively through capital-efficient models. The expected trajectory of each engine is as follows:Shalby Management continues to pursue long-term growth through higher utilisation of its existing hospital network, expansion of high-value specialties, scaling of the Shalby MedTech business, and selective capacity additions through asset-light models, including the planned Mumbai (Santacruz) project. The Companys strategy remains focused on sustainable revenue growth, operational efficiency, prudent capital allocation and maintaining a disciplined balance sheet while creating long-term shareholder value.
Hospitals, Pharmacy and Franchise: steady growth in surgical volumes and case mix, supported by the ramp-up of oncology and transplant and the extension of the SOCE franchise into new markets.
Shalby MedTech: the highest-growth engine, building on its EBITDA-positive turn, with new product launches and deeper penetration of domestic and export markets.
Shalby International: a recovery towards EBITDA breakeven as international-patient flows normalise and the benefit of NABH accreditation and a broader source-market mix accrues.
Delivery will depend on continued clinical and operational execution and on the external environment, in particular the path of the West Asia conflict and of input costs, which the
Company will continue to monitor closely.
14. Cautionary Statement
Basis and status of this document: this Management Discussion and Analysis has been prepared for inclusion in the Annual Report for FY2025-26 and should be read together with the audited consolidated and standalone financial statements for the year ended 31 March 2026, which were approved by the Board on 27 May 2026. Where this discussion refers to full-year FY2025-26 figures, these are derived from those audited results; macroeconomic and industry references dated within the financial year reflect the most recent data available at the time of preparation.
Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic conditions affecting demand and supply, price conditions in domestic and international markets, changes in government regulations, tax laws, geopolitical developments and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent developments, information or events. Financial figures have been rounded for presentation; certain prior-year and segment figures are indicative and drawn from the Companys public disclosures, and should be read together with the audited financial statements.
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