Shalby Ltd Management Discussions.


Indian Healthcare Industry

The Indian Healthcare Industry, one of the largest in terms of revenue and employment, is estimated to be USD 280 billion in size by 2020, according to Federation of Indian Chambers of Commerce & Industry (FICCI)-KPMG report "Healthcare: The Neglected GDP Driver". The industry is projected to grow at a CAGR of 22% during the period from FY 2016-22 to reach USD 372 billion in 2022 from USD 110 billion in 2016.

India is also ranked amongst the top healthcare markets in the world in terms of incremental growth. The growth of the middle-class, fuelled by rising incomes, combined with greater health awareness, an ageing population, increasing lifestyle diseases and availability of medical insurance are some of the factors that contribute to the growth. Strengthening coverage and services, growing medical tourism and government schemes and increasing public and private investment are also driving the growth of the industry.

The healthcare industry in India comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The hospital industry in India, which accounts for 80% of the total healthcare industry, is attracting a huge demand from global as well as domestic investors. The hospital industry is expected to reach USD 132 billion by FY 2022-23 from USD 61.8 billion in FY 2016-17; growing at a CAGR of 16-17%.

Hospital Industry growth

Hospital Sector (in USD Bn)

The sector is also one of the key employment generators in India, being the fourth-largest employer among the non-farm sectors. According to the last updated Quarterly Employment Survey (QES) from Ministry of Labour and Employment, there were a total of 1.17 million employees in the health sector. Out of that 1.17 million, 0.97 million (82.88%) were regular, 0.16 million (13.88%) contractual and 0.04 million (3.24%) were casual employees. The sector is expected to generate more employment in the coming fiscals due to the growing demand and expansion of the private sector.


Source: Ministry of Labour and Employment, healthcare, KPMG Report

Government Initiatives

The government pledged to invest 2.5% of its GDP into healthcare by 2025 to speed up the infrastructure. The sector has the scope to develop as a key employer, foreign exchange generator, booster for innovation, skill and investment and hence is an important GDP driver for India. A number of schemes have been initiated by government to boost growth in the healthcare sector.

The National Health Mission (NHM) 2012-2020 The National Health Mission (NHM) 2012-2020 encompasses its two submissions, the National Rural Health Mission (NRHM) and the National Urban Health Mission (NUHM). It is the worlds largest government-funded healthcare programme, started in India to provide accessible, affordable and quality healthcare to people. The programme, which was originally planned till 2017, was extended till March 2020 to complete the scheme implementations.

Other Health Schemes

The Government launched Mission Indradhanush with the aim of enhancing immunisation coverage in the country. Ayushman Bharat was another programme launched under National Health Policy 2017, to achieve the vision of Universal Health Coverage (UHC). Ayushman Bharat was aimed at delivering a comprehensive need-based free health care service at the secondary and tertiary level to the 40% of population at the bottom level, who are poor and vulnerable. The scheme comprises two components:

Health and Wellness Centres (HWCs)

Pradhan Mantri Jan Arogya Yojana (PMJAY)

PMJAY provides a cover of Rs. 0.5 million per family annually to about 107 million underprivileged families. As of April 2020, 20,609 hospitals have been empanelled under the scheme and 124.47 million E-cards have been issued. Rashtriya Swasthya Bima Yojana and National Nutrition Mission (NNM) are two other schemes targeted at improving the healthcare sector in India.

Increased Budget Allocations

The Union Budget 2020-21 allocated Rs. 671,120 million for the Ministry of Health and Family Welfare, up 3.9% over the revised estimates of FY 2019-20 Rs. ( 646,090 million). The Department of Health and Family Welfare accounted for 97% of the Ministrys budget allocation, equating to Rs. 650,120 million. Health research sector received an allocation of Rs. 21,000 million.

NHM was allocated Rs. 334,000 million, out of which, NRHM received Rs. 270,390 million, the biggest component of the health budget. Experts sought more funds for primary healthcare for rural population under NRHM.

Allocation for Pradhan Mantri Jan Arogya Yojana (PMJAY) under Ayushman Bharat shot up 100% to Rs. 64,000 million over the revised estimates of Rs. 32,000 million.

Allocation for Pradhan Mantri Swasthya Suraksha Yojana increased 27% to Rs. 60,200 million. The scheme focusses on correcting regional imbalances in healthcare services.


Source: budgets/demand-grants-2020-21-analysis-health-and-family-welfare# edn3

Public-Private Partnership

Finance minister Nirmala Sitharaman approved a January 2020 Niti Aayog proposal to link district hospitals with private medical colleges as part of a public-private partnership (PPP) mode for infra development. The Budget proposed more than 20,000 new empanelled hospitals under PM Jan Arogya Yojana for poor people in Tier-2 and Tier-3 cities. It also proposed setting up hospitals in the PPP mode in Aspirational Districts, using Machine Learning and AI, under Ayushman Bharat scheme. The first phase will cover those Aspirational Districts, where presently there are no Ayushman empanelled hospitals. Aspirational Districts are those which are affected by poor socio-economic indicators and need overall improvement in human development.

Boosting Government Medical Services While there are 15 operating All India Institute of Medical Sciences (AIIMS) in India in CY 2019, the government is planning to set up 10 new AIIMS in the near future. Eight of them are expected to start operation in 2025.

100% Foreign Direct Investment

The government allows 100% FDI under the automatic route for Greenfield projects and under the government route for Brownfield projects in the healthcare sector. The hospital and diagnostic centres attracted FDI worth USD 6.62 billion between April 2000 and December 2019, according to data from the Department of Industrial Policy and Promotion (DIPP). The share of healthcare FDI has been constantly rising since 2011, indicating the growing interest of foreign players in the sector.

Growing Private Participation

Rapid urbanisation, a quickly growing middle-class population, an increase in income, health insurance availability and customer preference for comfortable and quality healthcare have driven more private participation in the healthcare sector in India. According to a report by the World Economic Forum, by 2030, India will add about 140 million middle-income and 21 million high-income households, increasing the total share of these segments to 51%. This indicates the potential demand for a well-equipped healthcare sector in India. While the government has taken significant measures to improve healthcare services, private players have emerged and grown significantly due to the growing healthcare demands and with the growing inflow of both domestic and foreign investments.

The private sector forms the backbone of Indias healthcare industry because of the investment it has been doing in the sector. Compared to 1.28% of public expenditure, the private sector spends approximately 3% of the GDP (an average of Rs. 3,675 per capita) per annum on healthcare and accounts for 70% of Indias total healthcare expenditure. Private players have significantly penetrated in Tier-2 and Tier-3 cities as well as rural areas with their high quality facilities and services. About 72% of rural population and 79% of urban population use private healthcare services. According to the KPMG report, the private sector today caters to 70% of out-patient and 60% of in-patient services. Private healthcare now contributes a significant portion (around 65%) to the primary healthcare system of the country and accounts for more than 40% of the total hospitals in the country.

The healthcare sector has been an attractive investment target for Private Equity (PE) and Venture Capital (VC) firms. The PE investments have more than quadrupled during the period from CY 2011 to CY 2019. The hospitals and diagnostic sector has seen close to 100 domestic and inbound M&A deals, with an average deal size of USD 30 million. With the Government opting for PPP mode for healthcare sector development, there is going to be a huge opportunity for private players to invest and grow in the healthcare sector.


Sources: KPMG reports: content/dam/kpmg/in/pdf/2016/09/AHPI-Healthcare-India.pdf, content/dam/kpmg/pdf/2016/03/Healthcare-the-neglected-GDP-driver-2015.pdf, IBEF, healthcare, WEF Future of Consumption Fast-Growth Consumers markets India report 2019.pdf

Healthcare Delivery in India

Healthcare Delivery system comprises institutions, organisations and persons that operate within the healthcare system, and are responsible for the promotion of health, prevention of illness, detection and treatment of disease and rehabilitation. Healthcare Delivery infrastructure in India has been lagging behind when compared with many countries that are poorer than India in other economic parameters. Indias public expenditure is too low to facilitate a strong healthcare delivery system. A lack of expenditure and Indias huge population remain the main roadblocks in the healthcare delivery sector.

Healthcare Delivery in India is segregated under three broad categories of Primary, Secondary and Tertiary. The three categories are in urgent need to work in tandem to bring about a positive change in the system.

The primary care segment remains one of the major healthcare challenges in India. The segment suffers because of limited care services, staff and infrastructure. Secondary healthcare offers the most of diagnosis and treatment facilities to a large part of the population. Both public and private sector secondary care hospitals face their share of challenges related to staff, technology availability and operations. However, it is the tertiary care segment which has been witnessing a fast growth because of the participation of the private sector. However, this is not accessible to the poor section of the population because of rising costs and a shortage of infrastructure in the public sector.

India is still lagging behind in the number of hospital beds and doctors in relation to World Health Organisations (WHO) recommended numbers. According to a government statement, there is one doctor for every 1,445 Indians as per the countrys current population estimate of 1,350 million, which is lower than the WHOs prescribed norm of one doctor for 1,000 people. India currently has around one million hospital beds and has a bed-population ratio of nearly 1:1,000 against the World Health Organisations (WHO) recommendation of 3.5 beds per 1,000 people. The statistics portray the existing gap in the health delivery infrastructure and the coronavirus outbreak has highlighted the criticality more clearly. Considering the growth potential and the significance of healthcare system in Gross Domestic Product, the Government needs to improve the infrastructure in the national, state and district level, while maintaining quality and cost.

COVID 19 Impact

The healthcare industry cannot be analysed in isolation from the worldwide outbreak of the coronavirus pandemic with more than 16 million positive cases and growing further. The pandemic has jeopardised the global and Indian healthcare system along with all other economic activities. India, with a population of 1.3 billion, is reeling under pressure to deal with such a huge outbreak infecting more than 1.5 million people, because of its inadequate healthcare infrastructure. Considering the fact that European countries have failed to contain the epidemic notwithstanding their state-of-the-art healthcare system, India is focussing on upgrading its healthcare delivery system to survive the crisis and contain the spread. So, the government decided on a twin strategy – a nationwide lockdown to break the chain of infection and a quick ramp-up of its healthcare facilities to face the pandemic during March to May 2020.

As an umbrella support to the economy battling with the pandemic outbreak and lockdown, the government announced a Rs. 20 Trillion stimulus package called "Atmanirbhar Bharat". To slowly pull out the economy from the lockdown impact, the government has laid out a roadmap for a phased reopening of the economy, starting with Unlock 1.0. The industries and organisations have started reopening with strict SOPs, directed by the government.

During the coronavirus emergency and lockdown, normal hospital procedures were on a partial halt and most of the hospitals had to convert portions of their capacity to isolation wards, increasing the number of lifesaving ventilators, bed and intensive care units to fight the virus outbreak. As the country is fighting with fiscal and liquidity stress, job and production loss, falling investment and consumer demand, the healthcare industry is also focussing on surviving the present crisis. A normalcy for the sector can only be projected depending on the extent of the virus trajectory and the countrys ability to contain the spread. However, there is also an opportunity to convert the challenge into opportunities. Considering the massive industrial base and growing healthcare demand, ramping up the spending on health infrastructure and healthcare R&D with a focus on healthcare equipment and services is needed to support Indias economic recovery and to protect the well-being of its citizens by providing access to high-quality and affordable healthcare.

Health Insurance Industry

Health insurance is a significant component of the healthcare delivery system in India. Considering escalating healthcare costs, need of preventive healthcare, increasing life span, growing lifestyle diseases and inaccessible quality healthcare for the poor, health insurance is emerging as an alternative mechanism for healthcare financing. The current challenges in Indias health financing scene are:

Increase in healthcare costs

High financial burden on the poor, eroding their income

Need for long-term nursing care for senior citizens because of nuclear family system

Increasing burden of new diseases and health risks

Neglected preventive and primary care and public health functions

With the growing number of private and standalone health insurance providers, the awareness and penetration of health insurance has been on an upward trend. According to the Insurance Regulatory and Development Authority of India (IRDA), market share of public sector insurers declined from 45% in FY 2017-18 to 40.5% during FY 2018-19. On the other hand, the share of private sector and standalone health insurers grew by 4% and 1%, respectively, during the same year. Overall, premium income for private insurers increased substantially by 24%.

Gross direct premium income (with market share) in India: general and health insurers

(In Rs. million and %)

Private health insurance players are attracting Indian consumers with innovative solutions and products. They are also moving beyond mere hospitalisation coverage to more comprehensive policies that can incentivise wellness, promote preventive care and cover critical care.


Shalby Hospitals (‘Shalby or ‘the Company) was started by Dr. Vikram I. Shah, the specialist orthopaedic surgeon in 1994 in Ahmedabad, Gujarat. Shalby now operates a chain of 11 multispecialty tertiary hospitals across India with an aggregate bed capacity of over 2,000. From its chain of hospitals, four are located in Ahmedabad and one each at Vapi, Surat, Indore, Jabalpur, Mohali, Jaipur and Mumbai. It also has 50 outpatient clinics across 43 cities in India. A pioneer in the field of joint replacements in India, it is also one of the leading providers of quality and affordable healthcare services. Shalby operates outpatient clinics in Sudan, Addis Ababa, Rwanda, Nairobi and Dar es Salaam in the African continent. Shalby Hospitals are equipped with state-of-the-art facilities, advanced technology and a highly-skilled team of healthcare specialists, doctors and nurses.

Key Competitive Strengths:

Leadership in joint replacement surgery Shalby is one of the top hospitals in joint replacement surgery in India with 15% market share in private hospitals offering joint replacement and 5% overall market share. It is also the number one player worldwide for knee replacement surgery. The Hospital is capitalising on this niche and working on an asset-light model around India. Shalby continued its journey as a leader in the segment and performed 9,600 Arthroplasty surgeries during FY 2019-20.

Brand Value

Shalby has created brand equity for itself as a trusted and preferred name in the healthcare sector, with special reference to orthopaedic surgery. The brand name was earned based on its modern technologies, best-in-class infrastructure, quality healthcare services and successful surgeries performed on patients of all age groups and across diversified locations. In FY 2019-20, Shalby provided healthcare services to 388,354 patients.

Unique Business Model:

The Company has a unique business model, which is based on optimising Capex and Opex in order to achieve higher return ratios than industry peers, while offering the best-in-class services. The Companys key focusses are:

• Optimal use of space for the building and interior layout

• Judicious purchase of quality and cost-effective equipment

• Centralised procurement process for cost savings

• Higher OT to bed ratio with effective space optimisation for OT rooms

A competent in-house planning team looks after all these factors while strategising a new facility and operations. Additionally, the Company operates on either fully owned or Operation and Maintenance (O&M) on revenue sharing model. This does not require any fixed rent or security deposit.

Dedicated Medical Team:

Shalby has a 4,000 plus in-house team of skilled doctors, surgeons and support staff with relevant industry experience and in-depth domain expertise, who have been leading the Companys growth.

Outpatient Clinics (OPD)

Shalby operates OPD in India and abroad, where patients can visit and get specialised consultation. The Company analyses patient trends and decides on expansion plans. They train local doctors for conducting OPDs in and around Ahmedabad. Shalby has been operating such OPD clinics for 15 years now, building a strong brand value. This way, when the Company decides to expand its hospital facilities, it benefits from high brand recall without incurring high branding cost.

Strong Balance Sheet

Shalbys net cash position balance sheet remains a unique strength and gives it a competitive edge among the peers that are on expansion mode. Notwithstanding the continuous expansion in the past decade, the Company has remained debt-free by virtue of its asset-light model approach and steady free cash flow generation from legacy hospitals in Ahmedabad supported strongly by their brand value.


During FY 2019-20, the Companys consolidated revenue stood at Rs. 5,042.23 million, registering a growth of 6.9% from Rs. 4,715.15 million in FY 2018-19. Profit before Tax (PBT) stood at Rs. 567.27 million compared to Rs. 503.88 million in FY 2018-19. The Companys PAT declined to Rs. 275.86 million from Rs. 316.54 million in the previous year, which is mainly due to decrease in deferred tax assets. During the year, the Company repaid Rs. 93.27 million worth loans and the outstanding balance stood at Rs. 622.17 million.


Particulars FY 2019-20 FY 2018-19
Bed capacity (Nos.) 2,012 2,012
Operational beds 1,200 1,102
Average Length of Stay 2.61# 2.69
Occupancy (Beds) 450 413
In-patient Count (Nos.) 62,758 55,985
Out-patient Count (Nos.) 325,596 296,197


# 4.22 days without day-care procedures

Key Financial Ratios

Sr. No. Ratio Analysis 2020 2019 Difference Explanation to significant change
1 Debtors turnover ratio 0.19 0.17 9% No significant change
2 Interest coverage ratio 12.09 8.29 46% Improvement in ratio is owing to better EBIT margins coupled with fall in interest payments
3 Current ratio 2.81 2.26 24% No significant change
4 Debt equity ratio 0.21 0.20 3% No significant change
5 Operating profit ratio 13% 12% 1% No significant change

Lifestyle diseases on the rise

Growing lifestyle diseases catapult demand for quality healthcare services and serve as a growth driver for the industry as well as hospitals. Rapid urbanisation, pollution, stressful work life, and consumerist lifestyle have driven a few negative trends like lack of physical activity, junk food addition, growing tobacco and alcohol consumption and nutritional deficiency. Such factors are giving rise to alarming levels of non-communicable diseases (NCDs) such as cardiovascular diseases, cancer, high blood pressure, diabetes etc. As per WHO World Health Statistics 2019, NCDs collectively caused 41 million deaths worldwide in 2016, equivalent to 71% of all deaths. The WHO report also says that 63% of deaths in India were caused by NCDs in the year 2016, and out of that, cardiovascular and chronic respiratory diseases accounted for 38% and cancer, diabetes and other NCDs accounted for 25%. This indicates the growing demand for quality healthcare in India. However, growing income and insurance support has helped people afford quality healthcare services for such diseases.

Source: ind en.pdf

Orthopaedics – an evolving market

Growing incidence of obesity, osteoarthritis and osteoporosis has driven an increase in orthopaedic problems in Indians. About 22%-39% of Indians get affected by osteoarthritis. They are 15 times more prone to get arthritis than the Western population. Greater life expectancy, lack of exercise as well as altered lifestyles are some factors causing osteoarthritis amongst Indians. This has accelerated the demand for joint replacement surgeries, arthroscopy as well as paediatric orthopaedics. The growing number of orthopaedic patients of all ages and the rising number of surgeries are estimated to boost the knee replacement market in India. Recent technological innovations in implantations, minimal invasive surgeries and computer-operated processes have also augmented the segment.

Rising urbanisation

According to UN World Urbanisation Prospect, the urban/rural ratio of the Indian population is expected to stand at 35% and 65% respectively by FY 2020-21. Private healthcare players as well as tertiary hospitals are well placed to benefit from rising urbanisation and growing affluence levels.

Rising ageing population

Average life expectancy for Indian men has increased to 68 years and for women, it has increased to 70 years. According to the United Nations Population Fund, Indias 60 plus population is estimated to reach 300 million by 2050. This leads to an increase in number of degenerative diseases and thereby driving an elevated demand for healthcare services in India.

Medical tourism

Growing medical tourism is a key growth driver for Indias healthcare market. India offers quality and cost-effective healthcare in world-class hospitals with highly qualified medical professionals. With an ability to do successful crucial surgeries at 20% of the cost in developed countries, the country is well positioned to skyrocket its share in the global medical tourism market. Quick adoption of advanced medical technology and a high success rate makes India an attractive and leading destination for medical patients, especially for developing nations.

According to a report from the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst & Young, Indias market for medical tourism is expected to touch the USD 9 billion mark by CY 2020. The report also considers India as one of the preferred destinations for Medical Value Travel (MVT), augmented by its fifth position in the Medical Tourism Index Overall ranking, 2016. The worldwide outbreak of coronavirus may negatively impact the outlook. However, India is projected to be a medical tourism hub not only for the cost-effective allopathic treatment but also for traditional practices such as Yoga and Ayurveda. To boost medical tourism, the e-tourist visa regime has now been expanded to include medical visits as well.

Growth of private health insurance

Growth of private health insurance and insurance coverage by corporate and government entities are another growth driver for the healthcare industry, as it increases affordability for advanced healthcare services.


Shalby has listed some of the key risks for the Company and its strategies to mitigate them:

1. Regulatory Risks

The healthcare industry is exposed to the risk of changing regulatory and legal procedures. Currently, the primary challenge is that of compliance, adherence to procedures and meeting patient expectations on costs and treatment. Hospitals are also subjected to regulatory headwinds such as price caps on knee implants and stents, demonetisation impact and higher GST rates. Such escalating regulatory interventions create financial pressure and call for change in business plans.

Risk Mitigation: The Company is constantly focussed on cost optimisation and enhancing operational efficiencies to insulate itself from the policy and regulatory changes.

2. Lack of Skilled Professionals

Quality healthcare service requires skilled and qualified professionals. Despite being one of the largest job generators in India, the healthcare sector still suffers from a lack of adequately trained and competent specialists, doctors, nurses and paramedics. An urban rural imbalance in the availability of skilled medical professional is another issue here. Such shortages impact the growth prospects of the industry and the Company.

Risk Mitigation: The ‘Shalby Academy offers outstanding educational programmes for paramedical students and other healthcare professionals under industry experts. The Academy trains them for efficiency in healthcare delivery and on how to tackle complex surgeries. The Company often absorbs these experts in its own hospitals. As a result, none of Shalbys hospitals face talent crunch in India.

3. High Capex

The hospital business is highly capital intensive because of the mounting costs of land and building, construction costs, as well as licenses and approval costs. Additionally, procurement and maintenance of medical equipment and technology and hiring efficient medical practitioners are also cost intensive. All these factors lift up the basic cost and lower the returns on investment.

Risk Mitigation: The Companys unique business model and strategy enables it to reach its break-even faster than its peers and helps it stay profitable. Optimal utilisation of real estate, in-house architects and designers for construction and brilliant utilities planning has led to a huge cost advantage for Shalby. The Company focusses on systematic sourcing of medical equipment at competitive rates to cut down operational costs.

4. Concentration Risk

About 6 of the total of 11 hospitals owned by Shalby are located in the state of Gujarat, which limits its presence to one geographical area and poses a concentration risk.

Risk Mitigation:To mitigate this risk, the Company has been expanding its presence in other states in India. To broaden its reach, Shalby has set up 6 new hospitals across diverse locations in India in the past years, with an aggregate capacity of 1,368 beds. Three new hospitals are coming up in Maharashtra in order to increase market reach and share.


A unique, strong business model, cost management and targeted expansion strategy of the Company have been key driving forces behind its success.

Emphasis on specialised, asset-light growth

Shalby focusses on studying patient trends and creating a market for its services before venturing into a particular geography. With a well-planned chain of outpatient clinics across India, Shalby creates a brand for itself while those clinics support as a feeder and offer pre-operative consultation as well as postoperative care. This gives the Company a broad sense of viability of opening a multi-specialty hospital in any given region. With strong brand recall coming from the OPDs, it sets up a multi-specialty hospital in an already established market. This expansion model has enabled the Company to scale up its operations with minimum or no branding costs.

Expanding to new geographies

The Company plans to leverage its brand name, orthopaedic expertise and existing infrastructure and create presence in towns and geographies where they are currently not present. The Company is coming up with three new hospitals – two in Mumbai with a total bed number of 275 and one in Nashik, with a bed number of 113. The foray into new geographies is expected to be an additional revenue generator for the Company. Under this model, Shalby also plans to send their in-house doctors for performing orthopaedic surgeries in other cities and countries. While earning revenue for the Company, they will be helping to build the orthopaedic practices there. The Company is working towards such collaboration.

The Hospital has also strategised a franchisee model as a way of business expansion without any capex. The Hospital is coming up with a franchisee model for orthopedics and for joint replacement in various cities with a goal of augmenting our topline and bottom line revenue.

Cost Optimisation

Maximising the operating efficiency and profitability has been a key component of the Companys growth strategy. A combination of various initiatives such as prudent utilisation of real estate, customised building construction, intelligent use of floor space and optimising procurement costs have resulted in significant cost savings and an increase in the number of beds. Compared to Rs. 7.5 million to Rs. 15 million capex incurred per bed for other private hospitals, Shalby has managed to achieve an impressive capex of Rs. 3.5 million per bed with the help of its unique strategy.

Specialties expansion

The Company continues to gain traction within Oncology and Neurology, Cardiac Science and Critical Care for better coverage. The Company is enhancing focus on quaternary treatments like organ transplants for liver, heart, lungs and kidney. The Company is also exploring Homecare segment for service diversification. All these are expected to create opportunities for organic growth.

Shalby Care Card

During the COVID 19 outbreak, Shalby has launched an innovative product Shalby Care Card, with a cost of 2,500 for silver and 5,000 for Gold card. This provision is intended to offer patients without medical insurance affordable treatment with discounted service and increase hospital occupancy at the same time.

Shalby Homecare

Through Shalbys "Homecare" service, the Company intends to bring an "invisible hospital" to the comfort of ones own home. The initiative, which is aimed at changing the face of primary home healthcare services in India, is designed to provide expert healthcare services for fast recovery of patients from illness and disabilities at the convenience of home. The Company reported a total of 8,271 Homecare cases and 43,327 Homecare visits.

Mars Medical Devices Limited

Shalby has come up with a 100% subsidiary of Shalby Limited, which is called Mars Medical Devices Limited and will manufacture medical devices leveraging the governments Make in India schemes. This company will facilitate backward integration in order to secure our supply chain for medical devices.


Shalby focusses on expanding to new geographies and expanding its service range. The Company is aiming at expanding its footprints in Tier-1 and Tier-2 cities where the demand for specialties is more than quality service availability. The capacity and estimated Capex details of its upcoming units in Maharashtra are as below:

Mumbai (Ghatkopar) – 100 beds – Capex : Nil

Mumbai (Santacruz) – 175 beds – Capex: Rs. 1,600 million

Nashik – 113 beds – Capex: Rs. 310 million

Shalby has managed to continue its growth in the year under review, despite the challenges coming from the coronavirus outbreak in the last quarter of the financial year. The Company is confident of its service capabilities and domain expertise that has created a niche in the healthcare market. It is committed to outperform the industry average growth in the coming fiscal year backed by its unique business model and service edge.

Shareholding Pattern as on March 31, 2020

S. No. Description Cases Shares % Equity
1 Promoter and Promoter Group 7 8,58,05,654 79.44
2 Resident Individuals 51,424 92,90,704 8.60
3 Bodies Corporates 310 58,24,032 5.39
4 Foreign Portfolio - Corp 6 39,72,269 3.68
5 Employee Trusts 1 10,00,250 0.93
6 H U F 2,329 7,23,216 0.67
7 Alternative Investment Fund 1 6,21,446 0.58
8 Non Resident Indian 391 3,44,915 0.32
9 Clearing Members 69 1,70,297 0.16
10 Non Resident Indians Non Repatriable 155 1,65,901 0.15
11 Banks 1 82,648 0.08
12 Directors 4 8,061 0.01
13 Trusts 1 255 0.00
14 Foreign Nationals 2 122 0.00
Total 54,701 10,80,09,770 100


Safety is intrinsic to the entire healthcare sector and the medical fraternity in India is moving towards having the best-in-class safety and regulatory standards. As a Company operating in the healthcare sector, Shalby aims to comply with the dynamic rules and regulations, which are much more stringent than earlier, and respond to the changing industry demands. The Company continues to focus on maintaining sustainability and reducing environmental impact of its operations while exceeding patients expectations from services. It takes up initiatives to reduce waste generation and segregate recyclable waste at hospitals, and maintain quality standards. The Company follows strict procedures and regular monitoring to ensure compliance with legal and safety requirements. Considering the risks involved, the Company also emphasises following radiation surveillance procedures and maintenance of all records for legal references. The Company also insists on sourcing the right kind of equipment and devices from the right vendors with all regulatory approval certifications. Shalbys strong corporate governance practices and regulatory compliances are instrumental in earning the global accreditations from the National Accreditation Board for Testing and Calibration Laboratories (NABL).


The Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and it has been operating effectively during FY 2019-20, based on, "the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India". The management is committed to ensuring the effectiveness of the internal control system, which provides reasonable assurance on compliance with applicable laws and regulations, safeguarding of assets, reliability and accuracy of financial reporting and prevention of fraud and errors. Its accounting policies ensure that the transactions are recorded in accordance with the Indian Accounting Standard (Ind-AS). The Internal Audit Team periodically reviews the key findings and provides strategic guidance.


A balanced integration of digital technology and skilled human resource is a key factor in sustaining a dynamic business landscape. The changing dynamics of HR in recent times focusses on improving employee engagement and retention, and augmenting the success of an organisation through digital transformation. Shalby has focussed on automation to enhance employee and business efficiency and create higher value for business and inculcated its elite values to entire workforce of 4,000+ employees.

HR Initiatives from FY 2019-20

Digital Employee Motivation Survey Shalby conducted a motivation survey through its HRMS, on converting to technological practices, which saw huge participation from employees. This has helped the Company improve the user experience without the tedious process of data gathering personally.

Shalby Academy

Shalby Academy is an Initiative of Shalby HR, which runs various paramedical, technical and management courses in collaboration with premium organisations, with a focus towards capacity building and skill upgradation of both internal employees and external students. It has helped in training fresh talents as well as ensured qualitative workforce supply.

E-Learning Initiatives

Shalby continues to focus on training and development of employees in order to improve soft skills, professional grooming and customer experience. Considering the busy daily routine of the employees, it launched an E-learning initiative through video modules. A series of videos named Shalbys Life Lesson & Shalbys Management Lesson shifted the focus from classroom sessions to virtual training giving the employees flexible option to polish their skills.

Cloud-based Human Resource Management System (HRMS)

As part of its digitalisation initiatives, Shalby is replacing the existing HRMS with People Strong software - a Cloud-based Human Resource Management System (HRMS). The new system takes a data-driven, collaborative, iterative approach to HR services and processes. It is likely to enhance user experience with regards to various HR process like recruitment onboarding, training etc.

Employee Communication

Shalby has implemented different communication channels for the employees. Senior HR Management conducts periodic town halls meetings to address the employees and share important updates and feedback. They are supported by daily departmental review meetings. Further, Shalby has the culture of an employee suggestion box where they can provide feedback anonymously. It also has initiatives like night visits and workstation briefings inspired by the Japanese Concept of Gemba Walk. To keep the employees engaged further, the Company has a Newsletter Elite and a Central broadcast group Pan Shalby, with engaging, fun and social content balanced with relevant organisational news and insights.

Employee Engagement Interventions Considering the criticality and stress in healthcare jobs, Shalby deploys various employee engagement strategies to keep the employee energised and retained, like reward and recognition programmes, public appreciation and employee engagement recreational initiatives.

Interim Performance Review

Shalby undertakes a quarterly performance review for line managers and departmental heads. This exercise helps in aligning the teams performance with the Companys core values and vision.

Resource Optimisation Strategies

Shalby continues to focus on resource optimisation by continuously monitoring resource cost and ensuring optimum utilisation, with the help of analytics tools.

Employees remain the key strength for Shalby. It aims to provide an excellent career experience and best-in-class HR system to the employees while undertaking the journey of organisational growth.


As India moves towards Industry 4.0 with the implementation of information technology (IT), automation and artificial intelligence, digital transformation is also bringing about large-scale disruption in the healthcare sector. At Shalby, IT remains a key focus area to ensure smooth functioning of its hospitals. Having embarked upon its journey of ‘Digital Transformation across hospitals in FY 2018-19, Shalbys prime objective is to implement the massive business transformation programme and capitalise on the growing opportunity.

The key focus of the Company in IT transformation goes beyond digitalising its hospitals, or even executing ChatBots, IVR-based call centres, use of smart phones or tablets, managing online appointments, and developing Apps and Facebook or LinkedIn pages. Even though these elements do form a part of the process, its IT transformation is all about ushering in a continuous and multi-dimensional process linked to social, economic and technological factors beyond the hospital walls. With smart deployment of IT, its key target is to inculcate a definitive change in mindset with regards to hospital processes and patient care.


Holistic IT transformation: Key focus areas

• Patient-centricity

Technology focus to handle crisis

Quality of care

Advanced analytics on complex health data



Automation of back-office operations Effective and efficient patient care remains the key objective of this journey of digital transformation. During the process, the Company has facilitated safe communication and confidentiality in patient-doctor information exchange. Its entire IT infrastructure, including servers, networking, storage, and power supply and client machines, are undergoing a total revamp, as part of the transformation process.

The Board aims to leverage IT to scale the Company higher qualitatively and also in terms of revenue growth.

IT systems implemented:

• New Hospital Information System (HIS) for electronic medical records

Ongoing implementation of SAP ERP

Revamping IT infrastructure to cater to growing needs

Conceptual framework for digital transformation of hospitals



Cloud solutions for back-office operations

Implementation of control and processes