VENTURA

Since our initiating coverage the stock has rallied 63% and has outperformed our topline growth estimates while delivering on its guidance, though margins have declined due to expansion-related costs and higher operational expenses. With recent developments, expanding growth drivers, and operational efficiencies, we are revisiting our thesis with an updated outlook. The company continues to scale organically, through strategic acquisitions, and by expanding its franchise model, while also driving strong growth in its implant business.

Our revised estimates indicate a 27.2% CAGR revenue growth over FY24-27E, driven by higher occupancy, rising ARPOB, an increasing number of operational beds, expansion in implants business, and improved operational efficiencies. Given the steady growth of India’s healthcare sector, supported by rising awareness, increased insurance penetration, and demand for advanced medical procedures, Shalby remains well-positioned to capitalize on these tailwinds.

Valuation call: We recommend a BUY with a price target of INR 324 (17X FY27 EPS) representing a upside  of 49.3% from CMP. Key business risk: Margin pressure due to rising operational costs, including doctor hiring and expansion expenses, which could impact profitability.