Shalby Hospitals

Is Sanar International Hospital is the game game-changing strategy of Shalby?

Some interesting facts:

we have acquired a majority stake in Sanar International Hospital that is PK Healthcare Private Limited with a control of 87.26% equity stake by investing Rs.102 Crores as primary and secondary infusion. This will help Shalby to accelerate its presence in the Delhi/NCR region with a vision to scale up international business and also to consolidate its presence in the northern part of India. This facility is located at prime location of Golf Course Road Gurugram with a land parcel of 1.27 acres which has been taken on long-term lease with a total build-up area of 125000 square feet. The current capacity of the facility is 130 beds and can be expanded to the level of 180 beds with additional capex. At present the hospital generates around 68-70% business from the international market which comprises 43% from Middle East, 15% from Africa, 8% from CIS and remaining from others catering to more than 60 countries. Sanar offers comprehensive, advanced surgical care in the specialties such as cancer, heart, blood, marrow transplant, kidney and liver transplant, bone and joint and neurosciences among other specialties.

The very unique about this hospital is that 70% of the topline that is generated here is from international business, and 30% is from domestic business. It does some of the most high-end treatments which are done in tertiary quaternary care hospital in India. It does a lot of bone marrow transplants, kidney transplants; liver transplants and has all the offerings that every other Shalby unit offers for a total comprehensive kind of care. What we believe is that because of the ongoing run rate of that particular hospital in terms of the revenue it has been generating we believe 120 to 150 Crores will be the right target for this hospital for the next 12 months from now and given the kind of ARPOB that we are able to generate over there which has been over Rs.1 lakh in the past. We believe that we will be able to add significant topline to our existing hospital business through this hospital over the next three to four years.

This looks like a greenfield project but the color of brownfield : This hospital started close to 20 months back and in the hospital business if you can see the first couple of years are EBITDA negative, they are operating at close to around 15% EBITDA negative because the occupancy level even with 70% of business are not very high they are close to around 20-22% occupancy but with the synergy and from the next year onwards the occupancy will ramp up and we are firm that we are going to have a higher single digit EBITDA in the next year and high double digit EBITDA in the year thereafter.