Shalby is looking for a breakthrough Run

11 oct 2023

Key Levels:

Support: 244

Resistance: 275 and then BO

Writeup:

Support Level: The support level at 244 is a critical price point where the stock has historically found buying interest. If the stock's price approaches or touches this level, it is expected to encounter buying pressure, preventing it from falling further. A breakdown below this support level could be seen as a bearish signal.

Resistance Level: The resistance level at 275 is an important price point where the stock has faced selling pressure in the past. It represents a barrier that the stock must overcome to move higher. A breakout above this resistance level is a bullish signal and may indicate a potential upward trend.

tock price successfully breaches and closes above this resistance level, it may be considered a breakout. Breakouts often signify increased buying interest and could lead to a sustained upward price movement. This breakout could be a signal for traders to enter long positions or for investors to consider adding to their existing holdings.

It's important to note that breakouts can be associated with increased volatility, and traders should be cautious and consider risk management strategies when trading breakouts. Additionally, confirmation of a breakout (sustained price movement beyond the resistance level) is often preferred to reduce the risk of false signals.

Fundamentals of Company:

Shalby is a healthcare company operating in India and Africa. They manage 14 hospitals with a total bed capacity of over 2,000 beds and run 60 outpatient clinics across India and a few in African countries. They are also expanding with two upcoming facilities in Maharashtra. Shalby has introduced an asset-light franchise model, Shalby Orthopedics Centre Of Excellence (SOCE), with a goal to establish over 50 SOCEs in India in the next 3-4 years.

The company has seen improvements in occupancy levels and Average Revenue Per Occupied Bed (ARPOB) from FY21 to FY23. They have diversified their revenue streams with specialties like Arthroplasty, Oncology, Cardiac Science, and others. In Q1FY24, Arthroplasty contributes significantly to their revenue at 45%.

Shalby has specialized in Arthroplasty, having conducted over 1,48,000 joint replacement surgeries with a market share of about 15% in India. They are also diversifying from their specialty field, with non-arthroplasty segments contributing to the majority of revenues.

The company is involved in homecare services, providing nursing, physiotherapy, medical equipment, and more. Shalby has a significant revenue concentration from its flagship hospital in Ahmedabad, Gujarat, but they aim to expand their presence in Tier 2 and Tier 3 cities.

In FY22, Shalby acquired implant assets in the USA, achieving backward integration and diversification from their Arthroplasty business. The management team has seen changes, with the appointment of a new Chief Financial Officer.

Shalby is growing its presence in India and Africa, specializing in orthopedics and expanding into various medical specialties and geographic markets. They aim to increase operational efficiency and profitability through strategic real estate usage and centralized procurement.