Motilal Oswal initiates protection on Molbio Diagnostics inventory with Purchase, sees 21% upside. This is why
Why Truenat stays key to Molbio’s development
The most important a part of the thesis shouldn’t be the sale of diagnostic units, however the recurring income generated from take a look at kits. Motilal Oswal mentioned round 75% of Molbio’s income comes from take a look at kits, giving the corporate a consumables-led mannequin.
“The gadget creates the put in base, whereas proprietary take a look at kits monetize it making a razor-blade mannequin.”
The brokerage mentioned the identical Truenat machine can assist a number of ailments because the consumables change in accordance with the take a look at, whereas the corporate has one other 34 assays in its pipeline. Decrease utilisation of its units and take a look at kits additionally leaves room for development with out proportional additions to {hardware}.
Motilal Oswal expects Molbio’s income to develop at a 23% CAGR over FY26-29, with working leverage supporting a 50% CAGR in PAT throughout the interval. The brokerage expects EBITDA margins to broaden as test-kit utilisation rises.
Imaging and digital pathology add new development engines
The expansion story can be shifting past Truenat. By means of Prognosys, Molbio has entered digital imaging, together with ultra-portable X-ray methods. Motilal Oswal sees a strategic match between Prognosys and Truenat, with X-rays serving to display screen sufferers for TB and Truenat offering molecular affirmation.
The brokerage expects Prognosys income to develop at round 36% CAGR over FY26-29.
Molbio’s enlargement into digital pathology via OptraSCAN offers one other development alternative, though the brokerage mentioned the enterprise stays at an early stage and profitability shouldn’t be anticipated in FY27.
Valuation and dangers
Motilal Oswal mentioned profitable diversification past TB, stronger worldwide adoption and bettering money conversion might assist a re-rating. Nonetheless, dependence on authorities orders and elevated working capital stay key dangers.
“We consider Molbio is nicely positioned to seize the chance in decentralized molecular diagnostics through its built-in Truenat ecosystem, combining proprietary molecular diagnostic units with a recurring test-kit franchise.”
The brokerage has assigned a 45x 12-month ahead earnings a number of to reach at its Rs 1,800 goal worth. It additionally sees a bull-case goal of Rs 2,575 and a bear-case goal of Rs 1,100.
With 12,500+ Truenat units deployed throughout 90+ international locations, 43 assays spanning 30 ailments and a USD 9.3 billion world POCT infectious-disease market rising at round 23% CAGR, Molbio has important room for sustained development.
Disclaimer: This text has been written by Sakshi Kumari, who shouldn’t be a SEBI-registered Analysis Analyst or an Funding Adviser. Sakshi Kumari and her ‘relative(s)’ (as outlined below Part 2(77) of the Corporations Act, 2013) don’t maintain any monetary curiosity within the corporations talked about on this article as of the date of publication. The views/suggestions talked about on this article, wherever relevant, are these of the respective SEBI-registered Analysis Analyst/brokerage and have been reproduced/reported with due attribution. They shouldn’t be construed because the views or suggestions of The Financial Instances Digital or the journalist. Readers are suggested to contemplate the unique analysis report and make their funding selections primarily based on their very own evaluation. Brokerage disclaimers right here
