Nice presentation…What do u expect in the upcoming results
Dear Ravishji, your PPT is very useful in understanding the 3B Blackbio evolution, I am also invested in this company for last five months.
My investment thesis is very simple, molecular diagnostics segment of health care sector is growing at a CAGR of 20-25% in India. The segment is at a very nascent stage and is mainly dominated by foreign multi national brands. Most of the Mdx kits cost thousand of rupees and kits for some of the serious diseases are always in shortage. Very few indigenous companies are able to crack this market due to serious R&D required, difficulty in matching quality standards of foreign brands and difficulty in establishing distribution network with diagnostic labs and hospitals.
3B Black Bio , subsidiary of Kilpest India formed in 2011 managed to create and established a brand called TRUPCR in Indian market, company managed to generate profit in its 5th year of operation and since then its business is growing at a rate of 75% CAGR. Company is continuously developing more and more assays to penetrate Indian market, as per my industry checks TRUPCR kits are gaining momentum and establishing itself as a strong indigenous brand. 3Bs base is very small as it is at a very nascent stage, even after growing for 75% CAGR for last two years, quarterly sales are at just 2 crores. PAT margins are very high around 40%. This microcap can generate significant amount of wealth for shareholders if company is able to continue the hard work and expand its business in MDx segment.
what is the market size for TRUPCR product?
Blackbio.pdf (1.1 MB)
About Rs. 150-200 Crores and expected to grow 4-5 times within a year as per the corporate presentation…refer to slide 10
thanks for info… I saw the presentation, but I am not satisfied… that’s y I asked this question. Highest CAGR is 20% for Molecular Diagnostics (Chart on top right) but they are estimating the market to multiply 4 times within 1 year?
The 20% CAGR is for international average not for India. I can say this market will grow more than 100%. Just note that Thyrocare and Dr. Lal path have started to take Molecular Diagnostic Based tests and have recently started to invest in hardware. Even mentions it in it’s AR 2016-17 on page 58. So overall sector is growing and as per the AR of Kilpest, infrastructure for MBD tech is on development mode which is also a huge booster for the company and its products.
Following questions are posed to me by some intelligent guys:
- Is this the only company working in India?
- Are these kits proprietary?
- How this 95% stake of kilpest in this innovative subsidiary will impact on future prospects of the company how will they use Biotools(spain) technology in future?
- Can this business be done with few crores of money and why anyone else cant do this business?
- What is the pricing gap in MNC product and company’s product?
I did not have answer to these question and now i am looking for them. We together can find them and study further for multifold return.
Thankyou fr yr report. Any idea for how long is this growth sustainable and are MBD kits reusable or are they a one time buy.
Tks and regards
Mdx business is getting better each quarter, results are very good, do not compare with Q2FY18 as Q2 will always be very strong due to sale of dengue and chikunguniya detection kits. I think they haven’t launched a new product this quarter but product pipeline remains very strong.
Kilpest stand alone performance isnt that good. BlackBio delivers another great set of results to give a so-so consolidated result.
EPS is good, topline is good. They have given clarification that pesticide worth 72 lakhs would have been delivered in June quarter but due to government inspections it got delayed. Good results overall!
We have to be very patient for this stock, in my opinion valuation is very high with comparison to the current financials. It may take 2 to 3 years to clock revenue in high double digits. This sector is also a sun-rising sector in the world with many new diagnostic techniques on papers. How will this specific diagnostics wins the race will be a tedious task ahead for us as a investor here. One more concern i am looking at is the rate with New Labs or Customer are being added, Lets have a look
FY16-17 Q4- 12 NEW CUSTOMERS
FY17-18 Q1- 7 NEW CUSTOMERS
FY17-18 Q2- 8 NEW CUSTOMERS
FY17-18 Q3- 7 NEW CUSTOMERS
FY17-18 Q4- 6 NEW CUSTOMERS
FY180-19 Q1- 6 NEW CUSTOMERS
Lets us assume that it will add them in same manner so 24 new customers every year. This quarter they have mentioned for long term contract which will be a game changer for them.