Kilpest FY23 AGM Notes
- Business growth and addressable market size
- FY24 outlook
- Guides for 25-30% growth in Molecular Diagnostic division
- Hoping for 12-15% export growth. Export business cannot grow faster because its regulated and approvals take time
- Hopes to maintain EBITDAM between 50-60% although competition in real time PCR is increasing
- Real time PCR market - PCR market new competitors are coming in and prices are going down in India
- Domestic addressable market in molecular diagnostics for 3BBB is ~300-500Cr, growing at 10%. 3BBB is only into open system kits/reagents. They have no plans of going into PCR machines. Currently not much demand for PCR machines, most machines were sold during Covid itself. Most hospitals already have machines installed
- 3BBB hopes to grow at 25% in this market on the back of
- TRURAPID launch for anti-microbial resistance testing – TRURAPID is awaiting some regulatory approvals, has already started contributing in FY23 revenues. 3BBB has to develop the market for AMR in India
- TRUNGS NGS business will start contributing from FY25 (NS1, Dengue) – Have launched one panel and will be launching another soon. NGS will become a competition for real time PCR in time. NGS market is nascent in India but will grow.
- Exports
- FY24 outlook
- Competitive advantages
- In house enzyme production (Did not specify what components of PCR testing they make in-house)
- Large product portfolio and quick response to customers are advantages that company has – 24/7 technical support, customer centric approach
- Strong, well-known brand
- Capital deployment
- M&A only if target valuations and IRR is met (Target IRR is > 10%)
- Will consider buyback after FY24 if M&A does not go through by then
- Others
- NSE listing will take time as share capital of the company has to increase – will take up post amalgamation
Disc: I exited after a quick trade (Prematurely, as it turned out) for now as I couldn’t see any lasting science based moat in 3BBB.