This is a low cost kit (like pregnancy test kit with two lines test), easy to do at home.
Will this impact kilpest’s sales and profitability in medium term ?
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The company in its presentation indicated that it is working on Quick Covid Test Cards, which are likely to be similar to the Tata card you mentioned. So, I expect announcements in a few weeks.
The company has earlier said government regulations continue to keep exports difficult. The more the number of Indian players in Covid kits, the better will be the prospects for easier exports. Hopefully, the company will start exports soon.
The company is working in multiple promising areas such as oncology-related tests and Next Generation Sequencing. It is not prudent to focus too much on Covid. Better to think of as a Rs 200cr world-class Diagnostic company with cost advantage, for which the worldwide market has suddenly opened up, and has lots of cash.
“In the short run, the market is like a voting machine but in the long run, the market is like a weighing machine—assessing the substance of a company”. Don’t you agree with this? How does the presence of a few large punters affect the stock performance in the long term?
Disclosure: This stock is a large percent of my portfolio.
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You are absolutely right but this type of coincidence happened to me in Intense technology so I m just being “doodh ka jala chaas ko bhi phook phook ke pita hai”.
I have been telling all the way that this is not a COVID company only…just look at the arsenal of Kits and product it has. I think 200 cr MCAP is a good point to make position for long term and big position. We just need someone who has visited them and can say that the management is doing what it says.
Disc: Holding
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This might be a good article to be read how the COVID-19 pandemic can end.
We can also estimate diagnostic business.
https://timesofindia.indiatimes.com/life-style/health-fitness/health-news/has-community-transmission-begun-in-delhi-heres-what-we-know/photostory/78203473.cms
Disc:Invested
This is quite surprising that promoter is buying and stock fails to break series of LC. One reason could be small quantity bought by promoter.
The story of circuits started around 220 levels & zoomed the prices till 500+… and then bringing it back to sub 280 levels till date.
Such stories should be learnings for retail investors, where most of our friends fail to make any positive return (obviously there will be few exceptions but certainly major chunk of retailers loose in such movements)
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Updates from Kilpest AGM presentation:
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3B BlackBio has been growing since 2017 at a rate of 40% CAGR. Current financial year 2020-21 is totally different due to COVID-19 numbers where in the first quarter alone, the revenue was Rs. 50.16 crores and an EBITDA of Rs. 36.14 crores.
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Further, the number of tests sold in the month of July and August were 20,33,800 tests which will result in higher numbers in the second quarter. Once COVID-19 is over, a new scenario will emerge.
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It is very difficult to give growth guidance today for the next financial year post COVID-19, but surely we will benefit due to -
• Increased number of customers in India.
• Increased visibility of company as a trusted supplier of Molecular Diagnostic kits.
• Due to US-FDA the company has become visible on a global level, which will be a substantial help in growing export market.
• Although currently as stated in earlier updates, we are selling 20,000-30,000 tests per day which is a reasonable number in today’s stiff competition. We are the most preferred supplier in private labs with over 120 customers.
Exports
As of now, there is a restriction by the Government on export of RT-PCR kits. As soon as the restrictions are removed and exports can be resumed, a fresh update will be given regarding the potential.
Free Cash Allocation
In the coming financial year, capital allocation of free cash will be done and initially the surplus cash will be parked in bank deposits and it will be used mainly as and when a good opportunity emerges and for the below mentioned activities:
• Acquisition of a suitable diagnostic company which can accelerate the inorganic growth of the company in the similar field i.e. mainly diagnostics or related to diagnostics as it takes time (few months) to identify a good deal if any.
• CapEx in expansion to a larger capacity plant for both Molecular as well as Lateral Flow Assays (Both Antigen & Antibody Based) and we shall start this after the current Covid pressure eases.
• A good portion will be kept in reserve for future opportunities.
Dividend/Buyback
• As usual, a dividend would be declared in due course of time which will be higher to the previous year.
• Only after amalgamation process is completed, if found financially prudent for shareholder/company, then a suitable buyback of shares can be considered to enhance shareholder’s return/value.
NSE Listing
• The eligibility criteria for listing at NSE is a minimum paid up capital of 10 crores.
• After amalgamation our capital will become 8.58 crores. Therefore, we can plan to increase the capital by a way of issuing nominal bonus shares to become eligible for NSE listing.
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A little help, How do you attend the AGM through video conferencing? Please let me know and thanks for the notes
The procedure to join the virtual AGM for any company is mentioned in the notice of AGM uploaded to exchanges and also in the annual report. You need to log in with your depository credentials to vote and participate
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Thank you for your update enelay.
Any idea how there existing business going on? And how about NGS? Are they planning to launch it soon. Or they are too busy with covid related kits only.
I was not able to join AGM so if you have got any info from management you can share with us.
Thank you again
reasonable P/E would be 2.5 to 4 at CMP to enter .From Margin of safety point of view. Since earnings will be normalized in coming quarters. Previous quarter performance is unsustainable.
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Company seems to enjoy temporary prosperity. Valuing this company is extremely difficult as Future cash flows are impossible to predict, main reason being business is not capital intensive and every other business is trying to get into this bussiness, & company doesn’t have competitive advantage. this is very much visible in drastic sales drop in month of August.Also we can not say company will utilise cash properly after a year because management doesn’t seem to be extraordinary by looking at previous years financial statements. Export can play a key role in valuation however (if allowed)
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For the Q2, KIT business is as follows:
July: 16.11 (Lakh) *378=60.9 (Cr)
August: 4.22(Lakh) *325=13.7 (Cr),
September 8.68 *230 =19.96 (Cr).
So the total is Rs. 94.60 Cr topline without considering the revenue of agro-business.
Q1 Revenue: (53 Cr).
Almost 100% jump in the revenue, and in my opinion, it is a huge jump.
Disc: invested
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Many of the investors are fearing that the KILPEST might become next HEG. In my opinion, Kilpest has the opportunity to become next IOLCP. In case of HEG, the revenue growth happened because of the one time price increase in the product. Here, Kilpest got opportunity from a single product (RTPCR), like ibuprofen in case of IOLCP, and Kilpest in increasing its revenue from the volume of the product though the price of tests are decreasing day by day. Given the present scenario, test volume should increase in the coming months.
Disc: invested
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I think PAT will be around 35 cr
Disc…invested
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September sales volume is double the Aug numbers, but the overall revenue jump is not that great, since the current prices already had factored in Aug numbers, I believe this company is not going to get much better PE multiple because the domestic growth is limited by the government regulations & as we have experienced the past 2 quarters, there seems to be high uncertainly whether RTPCR is going to be preferred or Rapid Antigen. I believe the uncertainty is pulling this company to low PE multiples!
Disclosure: Not invested, waiting for the update on the Export of kits
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The good news for Kipest is that they may be able to sell TruPCR through HS Biolab.Here is the full story:
HS BioLabs expands into Europe with an exclusive distribution agreement for TRUPCR ®
HS BioLabs, the UK based molecular diagnostics company, expands into Europe by entering into an exclusive distribution agreement with 3B BlackBio for the CE-marked qPCR range of TRUPCR kits.
The newly signed agreement extends the territories from the initial agreement signed in July 2019, which was for UK and Ireland.
With this new partnership, HS BioLabs secures exclusive rights to distribute the TRUPCR range of qPCR products throughout Europe for oncology, infectious disease and coagulation.
HS BioLabs will begin selling TRUPCR across select markets in the European region. Additional markets will be included with the aim of HS BioLabs becoming the sole distributor across all European markets by mid 2021.
Having already displaced a number of global diagnostic suppliers in the UK with TRUCPCR, HS BioLabs is set to replicate the same success throughout Europe.
The kits offer significant advantages to end users by being simple to use, robust, highly sensitive as well as able to work on a wide range of Real-time PCR machines.
Dhirendra Dubey, CEO of 3B BlackBio, said: “We are very pleased to have established this agreement with HS BioLabs, whose track record of successfully marketing molecular diagnostic products gives us confidence that they are the best partner for our TRUPCR range.”
Harminder Singh, MD of HS BioLabs, said: “We are committed to delivering high quality molecular diagnostic products to improve laboratory testing and workflows. This agreement builds on our extensive knowledge and experience of molecular diagnostics. We are excited to expand into Europe and grow our team and infrastructure. We look forward to a mutually beneficial and successful partnership with 3B BlackBio.”
(Source: https://hsbiolabs.com/news%2Fevents#9a1f2b67-1701-425c-97ab-5a4b154f21a4)
Disc: invested
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Kilpest circuit will 5% from tomorrow (source: BSE). What is the criteria for change in circuit?