A tall claim but possible if prices are kept what they are in indian market right now.
If one can help us out with export data of recent months, that would be very helpful here.
Sir can you tell the source of the 2 images
Hi, I created these charts myself with data from the companyâs results filings.
Thats great sir. Yout skills are commendable
If anyone has attended AGM which was held today, kindly share the highlights of the same.
Highlight of the AGM:-
Reference:- https://www.bseindia.com/xml-data/corpfiling/AttachLive/3ed71e64-0c28-4af2-991d-2dce4ed2049b.pdf
The call lasted for about 30 minutes. There were approximately 30 people present.
Mr. Dhirendra dubey went through the slide which i have attached above and then it was followed by a Q&A session.
My key Takeaway:-
- He has guided that COVID was an exceptional period and from Q3 there will be no effect of COVID demand on results. He said that company is currently selling 1L COVID kit in a month.
- He said to use 15.36cr revenue of FY19-20 as a base and expect the topline to grow at 30-35% CAGR for 2-3 years.
- Antigen kit will be developed in FY22-23 since it takes time and they are mainly focused on RT-PCR kits and realisation is not good from antigen kit.
- It will take 1 year atleast for Amalgamation between two entities. They will have to get permission from SEBI and then NCLT.
- They are looking for a Company to acquire to use the extra cash they have and if they will not be able to find a company they will go for a buyback in FY22-23.
- They are not able to export now because of export window since, the client want an assurity of delivery.Expect to normalise export in next quarter.
- The ICMR export projection of exporting 62cr consists of every kit and price realisation is very low i.e approximately 20rs per kit and there are some challenges so export in not happening in whole industry.This is just guidance of ICMR.
- In Next gen sequencing since it is very competitive in India so, price realisation is very low it will take some time and given FY22-FY23 as expected timeframe.
Few Takeaways from Q&A.
- Some one asked that they had a Joint Venture in Past for Diagnostic Lab and why they cancelled it his reply was âSince we will be providing kits to other lab so, we donât want to compete with our customer. Hence, 3B blackbio will never open a diagonstic lab in its lifetime.â
- Why share price are down 250 Points. His reply was âYou can ask me about sales we can guide you through it but we canât comment on share price movement.â
- Asked about export. His answer was âThe export is not happening because of 10 day window and he expect export to open soon and the focus will be on exportâ.
This sums up pretty much everything in the meeting.
Thanks for summarizing in simple language sir
Thank you very much for sharing the summary.
One question - does this growth projection factor in any potential acquisitions, better exports and improved realizations from NGS, or can these lead to positive surprises on growth guidance?
I think he had not factor in any potential acquisitions because he has yet not found any company. He has hope for better export. I personally thinks that if there will be no acquisition and 100 cr cash will be used for buyback at a price of 500 per share then 20L shares will be bought back so, there will .55 Cr shares outstanding. They had 8 cr profit in FY20 and as per guidance though he guided for 2-3 years i will assume the company profit will grow at 30% CAGR for 5 years so, after 5 years the Profit will be 30 cr. So, EPS will be 30/0.55 = 54.55 . Assume it is a growing company and at that time market has given it a PE of 15 since it is a smallcap so, the share price will be 818 . This is my assumption and earning may surprise us since, nothing is certain.I personally think that current price is bit streched and it may cool down after earning normalisation in Q3 result.
Disclosure :- Invested and hence biased.
Thanks for the summary @shubhambhardwaj. I attended the meeting as well, and as usual Mr. Dubey was transparent and conservative in his comments.
The guidance of 30-35% top line growth in 3BB in my opinion is the Business As Usual case - 1) no Covid revenue, 2) no acquisition, 3) similar trend in domestic/export growth as before. For example:
We need to apply our own adjustments to these three core assumptions to estimate future earnings. My view is that 3BB can and should grow non-Covid revenues at a much faster pace on such a low base thru a combination of organic and inorganic growth.
Thought this tweet beautifully captures whatâs in store for Kilpest over the next few quarters -
Maintain my conviction in Kilpest due to the competency and integrity of the management, optionality in the business, reasonable valuation, and long runway for growth.
disc. Invested & biased
A few points:
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In the company valuation document submitted earlier to BSE, the company had aggressive revenue projections. Now they are being conservative. During the last few quarters, it seems the management did not set the right expectations about the timelines of new products and exports viability. Now, it is disappointing to see everything (RAT, NGS, exports, acquisition, buyback) being postponed to FY23.
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Meanwhile, after waiting more than a year, now âMake in Indiaâ in diagnostics seems to be turning out as an empty slogan. Will vaccines be exported as recently announced, but diagnostic kits be restrictedâwhy?
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The picture is not clear about NGS. Will the company sell the product in India or not? Will it focus only on the exports, which means relying on the wavering government permissions? If I am not wrong, NGS seems to be a volume game; the managementâs insistence on high margins is somewhat concerning for the long-term growth prospects.
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They seem to have changed their plans about selling the Agrochemical business. Will it be sold after the amalgamation?
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Are there any plans for listing on both the exchanges? Rs 10 crore share capital is now required for SME companies to list on NSE and BSE main boards. The company does not fulfill this requirementâI speculate that this may be delaying the amalgamation approval.
Disclosure: Invested.
Yes, They mentioned in the AGM that agrochemical division will continue since it is Free Cash Positive and low debt.Earlier they were telling they will sell this division.
"I personally thinks that if there will be no acquisition and 100 cr cash will be used for buyback at a price of 500 per share then 20L shares will be bought back so, there will.55 Cr shares outstanding."
- This is amazing extrapolation. Firstly the numbers are wrong. Existing shares is 0.751cr. In merger 0.107cr shares will be added. So share count will go upto to 0.858 cr. Please check your calculation
- It is wishful thinking to assume they will spend all the money they have on a buyback.
- How can you assume a buyback price of Rs500. Will you offer your share at Rs500 in a buyback?
They had 8 cr profit in FY20 and as per guidance though he guided for 2-3 years i will assume the company profit will grow at 30% CAGR for 5 years so, after 5 years the Profit will be 30 cr. So, EPS will be 30/0.55 = 54.55 . Assume it is a growing company and at that time market has given it a PE of 15 since it is a smallcap so, the share price will be 818 .
Why will anyone look at FY25 EPS? At best maybe FY23. FY20 profit was Rs7.7crs. Assuming 30% CAGR over 3 years FY23 profits will be Rs17crs. Assuming 20x multiple you get to Rs340crs. Add 100crs of cash if you want to you get to Rs440crs fair value. Stock has a market cap of Rs370crs which is an 18% upside from current levels, which is nothing great.
So without covid related profits it does not look exciting to me. My own assumption was that a part of covid profits would stay (an assumption which has not played out as price of RTPCR kits have collapsed and the export opportunity also seems much smaller than what I expected)
I also got carried away by their projections in the valuations document (which was an error of judgement)
Can listed companies be exempt from disclosing related party transactions?
Kilpest acquires control of HS Biolabs, their UK distributor for TRUPCR kits. Not sure what purpose this serves, and why the acquisition price has not been disclosed
Appraently, they want to use HSB as their vehicle to scale up export sales in UK/Europe. HSB has approvals/registrations in UK and Europe which shall enable them to scale up their export sales in UK/Europe.
I feel they need such vehicles in US, Canada, Australia and other developed markets to push exports.
( My understanding)
HSB is a single employee company as per records available. It distributes only TRUPCR products.