3B Blackbio DX Ltd

India reported first case of HMPv virus as per news …

Human metapneumovirus (hMPV) can be detected using a variety of methods, including:

  • Nucleic acid amplification test (NAAT): A direct method for detecting the viral genome
  • Reverse transcription-PCR (RT-PCR): A sensitive method that involves transcribing RNA into complementary DNA (cDNA) and amplifying specific DNA targets
  • Immunofluorescence or enzyme immunoassay: A direct method for detecting viral antigens in respiratory secretions
  • Indirect immunofluorescent-antibody test (IFA): A rapid test that can be used to diagnose hMPV infections in children

In addition to these methods, healthcare providers may also use a soft-tipped stick (swab) to collect a sample from the nose or throat, or perform a bronchoscopy or chest X-rays.

HMPV is a pathogen that is associated with respiratory tract infections, especially in young children, the elderly, and people who are immunocompromised.

Is it another opportunity for 3bblackbio in tough times?

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I couldn’t see hmpv testing kits on 3b blackbio website.
However I could find influenza testing kits which are somewhat related to hmpv in terms of symptoms.

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3bblackbio was second in india after Mylab to get Covid kit approval during Covid spread out as far as I know. So there is less doubt whether they can make it if opportunity emerges…:crossed_fingers:

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Yup found it.

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Interesting to note that Mr. Prajesh Maroo, HNI dumped Shilchar Tech, a star performer and took 1.18% stake in 3BBDx during Q3.

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Factors those may influence Q3 results:

  • seasonal spike in Flu, Dengue & Chikungunya cases
  • Geographical expansion of sales through TRUPCR Europe operations
  • Client addition
  • Margin contraction risks
    Can we expect Q3 consolidated sales of Rs. 20 Cr. for Diagnostic Division ?
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The management already clarified that they don’t expect spike in flu in q3 and q4.

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The point ot be noted that usually each RT-PCR test cost somewhere around 2-3k. So these are difficult for doctors to suggest only on OPD basis. Doctors can suggest them more confidently if the patient is in-door or in say ICU. Point is doctors can’t ask for RT-PCR test right and left. They have to selective.

dr.vikas

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Dec-23 total revenue was 20 cr (15 cr diagnostics, 2 cr agrochem and 2.5 cr other income).

Seems reasonable to expect 24-25 cr of total revenue in Dec-24 assuming 25% growth guided for diagnostics, and removing one-time 3-4 cr revenue seen in Q2. OPM of 50% last year, interested to see if these high margins sustain.

Anything above may be considered a ‘beat’.

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https://www.financialexpress.com/business/healthcare-budget-2025-expectations-diagnostics-sector-leaders-urge-govt-to-strengthen-public-private-partnerships-offer-tax-incentives-3710930/

Hopeful that this budget will bring about some reforms for the diagnostics sector especially in the area of AMR.

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DPYD Testing – can this be a big money spinner

1/ 3B Trupcr has recently been making posts about DPYD Testing and advocacy on their LinkedIn page

2/ What is DPYP testing?

  • DPYD stands for dihydropyrimidine dehydrogenase, an enzyme that breaks down uracil and thymine. The DPYD gene provides instructions for making this enzyme.

  • People with a DPYD deficiency have a higher risk of severe toxicity from fluoropyrimidines like 5-fluorouracil and capecitabine

  • 5-fluorouracil (5-FU) is a chemotherapy drug that treats various types of cancer and skin conditions. 5-FU is an anti-metabolite that prevents cells from making DNA.

  • Fluorouracil is used to treat breast, colon, rectal, stomach, and pancreatic cancer

3/ Is DPYD testing common?

  • Apparently not. There are numerous news articles where patient died because they were not tested for 5FU toxicity (even in developed countries)

  • Interested parties are doing advocacy campaigns to make DPYD testing mandatory before chemotherapy

4/ 3B looks to be the only Indian manufacturer (based on 10 mins of Google search)

5/ Lal Pathlabs offers the test for 7600. Some other labs offering it for 25K as well.

6/ What’s the opportunity size?

  • Below are number of new cancer cases (only India) for the relevant cancer types (ones requiring 5FU treatment). Data is for 2022
    Breast 221,757
    Pancreas 21,068
    Stomach 52,706
    Colon 38,107
    Rectal 38,752

  • That’s a total of 370K cases

  • Rough math on addition to 3B’s topline:
    [370K cases] x [10% market share in India – management has talked about this share in the past] x [3800 per test – assuming 50% of the test cost as kit cost given Lal Pathlabs offers it at 7600]…that makes it about 14Cr only for India

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Interesting product launch of NGS Library Preparation Kits integrated with bioinformatics and advanced reporting.

I don’t have specific domain knowledge about this technology and would invite forum members with expertise here to share their perspective. What caught my eye in this announcement was some notes I had taken back in 2021 during an exchange with Mr. Dubey and he had shared they were looking for acquisitions with the following technologies “bioinformatics, rapid tests, NGS etc” and he had referenced Quidel in the US as a comparable company. It’s impressive to see that the company has managed to incubate all 3 of these technologies in-house over the last few years.

Here’s some more from AI- assisted research on this (usual caveats apply):

NGS Library Preparation:

– These kits “prepare” DNA/RNA samples for next‐generation sequencing (NGS) by converting raw samples into sequencing libraries.

– They streamline workflows by minimizing manual steps, reducing turnaround time (often by 30–50% relative to conventional protocols), and helping to lower sample loss and error rates (typically below 1–2%).

Integrated Bioinformatics:

– Unlike many kits that stop at sample prep, these products include a comprehensive bioinformatics solution.

– This software not only automates data analysis but also generates advanced reports to help users interpret sequencing results confidently—key for both research and clinical applications.

** How Common Is This in Molecular Diagnostics & How Deep Is 3BB’s Portfolio?**

– It’s not very common for mid-sized molecular diagnostics companies to offer both robust library prep kits and a fully integrated bioinformatics solution.

– Most competitors tend to provide only part of the workflow (e.g., just the chemistry for library prep) while outsourcing data analysis to third parties or relying on generic software.

– This level of vertical integration (from sample prep to actionable insights) is more typically seen in larger global players like Illumina or Thermo Fisher, suggesting a significant competitive edge in the local/regional market.

Market Size & Typical Kit Costs (India & Europe)

– The NGS reagents market in India is growing (tens to around 100 million USD) while Europe remains a larger, more mature market, with kit costs typically in the range of USD 200–1,000 per sample depending on the complexity and throughput.

Who Else Offers Similar Products in India?

Global Players Active in India:

Illumina and Thermo Fisher Scientific offer complete NGS workflows, including library prep kits with bioinformatics tools.

Agilent and Qiagen also provide comprehensive solutions, though often with a focus on certain applications or panels.

Indian/Regional Companies:

– Firms like Strand Life Sciences and MedGenome have been expanding their NGS and diagnostic portfolios.

– There are also emerging local players who offer components of the workflow, though fully integrated solutions (kit plus advanced reporting) remain less common among domestic companies.

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Another good quarter

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QoQ has fallen. But I think management indicated that earlier in their investor presentation?

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I checked again looks like this one is the consolidated number

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3B BlackBio Dx Ltd. Q3 FY25

Strong Financial Performance

  • Revenue Growth: ₹2,539.25 lakh, up 43.7% YoY from ₹1,766.89 lakh.
  • Profit Before Tax (PBT): ₹1,779.62 lakh, up 59.6% YoY from ₹1,115.19 lakh.
  • Profit After Tax (PAT): ₹1,349.53 lakh, up 58.4% YoY from ₹851.68 lakh.
  • Earnings Per Share (EPS): ₹15.75, up from ₹9.94 in Q3 FY24.
  • Reserves: Increased from ₹16,267.62 lakh to ₹21,690.58 lakh, strengthening the balance sheet.

Improved Profitability & Margins

  • EBITDA Margin: 76.6% (₹1,783.89 lakh EBITDA on ₹2,328.30 lakh revenue)
    • Improved from 66.2% in Q3 FY24 due to higher-margin exports and product mix.
  • PBT Margin: 75.8% (₹1,764.25 lakh PBT on ₹2,328.30 lakh revenue)
    • Significantly up from 64.8% in Q3 FY24, showing strong operational efficiency.
  • PAT Margin: 57.5% (₹1,338.03 lakh PAT on ₹2,328.30 lakh revenue)
    • Increased from 49.5% in Q3 FY24, reflecting lower cost pressures and higher realizations.

Key Growth Drivers

  1. Revised Growth Guidance in Manchester (Exports)

    • Management increased its export growth projection from 30% to 40-50%, signaling higher demand traction in Europe.
    • TRUPCR Europe (Manchester site) revenue grew from GBP 133,508 in Q3 FY24 to GBP 417,623 in Q3 FY25 (~212% YoY).
    • UK-made assays enhance credibility and regulatory compliance for European expansion.
    • Presence in 65+ countries continues to strengthen with new partnerships.
  2. Strong Export Performance

    • Exports grew 120% YoY (₹587.24 lakh vs. ₹267.20 lakh in Q3 FY24).
    • Excluding a one-time ₹137 lakh order, core export growth remains healthy at ~69% YoY.
    • Increased international tenders and new market penetration in Middle East, Africa, APAC, and LATAM.
  3. Expansion into High-Growth Segments

    • Molecular Diagnostics (MDx): 3B BlackBio holds a 12-15% market share in India in a market worth ₹300-400 crore, expected to grow 8-10% annually.
    • Rapid Tests & NGS Kits: Launched the TRURAPID® RESIST 5 OKNVI Rapid Test for Antimicrobial Resistance (AMR).
    • Next-Gen Sequencing (NGS): Expanded with BRCA Plus Kit, Endometrial Cancer Panel, and Pan-Myeloid NGS Panel.
    • Digital PCR (dPCR): Active R&D into absolute quantification technology.
  4. Strategic Business Model & Market Expansion

    • Long-Term Contracts: Over 15 reagent-rental contracts signed, ensuring predictable revenue streams.
    • Geographical Reach: Entered new European and APAC markets with aggressive distributor expansion.
    • Acquisition Plans: Actively evaluating M&A opportunities to strengthen global presence.

Negatives & Risks

  1. Q3 Domestic Sales Decline Sequentially

    • Seasonal drop in Flu, Dengue & Chikungunya sales affected Q3 vs. Q2 performance.
    • Indian MDx market growth (~8-10%) is lower than company’s 20-25% target, requiring strong execution.
  2. Export Order Lumpsum Pattern

    • Q3 included a one-time ₹137 lakh export order, which may not repeat, requiring sustained order flow.
  3. High R&D & Expansion Costs

    • Expansion in Manchester & Next-Gen Sequencing (NGS) could temporarily strain cash flow.
    • Profitability needs to be balanced with scaling up operations.

Overall Outlook

  • Upgraded export growth guidance (40-50%) confirms strong execution and market demand.
  • Rapid international expansion, new product launches, and high-margin NGS/Digital PCR segments drive long-term potential.
  • While Q3 had seasonality-driven domestic weakness, overall growth momentum remains robust.
  • Sustained institutional buying (HNI investors like Prajesh Maroo entering) adds further confidence.

Verdict: Positive Long-Term Growth Story with Export-Led Momentum

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3b-blackbio-dx–q3fy25-result-update.pdf (1.5 MB)

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Trupcr manufactures testing kits for all the 4 viruses.

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Thanks for sharing this report. It’s good to see the ongoing coverage by Nuvama of 3BB, and also nice to see a very conservative model built by the analysts.

Here are their FY26 assumptions vs. 9M FY25 actuals for comparison:

:chart_with_upwards_trend: Revenue growth: +22% YoY (₹121Cr) | 9M FY25: +45%
:moneybag: EBITDA margin: 47% (₹57Cr) | 9M FY25: 57%
:trophy: PAT growth: +17% YoY (₹54Cr) | 9M FY25: +71%
:earth_africa: Export growth: +37% YoY (₹24.8Cr) | 9M FY25: +116%

Based on these conservative assumptions, they arrived at a TP of 1,920 based on 25x P/E applied to similar run rate FY27 earnings. I would advocate that this should be a floor price / bear case – as (i) the FY27 assumptions of 150 cr revenue / 66 cr PAT should be achieved in FY26 itself based on current run rates, and (ii) the company deserves a higher multiple than 25x as long as they sustain 30%+ growth rates and retain optionality in the form of strategic M&A.

Here are some scenarios I created. If you believe they can grow at 30-40% PAT CAGR over the next 2 years (vs 71% 9M FY25 PAT growth), fair value today is >50% higher.

Note - I assumed 51 cr PAT in FY25 as the starting point (vs 46 cr in Nuvama model. PAT YTD is 39 cr and I assume Q4 to be similar to Q3).
Note - I named it “bull case” but I actually believe these are 'base case".

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