This was business update of metropolis
Probably should expect muted numbers for 3BBB YoY
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Molbio diagnostic has filed DRHP few months back. Link here. Company is backed by temasek & Motital Oswal PE. To me it look like competitor company of 3B blackbio but not sure why they havent shown them as peer
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SEBI mandates the companies to disclose the accounting ratios of peer companies. But it doesnât mandate exactly what peers must be used. Molbio will definitely include higher valuation peers to justify their valuations.
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Quick read through initial pages of DRHP suggests it is in early stages compared to 3B. Largely business comes from central and state governments at this stage and up to 60% revenue is from TB detection.
In addition, it has IP license from Bigtec (essentially a subsidiary of the company), for micro PCR technology for detection of diseases across a spectrum of diseases.
Based on cursory analysis, 3B looks ahead at this stage. Need to study more on this for firming up a view.
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I was bit puzzled when coris had 58.7 % gross margin and negative ebitda.I was wondering if employee cost is not included in grossmargin.we know the employee cost being high as mentioned by mgmnt. But marketing and R&D expense is included in EBITDA calculation. I guess R&D expense will be expensive component which is making it negative.
AI response : Corisâs 58.7% gross margin means that for every âŹ1 in sales, it keeps nearly 59 cents after paying for the materials and labor required to create its diagnostic products.
Negative EBITDA: Weakness in operating expenses
- Definition: EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) goes a step further than gross margin. It subtracts a companyâs operating expensesâsuch as marketing, research and development (R&D), and administrative costsâfrom its gross profit.
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âwe see EPS growing at 20% for the coming three yearsâ : commentary on 3BBDx by Seven Canyons Advisors.
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The reason for growth mentioned in report were asked by them in concall and i understood management clarified none of those are in plan presently.(i.e. 1. mfg in india and supplying to belgium or 2. cross selling a significant protfolio. Management said 10 to 15% cross selling maybe in next year or so. 3. 20% profit growth for next 3 years. Although 3b as stand alone may acheive but consolidated profit growth will be much lower due to unprofitable operations at coris for next few years)
This means that this letter to be not taken at face value.
Disclosure : significant holding.
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Decent numbers.
Revenue should significantly start picking up from Q3.
Few things I liked from ppt-
- âdeveloping a fast protocol Extraction MTB Kit aiming to offer to ICMR for validation and subsequent use in government screening projects.â
- âCoris will contribute to better sales and positive EBITDA in H2 (mainly our Q3).â
âWe expect Coris to be EBITDA-positive next year.â - âdevelopment of assays based on Digital
PCR (dPCR) technology which enables absolute quantification of target nucleic acids. We are hopeful that the
products under this segment will be available for commercial launch by Q3 of FY 2025-26â
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This was an awesome quarter in my books - especially given the really tough YoY comps from Q2 FY25 which the market didnât expect they could meet/beat which is why the stock has corrected so sharply. Few things that stood out to me -
- Coris sales for 33 days was 3.6 cr - so they did approx 10.5 cr for Q2 if spread evenly.
- We learned Q3 is stronger for Coris, so we will get full quarter revenue consolidation + bump from the Belgium gov contract + AMR product sales - could be a 45-50 cr quarter which is huge.
- 3B Standalone sales have also shown strong growth, especially if you strip out the 3.8 cr one time bump in Q2 last year from flu season. In fact India has done better than TruPCR Europe in Q2 which has not been the trend recently.
- On margins, there was a one time impact of 1.4 cr in Q2 for M&A fees which lowered the profitabilty. More improtantly, the EBITDA impact of Coris in Q2 was only (7 lakh) or approx (21 lakh) if we extrapolate for the full quarter - this is much better margins than previously expected even before any efficiency improvements have been made. And Coris margins are guided to be better in H2.
- Company is still actively looking for M&A opportunities in Europe and US and the Coris acquisition has not made a dent in the cash position. There is new clearer guidance on the M&A strategy - âHowever, now with acquisition of Coris BioConcept SRL, Belgium, we have been able to do the first acquisition after a long search & negotiation which will strengthen our credibility in the market as a genuine buyer. We are actively looking for M&A opportunities across globe preferably in the EU and the USA. We are looking for manufacturers or distributors in the IVD segment which can include molecular, microbiology, immunology and
similar segmentâ â Great to see they are looking beyond molecular dx to expand the TAM of the business.
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Another interesting development that can bode well for 3B is FDA mandating DPYD testing for Xeloda. Indian authorities may follow suit at some point.
A Milestone for Patient Safety: FDA Adds DPYD Testing Requirement to Xeloda Label BLOG
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Investor presentation. There is no mention of NSE listing
https://www.bseindia.com/xml-data/corpfiling/AttachHis/351b9755-ddaf-4a3c-967e-07f8f28e5338.pdf
