Zydus today provided 30000 Antibody test kits to ICMR
Important update from Kilpest:
- Sold 220,000 tests to date with average realisation of 750/test
- Although they ramped up capacity to 50k tests/day, they are struggling to get orders due to competition and gov flip flops on tendering
- They have an updated test approved by ICMR on 30 May which is supposedly a better product
- Hoping to maintain the same run rate for June which can be revised upwards if they win a big tender
With ~3.5 mn tests conducted so far in India, Kilpest has provided ~6.3% of testing capacity so far. With 16.5 cr of revenue booked in the first 2 months of FY21 (only from Covid tests), 3B Black Bio has also likely exceeded total revenues in FY20.
Latest Kit Evaluation
This Tender was cancelled by ICMR.
Let us see if there is revised tender which can be supplied by Newly evaluated KIT
What could be ebitda margin with such low realizations?
They have reduced prices from 950/test to 750/test or even lower as 750 is avg realisation.
To win big tender they have to be within 15% of L1.
Risk of low margin and single digit NPM?
3B blackbio had 40%+ OPM in past, all due to import duty 
Raw material prices must have cooled down, still difficult to judge.
company was aiming for 20% margin at 1000 rs price as interacted previously with insider.
This is a major negative surprise on price & margin side…
From the disclosure it seems that kits are trading like commodity and margins are laser thins depending on supply side competition
At 50000 per day capacity company is not achieving even 10% capacity at present which will further dent on margin.
Seems like competition is from chinese suppliers and govt is focussing on cost only because of which conpany is not getting any big orders from govt side…
Margins will be low, possibly single digits, given how gov works and the number of players competing for what’s currently a small pie. Gov has made some noises about scaling up testing and giving preference to indigenous players but that’s unproven for now…
Personally I am pleased with the validation of 3B Black Bio, third party due diligence and site visit done by ICMR, and national recognition received in a short time frame. That’s quite a big achievement for a ~100 cr mcap company out of Bhopal. It’s what they do to leverage this going forward that matters. Don’t think it’s advisable to be invested purely for a one-off Covid bump to their results…
Testing Kit developed at Rs 150 only.
As per my understanding and info no they are not buying from Kilpest and my reason for this is
- No mention of TRUPCR logo on product discription.
- Nothing is mentioned by kilpest in its recent update.
- I did not find any Lyophilised( specific tech) based test kits in Kilpest test portfolios.
Kilpest wins 2 Covid testing orders for total of 19 lakh tests worth 65 crore.
Really huge orders - nearly 40% of total tests conducted in India till date (50 lakh). Hope it means gov has got serious about testing! Anyone have more info on these orders and any other winners?
That’s good. looks like for the whole year revenue can cross Rs. 100 Crores.
Its a great news if they are able to maintain even 10% margin. On the positive side kilpest has proved that they are able to compete with importers and are front runners in capturing market share.
Company has updated version from two tube assay to single tube multiplex assay.
This will help company in bringing more orders and face competition.
Entry into medical electronics
Dixon has bagged an order from Molbio Diagnostics for manufacturing RT-PCR (Reverse transcription polymerase chain reaction) devices used for testing 30 diseases, including COVID-19 and tuberculosis. Trial runs are anticipated to commence in July and the commercial production will start once the device passes the necessary quality and regulatory requirements. While the initial order size in small (Rs 30 crore), this opens up newer business opportunities in the medical devices equipment manufacturing segment in both domestic and international markets.
via Moneycontrol Pro (paywall) article.
Molbio seems to manufacture machines whereas Blackbio makes kits. Can folks familiar with the technology throw light on this competition?
Strong pre-Covid results from Kilpest. FY 20 topline and bottomline growth was 27% and 47% respectively.
https://www.bseindia.com/xml-data/corpfiling/AttachLive/a18ee0e1-dcda-4b65-b28d-2c8be4f19d5c.pdf
Did some very high level projections for FY21 - this is a base case and leaves room for upside in my view. In any case Kilpest should achieve FY20 sales in the June quarter itself and double it by July.
Will be keeping an eye on any insider buying, export orders or further large tender wins.
disc. Invested
