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We have always enjoyed digging up really small companies in the market cap range of Rs 20 crore to Rs 500 crore. Earlier, we could even recommend a Rs 100 crore market cap stock to our Premium Members; however, now it's almost impossible considering liquidity issues.
Nevertheless, it's always good to read about such companies and an individual investor can always look for potential investment opportunities
So, for sometime, Kilpest India has been under our radar because of its Diagnostic kits business - TRUPCR. This company was reporting 25-30 crore annual sales before Covid-19; however, in FY 21 its sales jumped up to Rs 227 crore with PAT of Rs 114 crore. With the dwindling impact of Covid-19, the annual sales are again down to Rs 40-60 crore.
Below, we have shared our notes (unedited) from the Sep'22 presentation of the company to understand management's views regarding the outlook for the diagnostic kits business. Hope you find the details useful in your search of investment opportunities.
[Before that]: Recently we released a New Stock Recommendation for our Premium Members. It's a leading Pharmaceutical company with global leadership in its product segment, net debt free and available at just around 11.5 times FY 23 (E) earnings. Can read about the company HERE
You too can get it along with other recommendations, by subscribing HERE
Kilpest India - Notes from Sep'22 presentation
- Our subsidiary, 3B BlackBio Biotech India Limited is now over a decade old and is now regarded as one of the most reliable molecular diagnostic company in the healthcare market.
- We understand that everyone is keen to know the way forward for the company post COVID pandemic. Our growth rate has been consistent since pre-covid period and we have been achieving a growth rate of 30-35% year on year.
- Pre-COVID, i.e., in FY 20 we had a revenue of Rs 15.36 crore (diagnostic kits) which should be taken as the baseline for onwards. In FY 22, the Non-COVID Revenue is Rs 26.53 crore which shows that we are going strong on our growth trajectory of over 30% for Non-COVID products (YoY).
- With our clearly defined strategic priorities, we will hopefully continue to have a growth rate of 30-35% for the year 2022-23 as well.
- With COVID, the number of labs have increased and we are trying to increase our footprints for NON-COVID products in these labs. Also, we are launching new products out of R&D.
- Exports - We are expanding our footprints in the international market where we are now present in more than 29 countries which including USA, UK, & countries spanning Europe, Africa, Middle East & APAC.
- Export sales - FY 20 - 0.66 crore, FY 21 - 1.98 crore, FY 22 - 6.18 crore
- UK subsidiary - We are proud to state the fact that your subsidiary company 3B BlackBio has launched its own subsidiary company in the United Kingdom after entering into a Joint Venture Agreement with its European Distributor, HS Biolabs Limited based in Manchester, UK.
- TRUPCR Europe Limited has been launched in the Manchester, United Kingdom with a vision to accelerate the growth of TRUPCR® range of molecular diagnostic kits within the European market.
- TRUPCR Europe Limited has started participating in International Conferences from which we expect to get more traction.
- With these conferences, the visibility of TRUPCR Europe has increased and we are getting inquiries for providing distributorships and OEM solutions through which we will expand our footprints across Europe.
- Rapid Kit Business & Next-Gen Sequencing (NGS) Verticals - Our Rapid Kit manufacturing plant is ready & we are optimizing the products in R&D which have market potential, other than COVID Testing Kits.
- We will be launching some novel products in FY 2022-23 which are currently under R&D Stage which will allow us to capture a bigger market segment with better price realization.
- The company has again started working on the R&D and validations of NGS kits and we are developing products that will cater to the global market and not India alone.
Disclaimer: This is not a recommendation to buy/sell Kilpest India. These notes are as announced by the companies on exchanges and only for the purpose of information and education.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Details of Associate: Not Applicable
Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.
We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.
Disclaimer: You can access it here - LINK
Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – No
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
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