Hello Sir,

Hope you are doing well.

I was recently reading about 3B Blackbio DX.

For sometime, it 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 normalization of Covid-19 impact, the company is again on a growth path with annual sales of Rs 90 crore.

Below, we have shared points from the Nov’24 presentation of the company to understand management’s views regarding the outlook for the diagnostic kits business.

 

Before that: Recently, we recommended a cyclical company related to food processing sector to our Alpha and Alpha + members

In last 10 years, this stock has gone through 2 major upcycles:

  • FY 15 – FY 18 – From FY 15 lows, the PAT of the company increased 10x by FY 18 and the stock price increased almost 20x from lows
  • FY 20 – FY 21 – In FY 20, the company incurred loss and in FY 21 the company recorded highest ever profit and the stock went up 5x from lows

FY 23 and FY 24 were again periods of downcycle. FY 25 started on a good note. Valuations are attractive and in case of an upcycle, it may again go through earnings and valuations rerating. You can read about it HERE

 

3B Blackbio DX – Points from Nov’24 presentation

– Molecular Diagnostics (MDx) Business:

  • 3B BlackBio Dx Limited is involved in the design, development, manufacturing, and commercialization of rapid tests, qPCR tests, and NGS-based molecular diagnostic kits
  • Company has developed over 120 assays for molecular testing and has many more in the pipeline
  • Company was the largest supplier of COVID-19 RT PCR tests in India, having supplied over 16 million tests to more than 400 labs
  • Company is expanding into new territories in Europe, Africa, Southeast Asia, and the Middle East
  • Company is exploring partnerships in untapped markets in Africa, LATAM, APAC, and the Middle East
  • Company does not pay royalties to any company and develops all its assays in-house
  • Company operates through three main sales models in India: tender sales, reagent rental model, and other supplies
  • Company has over 15 long-term contracts (reagent-rental model) in place and projects 20-25% business from these contracts

Source: 3B Blackbio Nov’24 presentation

 

– Diagnostic division performance Q2 FY 25 vs Q2 FY 24:

  • Revenue from operations increased from Rs 1,465.63 Lakh to Rs 2,457.55 Lakh
  • EBITDA rose from Rs 1,059.54 Lakh to Rs 1,929.17 Lakh
  • PBT increased from Rs 1,029.81 Lakh to Rs 1,902.06 Lakh
  • PAT grew from Rs 781.26 Lakh to Rs 1,457.77 Lakh
  • Export sales for molecular diagnostic kits increased from Rs 170.27 Lakh in Q2 2023-24 to Rs 366.50 Lakh in Q2 2024-25
  • TRUPCR® Europe sales increased by 51% in Q2 2024-25 compared to Q2 2023-24
  • Company anticipates a growth rate of 20-25% for the full fiscal year

– Product Segments:

  • The company offers a wide range of products in oncology, infectious diseases, and antimicrobial resistance
  • Company has developed a range of rapid tests for Anti-Microbial Resistance (AMR)
  • Company offers Next-Generation Sequencing (NGS) based tests for solid tumors
  • Company is also developing Digital PCR (dPCR) based assays

– Other Important Points:

  • Company has an exclusive channel partner in India, Vivid Global Technologies (VGT), since 2013
  • VGT works exclusively for 3B and has a dedicated team and office space
  • Company has a subsidiary in the UK, TRUPCR® Europe Limited, with a comprehensive setup for sales, marketing, technical support, and R&D

(End)

 

Disclaimer: This is not a recommendation to buy/sell 3B Blackbio DX. The securities quoted are for illustration only and are not recommendatory.

 

Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/

 

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