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Scaling Healthcare Through Molecular Innovation

Molbio Diagnostics Ltd (Molbio), incorporated in 2000, is a global point-of-care molecular diagnostics company specializing in diagnostic solutions for infectious and non -communicable diseases. Its proprietary Truenat platform is a portable, batteryoperated PCR system designed for resource-limited settings, delivering results within an hour. The company offers 43 tests covering 30 diseases, including TB, COVID-19, HIV, Hepatitis B & C, and HPV. With six manufacturing facilities, operations in over 90 countries, strong R&D capabilities, and WHO-endorsed TB diagnostics, Molbio is a leading diagnostics provider.

* India’s diagnostics market is projected to grow from Rs 1,354bn in FY26 to Rs 2,356bn in FY31 at 12% CAGR, driven by rising chronic diseases, preventive healthcare demand, an ageing population, and expanded healthcare access initiatives. (Source: 1Lattice analysis)

* Molbio delivered strong financial performance over FY24–FY26 with revenue, EBITDA and PAT growing at CAGRs of ~32%, ~17% and ~11%, respectively, driven by increased Truenat platform sales, higher test-kit volumes, product diversification, and improved operational efficiency.

* Truenat offers an integrated, point-of-care molecular diagnostics platform comprising the Trueprep extraction device, Truelab analyzers and ready-to-use test kits, with its Truenat TB test being one of only two WHO-endorsed rapid molecular tests for initial TB diagnosis and rifampicin resistance detection.

* Molbio's manufacturing network offers ~39mn units of test kit capacity, with utilization improving materially from 27% in FY24 to 58% in FY26, positioning the company well for scalable growth.

* The company has strong return ratios, with 3 yr Avg. ROE of 16% and ROCE of 19%, showcasing efficient utilization of the capital.

* The company expanded its diagnostics portfolio through strategic acquisitions of Prognosys Medical Systems and OptraScan, strengthening capabilities across radiology, TB screening, veterinary imaging, digital pathology, and AI-powered diagnostics.

* At the upper price band of ?807, Molbio is valued at ~56x FY26E P/E, which is in line with the industry average. The company enjoys a strong leadership position in the molecular diagnostics segment, supported by a scalable device-andconsumables business model, favorable industry tailwinds, significant growth headroom, and strategic acquisitions. Backed by robust fundamentals and a positive long-term outlook, we recommend a ‘Subscribe’ rating for investors with a medium- to long-term investment horizon.

Purpose of IPO

The offer consists of a fresh issue of ?200cr and an offer for sale (OFS) of Rs 740cr. The purpose of the issue is i) Capex for R&D facility (~Rs.125cr) (ii) Capex for purchase of plant, machinery and equipment (~Rs.81cr) and iii) general corporate purposes. The sellers also include India Business Excellence Fund III (Motilal Oswal Private Equity).

Key Risks

• High reliance on government and aid agency contracts, which contributed ~85% of FY26 revenue, exposes the company to policy and funding-related risks.

• TB diagnostic kits accounted for ~70% of FY26 revenue, creating significant product concentration risk.

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