Jefferies initiated coverage on Molbio Diagnostics with a buy rating on September 30, calling it a high-conviction top pick. The bank set a price target of ₹1,600, suggesting a 27% upside. Jefferies said, "With multiple other products under development, we believe Molbio's innovation pipeline extends well beyond its flagship product."
Stocks to Buy: A new listing has become Jefferies' latest 'high-conviction top pick'; Check upside targets
Molbio Diagnostics has successfully commercialized a differentiated point-of-care molecular diagnostics platform, Jefferies wrote in its note, adding that with two emerging platforms and a robust product pipeline ahead, the company is well-positioned for strong growth ahead.
By Hormaz Fatakia
Global investment bank Jefferies has initiated coverage on recently listed Molbio Diagnostics Ltd. with a "buy" rating, calling it a "high-conviction top pick".
In its note on Wednesday, September 30, Jefferies ascribed a price target of ₹1,600 for Molbio Diagnostics, which implied an upside potential of 27% from current levels.
Since its listing on August 17, shares of Molbio Diagnostics doubled from their issue price within 20 days of listing, made a post-listing high of ₹1,686, on September 11, and has already corrected 25% from those levels within 11 trading sessions.
Molbio Diagnostics has successfully commercialized a differentiated point-of-care molecular diagnostics platform, Jefferies wrote in its note, adding that with two emerging platforms and a robust product pipeline ahead, the company is well-positioned for strong growth ahead.
The TrueNat platform, which contributed 86% of Molbio's financial year 2026 sales, is a ultra-portable, battery-operated molecular diagnostics platform, bringing high-quality testing to the point of care. Jefferies says the platform has a significant growth runway ahead, citing its $130 million revenue, compared to the $3 billion scale reported by its peer GeneXpert.
Jefferies wrote further that TrueNat is only the first of several opportunities for Molbio, with the company already having expanded to Prorad, a portable X-ray portfolio, and Optrascan, which is a digital pathology portfolio. "With multiple other products under development, we believe Molbio's innovation pipeline extends well beyond its flagship product TrueNat," the note said.
Molbio's revenue is likely to grow at a Compounded Annual Growth Rate (CAGR) of 22%, led by a continued expansion of TrueNat in India and overseas, a rapid scale-up of Prorad's portable X-ray portfolio, and the commercial rollout of Optrascan in the US, Jefferies projected.
The global investment bank also expects Molbio's margins to expand by 830 basis points led by test-kit capacity utilization rising from 58% in financial year 2026 to 77% by financial year 2029 and Optrascan scaling to 11% of the overall topline by financial year 2029, and employee costs declining to 8% from 10% of sales.
As a result, the company's Earnings Before Interest, Tax, Depreciation and Amortisation is likely to grow at a 36% CAGR, while its Profit After Tax (PAT) could grow at a 47% CAGR over financial year 2026-2029, Jefferies projected.
Revenue concentration is a key risk highlighted by Jefferies in its thesis, as 80% of its financial year 2026 revenue came from the B2G segment, while 70% came from TB testing.
In an upside scenario, Jefferies sees Molbio's price target at ₹1,970, which implies an upside potential of 57% from current levels. In this case, the company's sales grow at a 25% CAGR, while EBITDA grows at a 45% CAGR over financial year 2026-2029.
Shares of Molbio Diagnostics ended 2.8% higher on Tuesday at ₹1,272. The stock is up 17% in the last one month.