Jefferies Initiates Coverage on Molbio Diagnostics with 'Buy' Rating

Jefferies has identified Molbio Diagnostics as a high-conviction pick in India’s medical devices sector, initiating coverage with a 'Buy' rating and a price target of INR 1,600. The brokerage firm's positive outlook is based on the med-tech company's successful commercialization of its innovative molecular diagnostics platform.

Growth Driven by Flagship Platform

Jefferies highlighted Molbio’s flagship Truenat platform, which it notes operates in an oligopolistic market. Developed over 13 years, Truenat is a portable, battery-operated molecular diagnostics system that enables high-quality testing at the point of care for approximately 30 diseases. The platform accounts for an estimated 86% of the company's fiscal 2026 sales.

The research note points out Truenat's competitive advantages over rival platforms like GeneXpert, stating it is lighter, faster, and less dependent on infrastructure. With Molbio's revenue at roughly $130 million compared to GeneXpert's $3 billion scale, Jefferies sees significant growth potential for the patent-protected technology.

Strong Financial Projections

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Jefferies forecasts a strong financial trajectory for Molbio through fiscal years 2026-2029. The firm projects a revenue compound annual growth rate (CAGR) of 22% and a profit after tax CAGR of 47%, driven by scaling existing products and increasing operating leverage.

Key factors expected to fuel this growth include:

• A sharp margin expansion of approximately 830 basis points.
• Rising test-kit capacity utilization, projected to increase from 58% in FY26 to 77% by FY29.
• The scaling of its Optrascan digital pathology platform, expected to reach 11% of sales by FY29.
• Declining employee and operating costs as a percentage of sales.

Jefferies' valuation is based on a target multiple of 40x the company's estimated September 2028 earnings per share.