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 the med tech space. 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 and nearly 98% rally from the IPO price of ₹807. Since its listing on August 17, shares of Molbio Diagnostics doubled from their issue price within 20 days, made a post-listing high of ₹1,686.80 on September 11, and has already corrected 25% from those levels within 11 trading sessions. The stock closed at ₹1,255.60 per share on the NSE, representing a multibagger return of over 57% against the IPO price of ₹807. In today's trading session, the stock soared as high as ₹1,369.20 on the NSE, gaining as much as 9%, as per The Economic Times, though it later pared most of its gains to trade 4% higher at ₹1,305 as of 10:43 a.m.
Molbio Diagnostics has successfully commercialized a differentiated point-of-care molecular diagnostics platform, with the TrueNat platform contributing 86% of financial year 2026 sales. According to Jefferies, the platform is an ultra-portable, battery-operated molecular diagnostics platform that brings high-quality testing to the point of care. The company has expanded beyond TrueNat to include Prorad, a portable X-ray portfolio, and Optrascan, a digital pathology portfolio. Jefferies notes that TrueNat is only the first of several opportunities for Molbio, with the company's innovation pipeline extending well beyond its flagship product. Built after 13 years of R&D, Truenat supports testing for 30 diseases, is patent-protected in 100+ countries, and operates in an oligopolistic market. Compared with platforms such as GeneXpert, Truenat is lighter, faster, and less infrastructure-dependent with a result turnaround time of about 60 minutes. As per Jefferies, Truenat has an installed base of more than 12,500 systems compared to GeneXpert's more than 60,000 systems, making it suitable for primary health centres and remote healthcare facilities.
Molbio's revenue is likely to grow at a Compounded Annual Growth Rate (CAGR) of 22%, led by continued expansion of TrueNat in India and overseas, rapid scale-up of Prorad's portable X-ray portfolio, and commercial rollout of Optrascan in the US. As reported by Jefferies, the company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is likely to grow at a 36% CAGR, while Profit After Tax (PAT) could grow at a 47% CAGR over financial year 2026-2029. 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. Optrascan scaling to 11% of sales by FY29E with 35%+ EBITDA margins versus current losses, while employee costs declining from 10% to 8% of sales and other opex from ~22% to ~18%. EBITDA is forecast to rise from ₹321 crore in FY26 to ₹807 crore by FY29E, with profit after tax increasing from ₹167 crore to ₹527 crore over the same period. EPS is expected to rise from ₹14.5 in FY26 to ₹45.7 by FY29E, while RoCE is projected to improve from 18% to 27% and RoIC from 27% to 40%. Jefferies assigns a target multiple of 40x on Sep-28E EPS due to a high EPS CAGR of 47% (FY26-29E), as per Business Standard.
Revenue concentration remains a key risk highlighted by Jefferies, as 80% of 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. The IPO was one of those rare Indian IPOs that delivered a whopping return to its share allottees, with the public issue available at an upper price band of ₹807 per equity share. Molbio Diagnostics shares debuted on the BSE and NSE at ₹980, delivering over 21% listing gain to lucky allottees. The stock's bull run didn't end there, with shares touching an all-time high of ₹1,686.80 on the NSE, delivering a multibagger return to those who remained invested. However, the stock couldn't sustain at higher levels due to a profit-booking trigger at the all-time high. As per Business Standard, the stock is currently trading 71% above the offer price of ₹807 and has hit an all-time high of ₹1,686.80 and a low of ₹926.35 since its stock market debut.
Molbio's growth story is no longer limited to molecular diagnostics, with the company owning a 70% stake in Prognosys, which provides portable X-ray solutions, and Optrascan giving exposure to digital pathology. As per Jefferies, Prognosys revenue is expected to grow at a 31% CAGR through FY29E, with opportunities in TB screening, veterinary diagnostics, mobile ambulances, home healthcare and security screening. Optrascan is expected to become a more meaningful contributor after its US commercial rollout, with the business processing nearly 1.5 million slides annually by FY29 and generating around ₹300 crore of revenue, including device sales. The currently loss-making platform is expected to become EBITDA accretive by FY29 with margins above 30%. Truenat's share of Molbio revenue is expected to decline from 86% in FY26 to 73% by FY29E, while OptraScan's contribution could reach 11% and Prognosys is expected to contribute 13%. Beyond these core businesses, Molbio is developing multiplex RT-PCR panels for sepsis, fever and bacterial or viral meningitis, a rapid TB triage test, saliva-based alcohol detection, blood-based biomarker testing for TB, and near-patient breast cancer screening. The company is also working with Equine Biotech on veterinary molecular diagnostic assays compatible with the Truenat platform and launched its EDGE programme in 2024 to work with med-tech startups on product development.
