Molbio Diagnostics Q1 FY27 earnings call

Where management's figures differ from the filing

• EBITDA: said ₹104 crores, 25% margin; filed ₹100.58 cr (ex-other income), 24.6% margin. Management's stated EBITDA likely includes other income of ₹3.10 cr; filed EBITDA is computed excluding other income.
• Net profit (PAT): said ₹52.7 crores, ~13% of revenue; filed ₹58.75 cr to owners, 14.4% margin. Gap of ~10%; reason not reconciled on call. Likely reflects PAT attributable to owners (filed) vs consolidated PAT (stated) given loss-making OptraScan minority stake.

What moved the numbers, as management explained it

• Export revenue of ₹67 cr (16% of total) included catch-up of Q4 FY26 Gulf deferrals, inflating Q1 FY27 export optics. (one-off)
• Volume: 164 devices and 62.4 lakh kits sold in Q1 FY27; mix ~75% revenue from test kits (recurring).
• OptraScan loss (~₹9 cr on a 5-month basis in FY26) continues to drag consolidated profitability; FY27 expected to remain unprofitable.
• Other income of ₹3.10 cr appears included in management's stated EBITDA of ₹104 cr vs filed EBITDA ex-other income of ₹100.58 cr. (accounting)

The numbers management led with

• Truenat installed base globally: ~12,500 machines across 90+ countries
• R&D headcount and IP: 153 scientists; 207+ patents; R&D spend scaled from ₹598 mn (FY24) to ₹2.16 bn cumulative over last 3 years
• Test kit capacity utilisation: 58% utilisation on test kits; 42% on devices — automation to enable 2x revenue without major capex
• IPO proceeds allocation: ₹200 cr raised in IPO; ~₹72 cr for automation, ~₹105 cr for integrated Bangalore R&D centre
• Truenat share of Indian molecular TB installations: 90%+ of total molecular TB diagnostic installations in India are Truenat

Guidance on this call

By business

Balance sheet, capex and funding

• IPO raised ₹200 cr; ₹72 cr earmarked for automation and ~₹105 cr for integrated R&D centre in Bangalore.
• Trailing 12-month receivable days at 87 (June) vs 86 (March); inventory days improved to 230 (June) vs 280 (March).
• Capacity utilization: 58% for test kits, 42% for devices; automation capex expected to support 2x top line growth from FY26.
• OptraScan funded for next 2-3 years from prior USD 30 million fresh equity; no further capital required.
• R&D run-rate of 5-6% of revenue to continue; ₹598 mn in FY24 grown to ₹2.16 bn over last 3 years.

The industry, as management sees it

Global POC diagnostics market is ~USD 30 bn growing at 17.9% CAGR; strong policy push (WHO, ICMR, governments) to replace traditional infectious-disease diagnostics (smear microscopy, antigen tests) with molecular PCR. ~56 crore infectious-disease tests are conducted globally per year on legacy methods — Truenat is currently doing ~1.5 crore of these, indicating large headroom. Decentralisation is also a theme in developed markets where centralised high-throughput labs are seen as insufficient for timely diagnosis.

Risks management named

• Truenat device sales are not linear — Q4 historically strongest, year-on-year comparisons can be misleading
• OptraScan will not turn profitable in FY27; meaningful contribution only FY28/FY29
• Export business still stabilising across 90 countries; lumpiness expected
• TB business heavily reliant on government rate contracts (current contract 2-year tenure)

Not answered directly

• India HPV volume guidance (deferred to next quarter)
• Specific NCD platforms under development (held for future call)

Asked for a number, answered without one

• HPV India rollout volumes in first year: Hard to comment at this stage; more clarity by next quarter. TAM is clear as every woman aged 30-45 needs screening under protocol.
• OptraScan commercial revenue timing post US FDA: Muted FY27; not expected to turn profitable in FY27. Meaningful contribution from FY28 and FY29 onwards.
• HPV India and CT/NG Europe commercialization timeline: Held to next quarter; will give more clarity as program deployments progress.
• New non-communicable disease platform revenue timeline: Not guiding at this point; left to a future call. Total addressable universe for these tests would be at least 10x molecular.
• Export market share in international markets: Not quantified; management stated export business started only ~3 years ago and is in stabilization phase across 90 countries.

Every question, with its answer

1. 1. HPV India rollout

   Tushar Manudhane, Motilal Oswal

   Question. On the HPV side, how has the progress been in terms of tenders and test kit offtake?

   Answer, Shiva Sriram, President – Business Development. Truenat HPV underwent an extensive Government of India validation led by AIIMS in partnership with WHO and Gates Foundation, comparing 3–4 indigenous HPV DNA tests. Truenat was the only Indian test to meet all international criteria, and a recommendation has been made to roll it out under the national programme. Government health technology assessment also found it cost-effective at the offered price for the 30–45 age group. WHO prequalification application is underway for international scale.

   Follow-up. What kind of volumes can be expected to start with, at least in the first year?

   Answer. Difficult to comment at this stage; better clarity on specific numbers expected by next quarter. TAM is clear — every woman in the 30–45 age group has to be screened as per protocol, parallel to indigenous vaccine rollout for girls up to age 14.

   Not answered directly.

2. 2. OptraScan US ramp

   Tushar Manudhane, Motilal Oswal

   Question. On OptraScan which recently got US FDA approval, where are you in terms of introduction and customer acceptability?

   Answer, Sriram Natarajan, Executive Director and CEO. OptraScan got US FDA approval not just for the machine but the entire workflow including software and AI — among only two globally with end-to-end certification. US contributes ~60% of the world pathology market and is rapidly adopting digital pathology; OptraScan is positioned in the US with conversations underway with large lab chains. India already has ~35–40 OptraScan installations. Indraneil added that OptraScan is fully funded for 2–3 years from the US$30 mn fresh infusion.

   Follow-up. Timeline for commercial benefit from these conversations with labs and hospitals?

   Answer. FDA approval came in July, so this year will be muted and OptraScan won't turn profitable in FY27. Meaningful contribution expected from FY28/FY29 onwards.

3. 3. Device lifecycle and closed-system model

   Damayanti Kerai, HSBC Securities and Capital Markets

   Question. What is the lifecycle of a single Truenat device — how many tests before replacement — and are consumables exclusive to in-house or can third-party consumables be used?

   Answer, Shiva Sriram, President – Business Development. Truenat is rugged by design for remote deployment; early 2017–18 installations (6–7 years old) are all still running with no replacement. No replacement cycle has kicked in. It is a closed system — proprietary consumables only, no third-party kits. Sriram added that the same device is multi-disease, but consumables differ per disease test.

   Follow-up. Can a single Truenat device be used for testing different indications (e.g., TB and HPV)?

   Answer. Yes — multi-disease platform. Higher-end Duo/Quattro modules are fully random access: same sample for 2–4 diseases simultaneously or different samples for the same disease.

4. 4. R&D budget and capex plan

   Damayanti Kerai, HSBC Securities and Capital Markets

   Question. What R&D spend are you budgeting for the next 2–3 years and what are the focus areas? Any major capex planned for existing platforms?

   Answer, Manan Khokhani, President Finance & CFO. R&D budget maintained at 5–6% of revenue. Indraneil added: of ₹200 cr IPO proceeds, ₹72 cr is for automation (enables 2x revenue without further capex — capacity at 58% test kits/42% devices), and ~₹105 cr for building an integrated R&D centre in Bangalore to consolidate Bigtec's 220+ staff currently scattered across multiple locations. No major capex beyond this; any future manufacturing consolidation will be funded via internal accruals.

5. 5. Subsidiary revenue mix and eliminations

   Nikhil Mathur, HDFC Mutual Fund

   Question. What is the revenue split between Truenat and OptraScan/Prognosys for the quarter and full year? If I take consol minus standalone the numbers don't seem to match — is there any Truenat sales sitting in subsidiaries?

   Answer, Manan Khokhani, President Finance & CFO. Q1 split: ~₹399 cr Molbio, ~₹11 cr Prognosys, OptraScan negligible. FY26 full year: Prognosys ₹154 cr vs consolidated ₹1,446 cr (10%+ from Prognosys). Truenat sales do not sit in subsidiaries — the apparent gap is inter-company elimination between Molbio and Bigtec for kits sent for validation; not material but explains the difference.

   Follow-up. Can you call out profitability of OptraScan and Prognosys — what drag at consol level today?

   Answer. Prognosys: ₹154 cr revenue and ~₹12 cr PAT in FY26 — accretive. OptraScan loss ~₹9 cr for the period consolidated. Full-year FY27: Prognosys EBITDA margin similar to FY26 (~19%); OptraScan not profitable in FY27.

6. 6. Device volume run rate

   Nikhil Mathur, HDFC Mutual Fund

   Question. On device volumes — the run rate from RHP plus this quarter looks low. How should we look at device sales — will they pick up or grow reasonably?

   Answer, Indraneil Borkakoty, President – Corporate Strategy. Historically device sales have ranged 2,200–2,600 units per year, which is also the expectation for the current year. Q-o-Q or YoY comparisons are not the right framework — public-health business is not linear. Q4 is typically the strongest quarter; even so, Q1 test-kit volumes were higher than Q4 FY26 while devices were lower — illustrating the non-linearity.

   Follow-up. Over the next 2–3 years, how will the Truenat test mix shift from public TB to other public programmes (HPV, etc.) and exports, and will the mix shift affect profitability?

   Answer. Profitability won't change materially — pricing across the disease spectrum is similar to TB because it's public health. Mix will shift as HPV ramps up post-validation; specific volume guidance expected by next quarter. TB itself still has significant headroom — both in India (only 8,000–9,000 of 25,000–30,000 TB centres covered) and internationally.

7. 7. R&D allocation across platforms

   Anandha Padmanabhan Anjeneyan, PGIM India Mutual Fund

   Question. Of the 5–6% R&D spend, how much goes to the Truenat platform vs newer platforms like Prognosys, OptraScan, or new areas?

   Answer, Chandrasekhar Nair, Executive Director and CTO. Small percentage goes to newer assays on Truenat; bulk of R&D is going into development of entirely new platforms. Truenat is one of several POC platforms needed — need-gap is very high. Focus areas span infectious disease portfolio expansion and non-communicable disease platforms. Specific platform guidance will come at a future call.

   Partly answered.

8. 8. TB programme long-term visibility

   Anandha Padmanabhan Anjeneyan, PGIM India Mutual Fund

   Question. Almost 90% of domestic revenue comes from public TB programme — what visibility do you have on this programme beyond 1–2 years?

   Answer, Shiva Sriram, President – Business Development. Clear mandate globally and in India to replace smear microscopy with WHO-approved molecular tools; Truenat is one of only two WHO-approved technologies for TB and the only one usable down to point-of-care. India has 25,000–30,000 TB diagnostic centres — only 8,000–9,000 covered so far; significant scaling remaining, which also drives the recurring kit business. Globally active engagement ongoing.

   Follow-up. The remaining 20,000 TB centres not on Truenat — are they using a competitor molecular platform or the older non-molecular technology? How should we read incremental growth given public sector has notified ~93% of target TB cases?

   Answer. Remaining centres are all on traditional microscopy; no competitive molecular replacement happening. Of total molecular installations in India, 90%+ are Truenat — the alternative WHO-approved technology is centralised and sits at district level only. Future scale-up is replacing microscopy, not competitors. Indraneil added Truenat is the only battery-operated WHO-endorsed POC molecular platform.

9. 9. Device and kit realisation

   Anandha Padmanabhan Anjeneyan, PGIM India Mutual Fund

   Question. On realisation per device and per test kit — looks like it has come off Q-o-Q and YoY. How should we read this?

   Answer, Indraneil Borkakoty, President – Corporate Strategy. Not an MRP-led business — pricing varies by contract/volume with multiple agencies. Overall gross margin framework is 60–63% across devices and kits. Realisation moves with product mix (Uno/Duo/Quattro device share) and geographic mix plus forex, more than underlying gross margin trend.

   Partly answered.

10. 10. NCD platform pipeline

    Aniket Singh, Kotak Institutional Equities

    Question. On the R&D investment in non-communicable disease platforms — what type of diseases are you focusing on, how big is the opportunity, and what is the realistic timeline for revenue?

    Answer, Shiva Sriram, President – Business Development. Infectious diseases are a small fraction of total investigations; most NCD/biomarker tests don't get done because presumptive diagnosis is made. Molbio's holistic view is to make all such parameters available at POC with the same philosophy as Truenat — minimal training, battery-operated, easy to use, connected. Specific platforms not guided at this point; TAM for these tests is at least 10x molecular test TAM.

    Not answered directly.

11. 11. Export market share and ramp

    Aniket Singh, Kotak Institutional Equities

    Question. On exports — a certain order shifted from FY26 to Q1 FY27. What is your share in international markets vs the 90%+ in India, and how do you see exports growing?

    Answer, Sriram Natarajan, Executive Director and CEO. Export business started only ~3 years ago (2023) — building distributor network across 90 countries, with registrations ongoing. Past lumpiness (some countries ramping faster, others dragging) is now stabilising. Export ramp will take more time but is being pursued aggressively — expanding LMIC presence and entering developed markets (Europe via IVDR, US via OptraScan and Prognosys). Expects exports to be a very important growth driver going forward.

    Partly answered.

12. 12. European IVDR CT/NG opportunity

    Dhawal Khut, Jefferies India Pvt Ltd

    Question. On European IVDR approval for STI (CT/NG) — what is the right to win, current standard of care (molecular vs non-molecular, centralised vs POC), pricing differential vs existing tests, and potential European testing volumes?

    Answer, Sriram Natarajan, Executive Director and CEO. IVDR is among the most stringent certifications; Molbio is the only Indian company with IVDR certification for Truenat CT/NG (Chlamydia and Gonorrhoeae). Approach: not competing with centralised high-throughput models; targeting primary-level access where central labs don't reach. Even developed markets are finding centralised models insufficient — decentralised POC is gaining traction. Strong belief it will be an interesting market.

    Follow-up. Is current European centralised TB/STI testing molecular or non-molecular, and what is the standard of care?

    Answer. All are molecular/real-time PCR — centralised models use large high-throughput machines requiring sophisticated infrastructure and skilled technicians; many take days to report due to batching requirements. Truenat tests one sample at a time, no batching — different paradigm. User-friendly, no lab infrastructure or skilled technicians needed, battery-operated, no power requirement.

13. 13. CT/NG and HPV commercialisation timelines

    Dhawal Khut, Jefferies India Pvt Ltd

    Question. Commercialisation timelines for CT/NG testing and India HPV opportunity — fair to assume HPV revenue from Q2 FY28?

    Answer, Sriram Natarajan, Executive Director and CEO. Better clarity on HPV volumes expected to be provided next quarter — programme deployment and algorithm setting is work in progress. Holding this question to next quarter.

    Not answered directly.

14. 14. TB rate contract duration

    Dhawal Khut, Jefferies India Pvt Ltd

    Question. Current TB tendering cycle that just completed — is it 2-year or 3-year, and when is the next negotiation cycle with Government of India?

    Answer, Sriram Natarajan, Executive Director and CEO. Two-year rate contract, signed only last month — valid for two years.

Topic by topic, in the order it was spoken

In their words