1 day ago
Motilal Oswal Initiates Buy Coverage on Molbio, Sees 19% Upside
Motilal Oswal has started covering Molbio Diagnostics and recommends buying its shares, with a target price of Rs 1,800.
It thinks the company could grow because more clinics may use its Truenat testing machines and buy test kits for them.
Truenat is used mainly for tuberculosis testing, but Molbio is developing tests for other diseases too.
The brokerage also sees opportunities in cervical cancer screening and sales outside India.
Molbio has newer businesses in portable X-ray imaging and digital pathology.
Motilal Oswal expects the company’s revenue and profits to increase over the next three years.
However, much of Molbio’s business depends on TB tests and a small group of large customers.
Changes in government buying, slower adoption or delays in approvals could make growth harder.
Motilal Oswal began coverage of Molbio Diagnostics with a Buy rating and a target price of Rs 1,800, implying about 19% upside.
The brokerage expects revenue to grow at a 23% compound annual rate from FY26 to FY29, with adjusted profit after tax projected to grow at 50%.
Truenat generated about 90% of Molbio’s FY26 revenue; test-kit sales grew faster than device sales between FY23 and FY26.
Motilal Oswal cites potential growth from HPV assays, international expansion, Prognosys imaging and OptraSCAN digital pathology.
Risks include dependence on TB-related sales and government programmes, customer concentration, and possible adoption, regulatory or product-quality setbacks.
- Who
- Motilal Oswal Financial Services Ltd. and Molbio Diagnostics Ltd.
- What
- Motilal Oswal initiated coverage of Molbio with a Buy rating and Rs 1,800 target price.
- Where
- Molbio’s business spans India and more than 90 countries, according to the article.
- When
- The article refers to FY26 results and forecasts for FY27-FY29; no publication date is provided.
- Why
- The brokerage expects Truenat test-kit growth, new assays, international expansion and newer businesses to support earnings growth.
Growth opportunity
Risks and constraints
Growth outlook
Growth opportunity
Motilal Oswal expects the installed Truenat base, higher kit use, new assays and international expansion to drive growth.
Risks and constraints
The brokerage warns that slower instrument adoption or utilisation could undermine the expected growth.
Business diversification
Growth opportunity
HPV testing, Prognosys imaging and OptraSCAN digital pathology could broaden Molbio beyond TB diagnostics.
Risks and constraints
TB remains a major concentration: TB kits accounted for about 70.2% of FY26 revenue, and OptraSCAN is early-stage and not expected to be profitable in FY27.
Customer and procurement exposure
Growth opportunity
Government and international health programmes could support deployment and demand for Molbio’s products.
Risks and constraints
The top 10 customers accounted for about 83% of FY26 revenue, leaving the business exposed to procurement cycles, policy changes and approval delays.
Key facts
- Rating
- Buy
- Target price
- Rs 1,800
- Implied upside
- About 19%
- Truenat footprint
- More than 12,500 devices in over 90 countries as of March 2026
- Truenat assays
- 43 assays covering 30 diseases; another 34 assays across 22 diseases are under development
- FY26 revenue mix
- Truenat contributed about 90% of Molbio’s revenue
- FY26-FY29 revenue forecast
- 23% compound annual growth, according to Motilal Oswal
- Key cited risk
- TB test kits represented about 70.2% of FY26 revenue and 96% of test-kit volumes
Quotes
Motilal Oswal analysts Tushar Manudhane, Vipul Mehta, Eshita Jain and Khyati Sonthalia
Analysts at Motilal Oswal Financial Services who authored the coverage report
“We believe Molbio is well positioned to capture the opportunity in decentralized molecular diagnostics via its integrated Truenat ecosystem, combining proprietary molecular diagnostic devices with a recurring test-kit franchise. The expanding installed base, widening assay menu and global scale-up provide multiple levers for sustainable growth, while increasing utilization should drive operating leverage.”
financialexpress.com
Sources
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