Kilpest India Ltd

Kilpest india came up with good set of numbers for the quarter and year to end. Few our key highlights from the investor presentation

1. Achieved big milestone by reaching non covid sales of 50 cr on which NPAT is 26 cr converting in to margin of 51 %.
2. Q4 of 2022-23 achieved turnover of 14.5 cr vs 11.5 cr in Q3 registering a growth of 25 %.
3. Export sales is 10 cr out of 50 cr. Consistently growing from nil in 2019 to 10 cr in 2023
4. On a investment of 9 cr for The UK subsidiary in September 2022, it has achieved turnover of 2 cr in the in current year. Expecting the JV company to touch turnover of 10 cr in current year.
5. In 2018 company has 50 product whereas now in 2023 it has reached to 120 products.
6. Participating in international tenders directly and through our distributors with which we have secured a few annual rate contracts for our assays in a few Middle-East, South-East Asian and European countries. These contracts will add value to our business and give a strong market standing to our products globally.
7. Discussion with large international distributors for various projects which will be materialized in the next financial year.
8. Starting June’2023, the UK subsidiary will start the manufacturing of assays and the assays to EU customers will be supplied as “Made in UK”
9. The UK subsidiary has received a high volume annual order of Hemato-Oncology assays from a very reputed lab in UK.
10. The UK subsidiary is in discussion with various EU distributors as well to expand the reach in the yet untapped countries across Europe

Big Research and development to yield fruitfulness in years to come

11. Our Rapid Kit manufacturing plant is ready & we are optimizing the products in R&D which have market potential, other than COVID Testing Kits.

The Need: As per WHO, AMR remains one of the top 10 global public health threats facing humanity, associated with the deaths of 4.95 million people in 2019. AMR is also a threat to the global economy, with impact on international trade, heath care costs and productivity predicted. If no action is taken, AMR would cost the world’s economy USD 100 trillion by 2050.

The Solution: We are pleased to inform that we have successfully completed the collaborative R&D of the Rapid Tests for Anti-Microbial Resistance (AMR). Soon after the necessary regulatory approvals, we shall be launching below products to cater to the above AMR segment:

12. Will be launching our NGS based “TRUNGS®️ Solid Tumor Panel” for Cancer Diagnosis and clinical management in the “European Society for Human Genetics (ESHG)” Conference that will be held in Glasgow, Scotland between 10th June – 13th June 2023
13. Amalgamation matter is in final stages and we hope that the process will be completed soon. Scheme of Amalgamation
14. Proposed Listing on National Stock Exchange
15. M&A valuations globally have gone high due to demand from molecular diagnostic companies which are flushed with cash from COVID. We will only go for the acquisition if it makes financial sense and meets our internal IRR criteria. We would also be looking at share buyback in FY23/24 post merger, if we are unable to secure a desired acquisition candidate
16. Looking at the valuation company has 155 cr cash in hand which they are proposing for utilisation against MNA deal
17. Current enterprise value 158 cr against which company achieving profit after tax of 26 cr.
18. Unlisted space for such molecular company is trading at much higher valuation compare to kilpest.
19. A company growing at 30% YOY from last 5 years and having a NPAT margin of 50 % is available at pe of 12. Lot of room for valuation growth once the above the things start to materialise.