Newly listed Molbio Diagnostics Ltd.'s shares climbed as high as 9% after it became Jefferies' top pick in the med tech space on the back of breakthrough-led growth by the company.
The brokerage initiated its coverage for the stock with a 'buy' rating and fixed its target price at Rs 1,600, implying a 25% gain to its last closing price of Rs 1,255.60.
"We initiate coverage on Molbio with a Buy rating, as it is among the few Indian innovation-led companies that have already demonstrated the success of its flagship platform with several others in pipeline to drive long-term growth," Jefferies said in its research note.
Shares soared to a high of Rs 1,369.20, but pared most of their gains to trade 4% higher at Rs 1,305 apiece on the NSE as of 10:43 a.m.
Jefferies highlighted that Molbio Diagnostics is an innovation-led med-tech company that has successfully commercialised a differentiated Point-of-Care molecular diagnostics platform.
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Therefore, it said, "With two emerging platforms and a robust product pipeline, we believe Molbio is well-positioned for strong growth ahead. We expect Molbio to deliver FY26-29E Revenue/PAT CAGR of 22%/47%, driven by scale-up of existing products and operating leverage. Initiate with a Buy and a PT of INR 1,600. High-Conviction Pick."
Further, the brokerage expects the med tech company to deliver a 22% revenue compound annual growth rate (CAGR), driven by continued Truenat expansion in India and overseas, rapid scale-up of Prorad's portable X-ray portfolio, and the commercial rollout of Optrascan in the United States. Jefferies also expects a sharp 830-basis-point (bps) margin expansion for Molbio.
Truenat is an ultra-portable, battery-operated molecular diagnostic platform which was built after 13 years of R&D. The platform supports testing for 30 diseases, is patent-protected in over countries, and operates in an oligopolistic market. Compared with platform such as GeneXpert, Truenat is lighter, faster, and less infrastructure-dependent.
"In our view, TrueNat is only the first of several opportunities for Molbio. The company has already expanded beyond MDx with Prorad, a portable X-ray portfolio, and Optrascan, a digital pathology platform. With multiple other products under development, we believe Molbio's innovation pipeline extends well beyond the flagship product, Truenat," the brokerage stated.
Molbio Diagnostics IPO Listing
Molbio Diagnostics Ltd. made its stock market debut on the BSE and listed at Rs 980 per share, a 21.43% premium to its issue price of Rs 807. On the NSE, the stock listed at Rs 980, reflecting a 21.43% premium over the issue price.
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