The company’s agro-chemical and molecular diagnostics businesses now have an equal share in its revenues, with the latter accounting for more than 90 per cent of the bottom line.
“The share of revenue from the segment is expected to be three-fourths by next financial year,” Dubey says. Kilpest India also happens to be the only listed company in the molecular diagnostics space.
The diagnostics leap
After spending a couple of years in research after 2011, the first breakthrough came for the company when it developed its first kit for blood cancer, which set a precedent for many other kits in the years to come.
Another major success came in the form of the H1N1 diagnostic kit, India's first home-made test for the pandemic commonly known as swine flu. Currently, the company functions with 10-member team for both research and production/marketing divisions.
Considering the scope of growth and opportunities in this space, Kilpest is planning to unlock its value through a demerger. “The proposal has been made before our board of directors and we have also sent a notice to the BSE regarding the same. We are hoping to get this through by the end of 2020-21,” Dubey tells Business Standard.
Kilpest India has become a hot pick for investors ever since it received the ICMR approval. Its shares are currently trading at around Rs 142 apiece, more than double the closing price of Rs 70.65 on April 1. The company’s market capitalisation has now crossed over Rs 100 crore.
Around 38 per cent of the company is owned by the promoter family, while the rest is owned by retail investors. If you look at the company’s shareholding, you will find no institutional investor so far. However, it features marquee investor Varun Daga, founder and managing director of Girik Capital, who holds a 7.33 per cent stake.
“Kilpest India is expected to become debt-free by next financial year and has no plans to raise fresh funds in near future. There will be some working capital debt, but it will be negligible,” Dubey says.
The company is planning to start a new manufacturing unit soon and will be focusing on scaling up its exports. It started exporting in early 2019. The present share of exports in its overall revenues is seven to 10 per cent, which it expects to widen to 20-30 per cent in the coming financial year. The company is so far exporting its various diagnostic kits to the UK, Africa and West Asia and has also managed to penetrate the US market.
The Covid-19 test kit has brought the company on investors’ radar, but this limelight is precarious. Since many other companies
have also received approvals to build the kits now, Kilpest would need to ramp up its production significantly if it has to maintain the initial lead.