Healthcare diagnostics firm Molbio, renowned for its flagship product Truenat, has reported a loss of Rs 3.4 crore in FY23, a stark contrast to the Rs 215 crore profit recorded in FY22. The company’s revenue plummeted by 57% to Rs 332 crore in FY23 from Rs 776 crore in the previous fiscal year, as per its annual financial statement accessed from the RoC.
Molbio, which achieved unicorn status after an $85 million funding round led by Temasek in September 2022, saw its revenue peak at Rs 1,272 crore during the pandemic in FY21. However, the subsequent decline was significant, with revenue falling to Rs 332 crore in FY23. This downturn was exacerbated by the high fixed costs and the steep drop in demand post-pandemic.
Truenat, Molbio’s real-time IoT-enabled testing kit for over 30 diseases, remains a key product, primarily used for diagnosing Tuberculosis. Despite this, the company’s sales from Truenat, Micro PCR workstations, reagent kits, and cartridges could not sustain the high revenue levels seen during the pandemic.
In FY23, Molbio also earned Rs 5 crore from interest and gains on financial assets, bringing its total revenue to Rs 337 crore. However, the procurement cost of raw materials and medical components, which accounted for 44% of total expenditure, decreased by 47.4% to Rs 143 crore.
Operating expenses, including employee benefits, travel, legal, advertising, promotional activities, and freight, totaled Rs 328 crore in FY23, down from Rs 486 crore in FY22. Despite cost reductions, the 57% revenue decline and fixed cost pressures pushed the company into a loss-making position.
Molbio’s financial metrics, including its ROCE and EBITDA margin, worsened to 2% and 14.5%, respectively. On a unit level, it spent Rs 0.99 to earn a rupee in FY23.
To date, Molbio has raised Rs 970 crore, with its promoters through Exxora Trading LLP holding 41.7% of the shares, followed by Motilal Oswal with a 12.96% stake. The company claims it closed FY24 with Rs 850 crore in revenue and has ambitious plans to strengthen its global presence and launch new products in the Indian market. Molbio targets a revenue of Rs 1,200 crore and plans to raise Rs 2,200 crore to Rs 2,400 crore via a public listing in FY25.
Molbio faces challenges in convincing investors of its execution capabilities amidst changing regulations and perceptions toward portable testing kits. While Truenat remains relevant due to the prevalence of tuberculosis, the company must show rapid progress in expanding to other disease diagnostics and managing cost pressures from lower-cost competitors.
