Molbio Diagnostics' ₹940 crore IPO opens today (August 10–12), priced at ₹768–₹807 per share. FY26 revenue hit ₹1,455 crore (+42% YoY), but PAT came in at ₹164 crore (+18% YoY) — and the post-issue P/E is approximately 57x.
Revenue growing at 42% but profit only growing at 18% — that gap is the whole story here, and a CFO reads it before touching the valuation.
Molbio makes the Truenat platform — a portable PCR diagnostic device used for TB, COVID-19 and 30+ diseases in over 90 countries. Genuinely impressive tech. But when revenue outpaces profit by 2.4x, it usually means one of two things: margins are under pressure, or costs are scaling faster than sales. In Molbio's case, analysts are flagging declining PAT and EBITDA margins alongside rising borrowings. The EBITDA margin is 22.56% — healthy in isolation, but the direction matters more than the number.
Now layer in the valuation. A CFO would ask: what am I paying for? At ~57x post-issue P/E — price-to-earnings is simply market price divided by annual earnings per share — you're pricing in years of future growth. That's not automatically wrong; high-quality compounder businesses earn premium multiples. But when PAT growth (18%) is already lagging revenue growth (42%), you need conviction that the gap closes, not widens.
There's also the OFS signal. ₹739.70 crore of this ₹940 crore raise is an Offer for Sale — meaning existing investors are cashing out, not the company raising fresh capital. Only ₹200 crore goes into the business. A CFO always asks: if the growth story is this compelling, why are insiders selling 79% of the round?
None of this makes it a bad business. It makes it a valuation question, not just a growth one.
📚 Learn the concept: Valuation
Source: https://www.chittorgarh.com/ipo/molbio-diagnostics-ipo/2579/
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