iifl-logo-icon 1
IIFL

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

JB Chemicals & Pharma: Small in size, but big enough to create a difference

10 Apr 2024 , 12:08 PM

Analysts of IIFL Securities recently hosted JB Pharma’s CEO for an NDR in the US. Mgmt reiterated its focus on improving the revenue contribution of its high-margin, high-returns India and CMO business to 75-80% of overall revenue vs 67% currently, both of which analysts of IIFL Securities believe are 35- 40% Ebitda margin segments for JB. Mgmt expects its India business to consistently outperform IPM growth by 300-400bps led by ramp-up in chronic therapies such as Cardiac & Ophthal, further scale-up in acquired brands, and improving MR productivity. JB has guided for organic Revenue and Ebitda growth of 12-14% and 16- 18% resp. for FY25, which will be further augmented by the Ophthal acquisition. Despite investing ~Rs14bn into acquisitions over CY22-23, JB is almost nearing zero net debt, given its healthy FCF generation of Rs7-7.5bn p.a. Analysts of IIFL Securities value JB at ~32x FY26 EPS (vs ~35x for Mankind) to arrive at their TP of Rs1,950 (15% upside).

JB’s India business is expected to sustain its 300-400bps outperformance vs IPM growth, driven by strong growth in its Chronic portfolio, especially the Cardiac segment which contributes ~45% to JB’s India revenue. Cardiac market in India is growing at 12-14%, while JB’s Cardiac portfolio is growing at 16-18% driven by better-than-market volume growth which is enabling JB to outperform domestic market growth. Although price increases for the NLEM portfolio will be flat for FY25 owing to flattish WPI, only 12% of JB’s India revenue is under NLEM vs 20-30% for a few peers and hence, JB is relatively better-placed than other players to continue driving 5-6% overall price increases for its India portfolio.

JB targets to double CMO revenue from USD50mn to USD100mn over the next 3-5 years, driven by geographic expansion, onboarding new clients, and adding new lifecycle products. While JB's CMO manufacturing capacity is 2bn lozenges, its current utilisation is only ~50- 60% and hence, JB is targeting to add new clients in EU, SA and Brazil, apart from existing clients of J&J, P&G, Reckitt, iNova, Adcock, etc. JB intends to start supplying lozenges for the US market to an existing client.

JB intends to improve its Ophthal market coverage in India, by launching its own dry-eye product and improving the acquired Novartis portfolio through lifecycle mgmt of brands & launch of line extensions. JB’s execution track record in past acquisitions of Sanzyme, Azmarda & Razel provides us comfort on mgmt’s target to accelerate the growth of the acquired Ophthal portfolio to a mid-teens rate vs 8% Cagr over the past 2 years.

Related Tags

  • JB Chemicals & Pharma
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More

Most Read News

Indian Indices surge
23 May 2024|01:29 PM
Sun Pharma's Q4 net profit surges 34%
23 May 2024|12:47 PM
Read More
Knowledge Centerplus
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Knowledge Centerplus

Follow us on

facebooktwitterrssyoutubeinstagramlinkedin

2024, IIFL Securities Ltd. All Rights Reserved

ATTENTION INVESTORS
  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

RISK DISCLOSURE ON DERIVATIVES
  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

plus
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.