Blue Jet Healthcare Expects To Maintain FY26 Ebitda Margin In Mid-30s

Pharmaceutical ingredients specialist Blue Jet Healthcare expects to continue its track record of achieving high Ebitda margins in FY26, by keeping it at least in the mid-30s.

The company is also increasing its backward integration capabilities to reduce its reliance on China, according to Chief Operating Officer VK Singh.

“We normally don't give guidance for the future, but if you see our track record, our Ebitda levels have been high and at least in the mid-30s. Considering all that we are doing for all three segments and the platforms that we are creating, this trend would be maintained. Contrast media is our flagship segment and will continue to be the mainstay,” he told NDTV Profit on Thursday.

Blue Jet Healthcare will launch two new products in the contrast media segment in the coming year: one on the hydrogenated side and another on the gadolinium side. Contrast media in pharmaceutical products refers to chemicals that are used to improve the quality of images captured by X-rays and other imaging technologies. 

The contrast media segment saw a 9.5% year-on-year decline in revenue from operations to Rs 101.1 crore in Q4 FY25 from Rs 111.7 crore in Q4 FY24. Singh attributed the fall to the timing of sales recognition, rather than a decline in volumes or invoicing. The top executive noted that the segment remains highly profitable and niche, with a global market worth approximately $7 billion.

Overall, Blue Jet Healthcare reported its highest-ever quarterly earnings in Q4 FY25. Revenue from pharmaceutical intermediates grew 446% YoY. Ebitda margins soared from 28.9% in Q4 FY24 to 41.1% in Q4 FY25. High-intensity sweeteners, another of Blue Jet’s major verticals, saw a 12.5% YoY decline in revenue in Q4 FY25. 

The company’s revenue growth was fuelled by higher sales volumes and effective cost optimisation strategies. A key driver was the supply of a complex chemistry-based advanced intermediate for a patented cardiovascular product, which faces no generic competition until at least 2031, with some settlements delaying generics until 2040. “This has been the key growth driver,” Singh noted. 

Blue Jet Healthcare is projecting long-term revenue growth of 15% to 20% Compound Annual Growth Rate. The company anticipates strong traction in its Contract Development and Manufacturing Organisation business, particularly from European innovators who are increasingly looking to de-risk their China exposure. 

The company is also targeting high-growth areas such as glucagon-like peptide-1 (GLP-1) diabetes therapies, cardiovascular, and gynaecology intermediates. Singh noted that Blue Jet Healthcare is tracking a $200 billion global opportunity for small-molecule CDMOs. India holds just 4-5% market share, leaving “tremendous headroom to grow".

“For a small-molecule company like ours, it’s a $80 to $100 billion opportunity,” the COO said. 

A key factor in future growth and margin improvement will be backward integration. Singh revealed that a new capacity for backward integration is expected to come on stream in the second half of the current financial year. 

This move is anticipated to localise about 90% of what the company currently buys, significantly minimising dependence on China and providing an "uptick" in gross margins. He assured that the regulatory pathway for this change has already been addressed. That is because the in-house manufactured product has already been approved.

The company has also optimised its research and development capabilities. Having doubled its R&D capacity about 18 months ago, the company plans to double it again in the next 12 months and build new platforms. Singh mentioned that at the R&D level, Blue Jet Healthcare is working on 20 molecules, with about six of them in Phase III and nearing commercialisation.

The company has approved a fundraising plan of Rs 1,500 crore. It will support capacity additions and new R&D centres.