JB Chemicals Q4 Results Review - Domestic Business, CMO To Drive Future Growth: Nirmal Bang

Nirmal Bang Report

JB Chemicals and Pharmaceuticals Ltd.’s Q4 FY24 results missed our estimates. Revenue was in-line with our estimate. Ebitda margin dropped due to increased other expenses and lower gross margin compared to the previous quarters.

In Q4 FY24, revenue grew by 13% YoY, driven by double-digit growth in domestic formulations, largely supported by the chronic segment and the acquired pediatric portfolio. There was also some contribution from the Ophthalmology portfolio (Novartis) and Razel (Glenmark). Ebitda margin guidance has been improved to 26-28% (excluding ESOPs), with a bias towards the higher end of the range.

JB Chemicals remains our preferred pick within pharma, mainly underpinned by aggressive growth focus in the domestic+ plus contract manufacturing organisation business, high return ratios, lean balance sheet and healthy free cash flow despite acquisitions.

In the domestic market, it continues to outpace industry growth with Life Cycle management of legacy brands and new launches. Also, strong performance of the acquired businesses is boosting overall domestic growth.

Recently, the company has entered into the Ophthalmology segment with an agreement with Novartis. Growth in margin-accretive CMO business is also expected to remain strong on the back of geographical expansion and product diversification.

We maintain Buy on JB Chemical with a revised target price of Rs 2,039, valuing it at 23 times FY26E enterprise value/Ebitda.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.