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Prabhudas Lilladher Report
We reduce our FY24/25E earnings per share estimates of Jubilant Ingrevia Ltd. by +15% and cut our SOTP based target price to Rs 433 (earlier Rs 462 to factor-
headwinds on global agro chemicals (generics) along with resultant margin pressure across segments and
spreads normalisation in chemical Intermediates.
Jubilant Ingrevia consolidated revenue declined 22% YoY/ 5% QoQ to Rs 10.2 billion (our estimate Rs 10.7 billion) largely led by chemical intermediates revenue decline on lower raw material prices (key raw material Acetic acid prices down 40% YoY).
Ebitda declined 23% YoY/ +1% QoQ to Rs 1.2 billion (our estimate: 1.1 billion) and Ebitda margin came at 11.5% (versus 11.7% YoY/ 10.9% QoQ).
Profit after tax declined 31% YoY/ 1% QoQ to Rs 574 million (our estimate: Rs 500 million), impacted by lower operating profit YoY and higher interest expense.
We believe, FY24E to be muted due to some demand concerns, yet we are positive on long term growth prospects given healthy volume recovery in nutrition and health solutions segment coupled with improved prices and strong traction in contract development and manufacturing organisation to aid absorption of new capacities.
The stock trades at 24 times P/E at earnings per share of Rs 17.6. Reiterate ‘Hold' rating.
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