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Systematix Report

Jubilant Pharmova Ltd.'s reported revenue at Rs 2,122.5 crore in Q3 FY26, up 16.5% on a YoY basis and up 7.9% on a QoQ basis. Revenue growth was broadly in line with the brokerage's expectations, but Ebitda margins were materially lower. Ebitda stood at Rs 289.5 crore in Q3 FY26, up 0.7% on a YoY basis and down 15.2% on a QoQ basis. Ebitda margins stood at 13.6% and was lower 214 bps on a YoY basis. Ebitda margins came in lower for three reasons, which in the brokerage view are transient and hence a recovery is expected.

• the full cost of the newly commercialized (Line 3) at Spokane sterile CMO facility started hitting the P&L.
• The Montreal facility remained shut owing to ongoing remediation and the entire fixed costs related to the facility remained unabsorbed. On top of the typical fixed costs, there were also remediation spends.
• Lower margins (25% during the quarter vs 9M average of 33%) in allergy immunotherapy business.

Lower production during the quarter impacted the margins but should normalise in subsequent quarter. Going forward, as utilizstion ramps up at the new line (Line 3), the brokerage expects to see a disproportionate favorable impact on Ebitda.

Line 3 is expected to be fully utilized over three years and we estimate incremental Ebitda contribution of Rs 250 crore to Rs. 300 crore on FY25 base.

The key risk to near term earnings revival is Montreal facility which is facing compliance challenges (nine observations at a most recent inspection in November 2025).

Based on the 90-day window, before which the US FDA needs to update the facility status post inspection, Systematix expects a decision on Montreal soon. The Montreal facility is important to Jubilant pharmova, as multiple radiopharma products are manufactured here and ongoing challenges can have a negative impact on radiopharma business.

The brokerage has tweaked its forecasts on Jubilant Pharmova and roll over to FY28E EPS and retains Buy rating with a revised target price of Rs 1325 (25x FY28E EPS).

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