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Nirmal Bang Report
Jubilant Pharmova Ltd.'s Q3 FY24 results missed our estimates on both revenue as well as margin front on account of weak performance in contract research, development and manufacturing organisation and generic businesses.
Strong double-digit sales growth was witnessed in radio pharmacy and allergy businesses. The radio pharmacy business continued to scale up and the company has reiterated its guidance to achieve Ebitda margin in mid-single digit over the medium term.
Jubilant Pharmova has sold its entire stake in Sofie Biosciences for ~$140 million, we believe that company will use this to reduce the debt burden.
For one or the other reasons, the company has consistently disappointed on margins and profitability in the past. Hence, stability across businesses is a must to re-rate the stock.
However, we maintain our 'Accumulate' with a target price of Rs 570 due to valuation comfort (trading at 15 times December 25E earning per share and multiple drivers for improving margins as well as growth.
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