JB Chemicals & Pharmaceuticals is targeting a 12 percent revenue growth in the "short to midterm” term, driven by strong performance in its India and contract development and manufacturing organisation (CDMO) segments, chief executive officer and whole-time director Nikhil Chopra has said.
The private equity giant KKR-backed firm is also evaluating merger and acquisition (M&A) opportunities, with a focus on strengthening its presence in key therapeutic areas.
"If you look at the short to medium term outlook, the business will grow at around 12 percent," Chopra told Moneycontrol in an interview.
The growth would be "backed up by 12-14 percent growth in India as well as CDMO space". The company has also revised its EBITDA margin guidance upwards to 27-29 percent for the upcoming period.
Evaluating M&A opportunities
With a healthy net cash position of Rs 689 crore, JB Pharma is well-positioned to pursue inorganic growth, Chopra said.
"We continue to evaluate assets," he said. Cardiology, women's health, probiotics, and prebiotics are the areas of interest. "If there is a good quality asset available, we will be more than happy to look at that", he said.
"We are not in a hurry," he said, stressing a disciplined approach to acquisitions. "Whatever we have bought in the last three to four years...all have done fairly well for us".
Chopra said JB Pharma has invested over $200 million in acquisitions since 2020, when KKR acquired a controlling stake in the firm. The company acquired Azmarda, which is used in treating heart failure, from Novartis. It acquired probiotic brand Sporlac and IVF portfolio from Sanzyme and signed an agreement to first in-licence and later acquire 15 ophthalmology products from Novartis.
It also acquired Razel (cardiology) from Glenmark and some paediatric brands from Dr Reddy's.
For FY25, JB Pharma reported a revenue growth of 12 percent at Rs 3,918 crore. The domestic business grew by 20 percent to Rs 2,269 crore, while the international business saw a 4 percent increase to Rs 1,649 crore. Operating EBITDA for FY25 stood at Rs 1087 crore, with margins improving to 27.7 percent.
Growth engines
The Mumbai-based company's domestic business has been a key growth engine, outperforming the Indian Pharmaceutical Market (IPM).
Chopra said, "70 percent of our business is in the categories that we are present, whether it is cardiology, probiotics, ophthalmology, women's health, all these categories are growing better than the market.”
He acknowledged a subdued sentiment but is confident of JB Pharma's ability to outgrow the market. "The market will grow at around 7-8 percent," he said, adding that JB Pharma is "able to beat the market performance" due to its focus on progressive categories and better execution.
Its strategy also includes a focus on new product launches, aiming for 3-4 percent of revenue to come from products launched in the previous 24 months. "We launch around 10-12 products," Chopra said.
Internationally, the CDMO business is expected to see significant growth, with Chopra saying the quarterly business will reach Rs 150 crore a quarter by FY27 from the current Rs 110 crore.
Several of its products, including lozenges in Europe and US markets, a “global ORS project”, throat sprays for Australia and New Zealand and Iodine-based products, are expected to enter the market by the year-end.
"We are optimistic that this business will grow at 15 percent for the next three-five years," Chopra added.
The company's international business also showed a positive outlook, with expectations of a high single-digit to 10 percent growth in the upcoming year for markets like Russia and South Africa.
Chopra said the company expects to begin selling 30 products to rest-of-the-world markets by FY27, providing a "pop-up in not only revenue but in margins also".
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