Buy Blue Jet Healtchare; target of Rs 965: Motilal Oswal

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26 Aug, 2025 12:21

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Blue Jet Healthcare (BLUEJET)’s 4QFY25 revenue jumped 85% YoY to INR 3.4b, primarily driven by higher sales in Pharma Intermediates (PI). Gross margin expanded 170bp YoY to 54.9%, while EBITDAM stood at 41.1% (up 12.3pp YoY). PAT came in at INR 1.1b vs. our estimate of INR 1.1b. In FY25, the company delivered a sharp improvement in operational and financial metrics, fueled by new capacity additions, better operating leverage, and tight cost control. EBITDA expanded notably, with 75% average capacity utilization for BLUEJET reflecting strong demand and efficient execution. Pharma intermediates and APIs saw healthy offtake, especially in CVS intermediates, with firm visibility into FY26. The contrast media segment recovered in 2HFY25, with commercial production now underway and new launches expected in FY26. The high-intensity sweeteners remained stable despite global headwinds.

Key investments in FY25 included 157KL of new capacity, a commercialized contrast media block, and an INR 400m R&D center focused on GLP-1s and advanced chemistries. Mahad Unit-3 remains on track for 2HFY26E, and a fresh INR3b capex was incurred in FY25. With optimized freight and power costs and an INR 15b fundraise underway, BLUEJET is well placed for sustained growth. Given the strong commentary, we raise our EBITDA/PAT estimates by 8%/7% for FY26 and by 12%/11% for FY27. We expect a revenue/EBITDA/PAT CAGR of 27%/30%/25% during FY25-27. The stock is trading at a P/E of 28x on FY27E EPS of INR 27.6 and FY27E EV/EBITDA of 21x. We reiterate our BUY rating on BLUEJET with a TP of INR 965.

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