Dolat Capital's research report on JB Chemicals and Pharmaceuticals
JBCPL reported a strong Q1, led by 8.6% YoY growth in domestic formulations (11% QoQ despite a high base) vs IPM de-growth of 5%. The sharp growth was driven by cardiac portfolio (up 24%)– Cilacar and Nicardia as acute declined 1% YoY. Exports (both formulations and API) grew 28% YoY led by higher stocking. Improved product mix coupled with lower opex led EBITDA margins surge to 34% (up 980 bps YoY). Management expects to outperform IPM growth and sustenance in export growth in FY21E. Further, it remains confident of its growth in the medium term led by newer launches in India, traction in CMO and its export branded generics markets with sustenance of healthy EBITDA margins at 20%+.
Outlook
At CMP, the stock is trading at 21x FY22 and 18x FY23 EPS of Rs45.6 and Rs53.8 respectively. Upgrade to Accumulate with a target price of Rs1,130.
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