Prabhudas Lilladher's research report on J.B. Chemicals and Pharmaceuticals
JBCP is one of India’s fastest growing midsized Indian pharma company having superior return ratios. The company has shown sustainable growth momentum driven by 1) geographical expansion of legacy brands 2) improvement in MR productivity 3) Sanzyme and Azmarda acquisition 4) launch of new products and therapies 5) scaling up contact manufacturing business and 6) improvement in FCF generation. JBCP’s strong positioning in domestic markets and focus on scaling emerging opportunities in exports segment, places it in an advantageous position to ride on near term growth prospects. We expect 24% EPS CAGR over FY22-25E. At CMP, the stock is trading at 23x FY24E P/E adjusted for ESOP and amortization charges.
We maintained our Buy rating on stock with revised TP of Rs2,350/share (Rs1950 earlier) as we roll forward, valuing at 25x (23x earlier) Sept 2024E EPS adjusted for ESOP and amortization charges.