Buy JB Chemicals and Pharmaceuticals; target of Rs 2075: Prabhudas Lilladher

Prabhudas Lilladher's research report on JB Chemicals and Pharmaceuticals

J.B. Chemicals & Pharmaceuticals (JBCP) Q3FY25 EBITDA growth of 14% YoY was in line with our estimates. Revenue growth across domestic formulation remained healthy with sharp recovery witnessed from the contract manufacturing business during the quarter. We believe JBCP will continue with its growth momentum driven by 1) geographical expansion of legacy brands 2) improvement in MR productivity 3) scale up in Sanzyme, Azmarda and Razel franchise 4) launch of new products & therapies 5) scaling up contract manufacturing business and 6) improvement in FCF generation. Our FY26E/27E EPS stands cut by 3-4%.

Outlook

We expect EPS CAGR of 23% over FY25-27E. At CMP, the stock is trading at 26x FY27E EPS. We maintain ‘BUY’ rating with revised TP of Rs2,075/share, valuing at 32x FY27E EPS.