ICICI Direct recommended is bullish on Jubilant Life Sciences has recommended buy rating on the stock with a target price of Rs 710 in its research report dated May 20, 2019.
ICICI Direct's research report on Jubilant Life Sciences
Q4FY19 revenues grew 5.9% YoY to Rs 2385.6 crore (I-direct estimate: Rs 2434.7 crore). Revenues in the pharma business grew 13.5% YoY to Rs 1399 crore (I-direct estimate: Rs 1436.3 crore) on the back of strong growth
in CDMO segments. Life science ingredients (LSI) revenues declined 5.8% YoY to Rs 912 crore (I-direct estimate: Rs 922.1 crore). EBITDA margins contracted 533 bps YoY to 15.0% (I-direct estimate: 20.2%) mainly due to
multiple one-offs. EBITDA de-grew 21.8% YoY to Rs 358 crore (I-direct estimate: Rs 492.1 crore). Also, Rs 234.8 crore of exceptional item pertains to the settlement payment to IFC. Adjusted net profit (ex-exceptional
item) de-grew 12.5% to Rs 135.5 crore (I-direct estimate of Rs 258 crore) mainly due to a weak operational performance.
We cut our EPS estimates by ~20% in both FY20 and FY21 due to these factors. We arrive at our target price of ~Rs 710 based on 10x FY21E EPS of Rs 70.8.
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