Moneycontrol Be a Pro
Get App
Last Updated : May 23, 2019 11:12 PM IST | Source: Moneycontrol.com

Buy Jubilant Life Sciences; target of Rs 750: Dolat Capital

Dolat Capital is bullish on Jubilant Life Sciences has recommended Buy rating on the stock with a target price of Rs 750 in its research report dated May 21, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Dolat Capital's research report on Jubilant Life Sciences


Jubilant Life Sciences’ (JUBL) Q4FY19 revenue grew marginally by 6% YoY as the growth in the pharma (59% of Q4FY19 revenue) and DDS (3%) segments was muted by a decline in the LSI (38%) segment. RubyFill continues to gain market share, but the company is currently incurring costs to develop the market for future revenue and higher margins. Triad to breakeven in FY21. LSI was impacted by a sharp drop in acetic acid prices (from USD 600 during 9MFY19 to USD 450 in Q4FY19), high inventory cost, and pricing pressure for molasses. JUBL guided that there will be product launches and capacity additions, which would be commercialised in Q1FY20, with a potential inflow of ` 3bn annually. We expect the pharma business to be stable as RubyFill is gaining market share. However, considering Roorkee WL, pressure on LSI, and a higher tax rate, we have a negative view for FY20 than our earlier assumption.


Outlook


We expect the improving situation for Vitamin B3 and CMO’s additional capacities (starting a second line in H2FY20, commissioning Lyo in FY20) to provide aid to the company’s performance. Considering the recent correction in the market, we have a BUY rating, with a TP of ` 750 (10x FY21E EPS).


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.




The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on May 23, 2019 11:12 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant