Buy Jubilant Life Sciences; target of Rs 975: Motilal Oswal

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Motilal Oswal 's research report on Jubilant Life Sciences

Jubilant Life Sciences (JLS)’s 1QFY21 performance was adversely impacted due to COVID-19-led slowdown in demand for its Radiopharma and Life Science Chemicals (LSC) segment. The temporary 2M shutdown of its Nanjangud plant (used for the CDMO business) worsened the situation. We reduce our earnings estimate by 14%/2% for FY21/FY22 to factor the COVID-19-led impact on the business. We remain positive on JLS on the back of: 1) strong demand recovery in Specialty Pharma, CDMO, and Specialty Intermediates, 2) new product additions, and 3) improved operating leverage. We value JLS on an SOTP basis to arrive at target price of INR975. Reiterate Buy.

Outlook

We value JLS at 9x EV/EBITDA for the Pharma business and 4x EV/EBITDA for the LSI business, arriving at target price of INR975 on an SOTP basis. While the uptick in earnings growth is gradual (partly dented by COVID-19 in FY21), we remain positive on JLS on an attractive valuation of 7x FY22 EV/EBITDA. Maintain Buy.

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.

Read More