ICICI Securities research report on Jubilant Life Sciences
Jubilant Life Sciences (JLS) has reported Q1FY21 performance below estimates due to revenue impact on account of COVID-19. Pharma segment revenue declined 17.5% while LSI business witnessed 8.5% decline. Consolidated revenue remained dropped 13.2% YoY Rs18.9bn (I-Sec: Rs23.1bn) and adjusted PAT declined 52.4% YoY on lower revenue and margins. EBITDA margin contracted 390bps to 16.0% (I-Sec: 21.0%). Company has launched Remdesivir, a potential treatment for COVID-19, in India and other several countries as part of licensing agreement with Gilead Life Sciences. JLS reduced net debt by Rs3.4bn.
Outlook
NCLT approval for demerger of pharma and LSI businesses is awaited. Considering recent rally in stock price, we downgrade it to HOLD from Add.
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