Buy J.B. Chemicals and Pharmaceuticals; target of Rs 2350: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Our FY24/FY25 earnings estimates stands marginally reduced by 5%/2%, as we factor in lower margins. In Q3FY23 J.B. Chemicals & Pharmaceuticals (JBCP) EBITDA growth of 36% YoY was largely in-line with our estimates, aided by strong revenue growth across domestic formulation (+46% YoY) and contract manufacturing business (+91% YoY). We believe JCBP 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. Over FY23-25E we expect EPS CAGR of 29%.

At CMP, the stock is trading at 21x FY25E P/E adjusted for ESOP and amortization charges. We maintain our ‘BUY’ rating on stock with TP of Rs2,350/share, valuing at 25x Dec 2024E EPS adjusted for ESOP and amortization charges.

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