Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Jubilant Pharmova - Big miss; recovery delayed - ICICI Securities

Posted On: 2021-06-07 17:07:17 (Time Zone: UTC)

Jubilant Pharmova's (Jubilant) Q4FY21 performance was below our estimates with miss of 12/25/21% in revenue/EBITDA/PAT. The Life Science Ingredients business got demerged into Jubilant Ingrevia Ltd from Feb'21. Pharma business revenue grew remained flat at Rs15.8bn, EBITDA margin dropped 420bps YoY to 23.7% and adj. PAT declined 13.7% to Rs1.8bn. The CDMO business benefited from the manufacturing of potential COVID-19 drug and vaccines which contributed Rs5.4bn revenue in FY21. However, this business would come down to Rs2bn in FY22E with no certainty of continuity. We believe near to medium term growth would remain under pressure due to slow recovery in radiopharma business and potential decline in CMO and generics business on high base. Downgrade to HOLD from Buy.

- Revenue recovery lags expectations: Specialty segment (radiopharma & allergy therapy) revenue continued its decline with revenue dropping 23.5% YoY due to lower patient footfalls for radiology tests. Lung imaging products DTPA and MAA volumes remained very low, while allergy therapy business has come back to pre-COVID levels. CDMO business (CMO and API) grew strong 47.9% on a low base and incremental revenue from COVID-19 related manufacturing which would taper-off going forward. Generics segment remained flat YoY on lack of new launches and lower sales of Remdesivir in Q4FY21. Ongoing USFDA issues would keep growth in generics and API segments under check.

- Lower revenue impacted the margins: Reported EBITDA margin at 23.7% was down 420bps YoY and 410bps QoQ due to lower revenue and costs remained unabsorbed. Though, gross margin improved YoY as well as QoQ. We believe EBITDA margin would remain at current levels in FY22E despite expected pick-up in radiopharma sales due to decline in COVID-19 related CMO business which would have been at higher margins in FY21, in our view. We expect EBITDA margin to improve to ~25% in FY23E with normalisation of radiopharma sales.

- Outlook: We estimate revenue, EBITDA and PAT CAGRs of 7.9%, 12.9% and 24.2% respectively over FY21-FY23E. Demand in specialty pharma remains below pre-COVID levels, while other businesses have reverted to normal levels. Higher earnings growth is due to low FY21 base and expectation of reduction in tax rate. Company guided for higher capex of ~Rs7-8bn in FY22E.

- Valuations and risks: We cut revenue and EPS estimates by 4-6% and 5-15% respectively for FY22E-FY23E to factor in delayed recovery in the radiopharma business with reduced profitability and potential decline in the CMO and generics business. We downgrade the stock to HOLD from Buy with a revised target price of Rs798/share based on 14xFY23E EPS (earlier Rs840). Key downside risks: regulatory hurdles and delay in the recovery of specialty business. Key upside risks: early resolution of USFDA issues and faster recovery in radiopharma business.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020