Jubilant Life Sciences - Q1FY21 Result Update - ICICI Securities

Q1 revenues fell 13.2% YoY to Rs. 1893 crore. Pharma business de-grew 17.5% YoY to Rs. 1096 crore due to lower Radiopharma, allergy business and temporary suspension of Nanjangud API plant operations due to Covid-19. Life science ingredients (LSI) revenues fell 8.3% YoY to Rs. 738 crore due to a decline in life science chemicals and specialty intermediates business. EBITDA margins contracted 395 bps YoY to 16.0% despite better gross margins due to higher employee costs. EBITDA de-grew 30.5% YoY to Rs. 302 crore. Net profit de-grew 52.4% to Rs. 88 crore. Delta vis-a-vis EBITDA was due to higher depreciation and interest expense.

Valuation & Outlook

Despite Covid-related challenges in Q1, the management expects no material impact on FY21 performance due to strong demand recovery and new business sign-ups. Rest of fiscal is expected to post strong growth across all segments and better margins amid cost rationalisation measures. Going ahead, we expect pharma segment to be back on the growth track thanks to consistency, visibility in all three segments- specialty, CDMO, generics. A key monitorable in the segment would be developments on the four contract manufacturing agreements that the company has signed for Covid treatment and vaccine candidates. On the LSI front, the performance continues to be lumpy except nutritional sub segment. As both these businesses have different fortunes, return profiles, we continue to value the company on SoTP basis till formal separation. Accordingly, we arrive at a target price of Rs. 1060. Despite the recent run up, the stock remains a compelling bet from a risk-reward perspective.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_JubilantLife_Q1FY21.pdf

Shares of JUBILANT LIFE SCIENCES LIMITED was last trading in BSE at Rs.778.3 as compared to the previous close of Rs. 829.6. The total number of shares traded during the day was 52420 in over 2628 trades.

The stock hit an intraday high of Rs. 808.5 and intraday low of 772.95. The net turnover during the day was Rs. 41195399.

Source : Equity Bulls

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