Jubilant Life Sciences - Q2FY21 Result Update - ICICI Direct

Q2 results were almost in-line with I-direct estimates. Revenues grew 4.8% YoY to Rs. 2375 crore. Pharma business grew 4.4% YoY to Rs. 1516 crore led by growth in CMO and generics. Life science ingredients (LSI) revenues also grew 4.4% YoY to Rs. 786 crore on good demand and improved pricing of select products. EBITDA margins stayed flattish (down 20 bps YoY) at 20.5% with lower other expenses being offset by lower gross margins. EBITDA grew 3.8% YoY to Rs. 486 crore. PAT de-grew 10.2% to Rs. 224 crore. Delta vis-a-vis EBITDA was due to lower other income and higher tax rate.

Valuation & Outlook

Despite Covid-related challenges in H1, the management expects no material impact on FY21 performance due to strong demand recovery and new business sign-ups. Rest of the 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 five contract manufacturing agreements that the company has signed for Covid treatment and vaccine candidates. On 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. 850.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_JubilantLife_Q2FY21.pdf

Shares of JUBILANT LIFE SCIENCES LIMITED was last trading in BSE at Rs.703 as compared to the previous close of Rs. 706.7. The total number of shares traded during the day was 35051 in over 2255 trades.

The stock hit an intraday high of Rs. 713.25 and intraday low of 681.6. The net turnover during the day was Rs. 24545585.

Source : Equity Bulls

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