Jubilant Pharmova Ltd. share price target

Jubilant Life Sciences (JLS) revenue increased 38% YoY (Triad business not included in year-ago period numbers). Adjusting for the same, revenue was up 17% YoY, supported by 20% YoY growth in Life Science Ingredient (LSI; 39% of net sales) and 17% YoY growth in 22 October 2018 Pharmaceutical (44% of net sales, Ex-Triad) segment. For 1HFY19, sales/EBITDA/PAT were up 34%/37%/49% YoY to INR43.4b/8.8b/4.1b. Given the high base of past year, we expect sales/EBITDA/PAT growth to moderate to 5%/15%/20% YoY in 2HFY19. 19.8% came in below estimate of 21.6% in 2QFY19. Excluding Triad business, (a) up 1,800bp YoY in API/Generics (32% of Pharma sales), led by product rationalization, (b) up 600bp YoY to 40% in Specialty Pharma (58% of Pharma business) ex. Triad and (c) down 540bp YoY in LSI. JLSs net debt rose to INR34.3b, as against INR32b in 1QFY19.

Revenue decreased by 7.98% to Rs. 2046.29 Cr in Q1FY19 when compared to the previous quarter. Jubilant Life Sciences Ltd Q1FY19 results Comment

ICICI Securities Ltd | Retail Equity Research Revenues grew 34% YoY to | 2079 crore (I-direct estimate: | 2240 crore) mainly due to consolidation of Triad Pharmacy business. The pharma business grew 44% YoY to | 1181 crore (I-direct estimate: | 1268 crore). Excluding Triad, the pharma business grew ~9% YoY EBITDA margins contracted 46 bps YoY to 21.1% (I-direct estimate: 20.3%) mainly due to consolidation of pharmacy business. EBITDA grew 29.6% YoY to | 437.6 crore (I-direct estimates: | 453.7 crore)...

Maintain BUY rating with a target price of Rs 990 (FY20E EV/EBITDA 11x for pharma + 4.5x for LSI). Jubilant Life (JUBL) reported revenue at Rs 20.7bn in 1QFY19, up 33.6%YoY but down 7.7%QoQ (in line). YoY performance stands out due to the integration of Triad post acquisition and adjusting for this, growth is at 11%YoY. EBITDA at Rs 4.4bn grew 29.6%YoY with EBITDA margin at 21.1% (140bps above our estimate).

28 July 2018 JLS revenue grew 30% YoY to INR20.8b (est. Adjusting for the Triad business (which was added in 2QFY18, and thus, had no contribution in base quarter 1QFY18), revenue growth stands at 10% YoY, led by 15% YoY growth in Life Science Ingredient segment (LSI; 41% of sales). Ex-Triad Pharma segment (40% of sales) revenue rose 5% YoY. Pharma (47% of Pharma business) EBITDA margin expanded strongly by 300bp YoY to 49%. API/Generics segment (31% of Pharma sales) exhibited 630bp EBITDA margin improvement. However, LSI EBITDA margin shrank 200bp YoY. Overall EBITDA margin, thus, came in at 21.1% (est. Assuming Triad has nominal EBITDA margin, JLS ex-Triad EBITDA margin stands at 25% (+400bp YoY). Improved EBITDA margin led to 36% YoY growth in PAT to INR2b in the quarter.

Revenue rose by 8.93% to Rs. 2223.77 Cr in Q4FY18 when compared to the previous quarter. Jubilant Life Sciences Ltd Q4FY18 results Comment

Re-iterate BUY with a revised TP of Rs 1,060 (SOTP FY20E EV/EBITDA 11x for pharma + 4.5x for LSI). Unlike in 3QFY18, when only LSI segment led the top line growth, 4QFY18 performance of 41%YoY growth was fueled by both the key segments (Pharma: 53%YoY, LSI: 24%YoY). Adjusted for Triad, the top-line grew ~21%YoY. EBITDA came in at ~Rs 4.6bn, 15% ahead of expectations. The margins improved 125bps YoY to 20.3%. Favorable pricing in LSI and better traction in key specialty pharma segments were the primary reasons for improved profitability. PAT was at ~Rs 1.5bn, flat YoY, affected by one time R&D; asset write off of Rs 910mn. Adjusted for this, PAT was up 62%YoY at Rs 2.4bn.

Revenues grew 37% YoY to | 2252 crore (I-direct estimate: | 2126 crore) mainly due to consolidation of the Triad pharmacy business. Excluding Triad, revenues grew 17% YoY EBITDA margins improved 175 bps YoY to 20.3% (I-direct estimate: 21.2%) mainly due to higher margins in speciality injectable business, which was partly offset by losses in the Triad business Net profit increased a mere 3% to | 155 crore (I-direct estimate: | 250 crore). The growth was impacted due to | 91 crore one-off...

Revenue rose 37% YoY to INR22.5b (our estimate: INR21.3b) in 4QFY18, led by healthy growth in Life Science Ingredients (LSI) and addition of Triad sales. Improved profitability in both Pharma (Ex-Triad) and LSI led to 170bp expansion in the EBITDA margin to20.3% (our estimate: 21%). However, one-time charge due to product development expenditure and higher tax outgo led PAT growth of 3.9% YoY to INR1.5b. Adjusting for the same, PAT stood at INR2.2b (our estimate:INR2.2b).

Company has generated strong operating cash flow, which enabled reduction of debt and is expected to deliver better results going forward. Company's focus is to strengthen the balance sheet, invest in strategic opportunities without increasing debt levels and build strong pipeline or products across its businesses.

Strong fundamentals, superior growth in specialty pharmaceuticals and LSI, reduction in debt coupled with renewed focus on the allergy business & strong order book in CMO, helps company to outperform industry growth, expand its market share and provides sufficient business visibility, going forward.