Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are intact for JB Pharma. The sharp recovery in the company’s CDMO business, driven by supplies to 2 customers in the EU, “should help sustain the growth momentum in FY26.”
Jefferies bets on JB Pharma’s strong CDMO business recovery
One of the highlights of JB Pharma’s Q3 earnings is that the CDMO sales grew 33% YoY to Rs Rs 120 crore and this business is expected to pick up further pace in Q4FY25, as per the company. After a challenging H1FY25, CDMO sales recovered sharply on the back of a strong order book. The company recently started supplies to 2 new partners in the EU. One of these is in Krka. “It expects to achieve mid-teens growth in CDMO in FY26 on the back of new projects in non-EU markets and new therapy dosage form additions,” added Jefferies in its report.
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The JB Pharma management expects India sales to achieve “mid-teens levels of growth next fiscal.” According to Jefferies, “growth focus will be led by volumes with some contribution from pricing and emphasis will be on launching new products.” JB is unlikely to target the GLP-1 drugs a it does not have an established diabetes franchisee.” GLP-1 drugs or Glucagon-like peptide-1 drugs are used to treat type 2 diabetes and obesity. These are also used for weight loss.
While the South Africa business and branded generics exports markets also recorded growth, the revenue for US and Russia business declined YoY. EBITDA margin stood at 26.4%.
Jefferies on JB Pharma: May hit upper end of FY25 EBITDA guidance
The Management reiterated JB Pharma’s FY25 EBITDA margin guidance of 26-28%, and Jefferies expects the company “to hit the upper end of the guidance by the end of FY25.”JB Pharma has additionally stated that it will repay all its debt.
Strong execution capabilities and ability to undertake M&A are seen as key positives for the share price of JB Pharma.
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