Jubilant Life Sciences posts Rs 260.49 cr profit for Jan-Mar
Inspite of challenges, pharma biz segment growth likely to be healthy: ICICI Securities
Drug firm Jubilant Life Sciences reported a consolidated net profit of Rs 260.49 crore for the quarter ended on March 31, 2020, driven by robust sales in the pharmaceuticals segment.
The company had posted a net loss of Rs 100.65 crore for the corresponding period of the previous fiscal, Jubilant Life Sciences said in a filing to BSE.
Consolidated revenue from operations stood at Rs 2,391.41 crore for the quarter under consideration as against Rs 2,385.58 crore for the same period year ago, it added.
Net profit of the company for the fiscal year ending March was at Rs 898.24 crore against Rs 577.01 crore for the previous fiscal year, Jubilant Life Sciences said.
The company’s revenue from operations stood at Rs 9,154.41 crore for the fiscal year ended March 2020. It was Rs 9,110.82 crore for the previous fiscal, it added.
Despite challenges in some revenue streams (especially in life science ingredients (LSI) segment) an ICICI Securities analysis feels that the expect pharma segment to maintain growth momentum thanks to consistency and visibility in all the three segments-speciality, CDMO and generics.
On the LSI front, the performance continues to be lumpy except nutritional sub-segment. As both these businesses have different fortunes and return profiles, ICICI Securities continues to value the company on SoTP basis till formal separation.
The analysts also note that the FY20 narrative for Jubilant Life Sciences was a significant net debt reduction, moderating Capex and margin expansion.
Analysing why the growth of the pharma business segment is likely to be healthy, the report points out that recent long term contracts in the radiopharma business, as well as Rubyfill traction in the US coupled with Europe launch later this year, are expected to strengthen the speciality sub-segment growth, which is likely to grow at 14.7 per cent CAGR in FY20-22E to Rs 3969 crore on the back of strong growth in the radiopharma business and consolidation of the pharmacy business.
The CDMO business was impacted in Q4FY20 due to COVID related challenges delaying API dispatches. However, going ahead, ICICI Securities expects this segment to witness strong traction on the back of improving operating leverage. Generic business is also registering decent growth on the back of base business besides one-off opportunities. Thus the expectation is that the pharma business to grow at 13.1 per cent CAGR in FY20-22E to Rs 7302 crore.
“We are glad to report record profits in FY20 with improvement in margins across all the business segments. The Q4FY20 performance was impressive with EBITDA growth of 58 per cent YoY,” Jubilant Life Sciences Chairman Shyam S Bhartia said in a release to the BSE.
Despite the COVID-19 led challenges, the company continues to experience strong demand across most of its businesses, Company Co-Chairman & MD Hari S Bhartia said.
During the year, the company reduced its net debt by Rs 514 crore and is focused on further deleveraging by generating healthy levels of cash flows, Jubilant Life Sciences said.
The company signed a Licensing Agreement with Gilead Sciences to register, manufacture and sell Gilead”s investigational drug, remdesivir, a potential therapy for coronavirus in 127 countries including India, and is working towards launching the drug in July 2020, it added.
In the fourth quarter of FY2020, the company announced and paid an interim dividend of Rs 5 per share of Re 1 paid up for FY20, which is the final dividend for the year as well, the filing said.