"JB Chemicals is the nation's fastest growing pharmaceutical company with domain in cardiac and gastrointestinal therapies. Lifecycle management of key brands, synergistic acquisitions and targeted new launches should enable JB to outpace industry growth." jefferies saying.
The brokerage has given a target of Rs 2,680, based on 20x EV-EBITDA on June 25. The valuation assigned is with a premium of 15% compared to its peer torrent pharmamainly due to superior EBITDA growth and ROIC profile.
JB Pharma is one of the fastest growing pharmaceutical companies in India and a leading player in the hypertension segment. In addition to its strong presence in India, which accounts for most of its revenue, its other two home markets are Russia and South Africa.
The company's business in India is focused on a four-pronged strategy in cardiac (44%), gastroenterological (30%), antibiotic (10%) and gynecological (5%) therapies.
In India, the company has six brands among the top 300 IPM brands in the country. The company exports its finished formulations to more than 40 countries, including the US.
Export growth will be led by lozenge contract manufacturing, where it has strong customer relationships and technology," said Jefferies.
Over the next three years, the brokerage estimates that JB Pharma will experience 12/17%/20% growth in revenue/EBITDA/PAT CAGR, with its ROIC expected to expand by 700bp to 30%.
Meanwhile, JB Pharma India's revenue is estimated to grow at a CAGR of 13% to Rs 2370 crore during FY23-26E, which is 3% above industry growth.
"JB should emerge among the fastest growing midsize companies because of its focus on India and CMO," he said.
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