Buy J B Chemicals & Pharmaceuticals, target price Rs 1896: ICICI Securities

ICICI Securities has buy call on J B Chemicals & Pharmaceuticals with a target price of Rs 1896. The current market price of J B Chemicals & Pharmaceuticals Ltd. is Rs 1649.1. Time period given by analyst is one year when J B Chemicals & Pharmaceuticals Ltd. price can reach defined target.

J B Chemicals & Pharmaceuticals Ltd., incorporated in the year 1976, is a Mid Cap company (having a market cap of Rs 12820.33 Crore) operating in Pharmaceuticals sector.

J B Chemicals & Pharmaceuticals Ltd. key Products/Revenue Segments include Pharmaceuticals, Export Incentives, Other Operating Revenue and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 626.67 Crore, up 3.55 % from last quarter Total Income of Rs 605.18 Crore and up 13.16 % from last year same quarter Total Income of Rs 553.80 Crore. Company reported net profit after tax of Rs 84.97 Crore in latest quarter.

Investment Rationale
JB Chemicals & Pharmaceuticals’ (JBCPL) Q4FY22 performance was ahead of estimates with continuous market-beating performance in India and recovery in export growth. Consolidated revenue grew 18.2% YoY to Rs6.2bn (I-Sec: 5.7bn). Q4FY22 also benefited by 50% price increase in Ranitidine. EBITDA margin stood at 20.0% vs estimates of 19.3%. However, excluding ESOPs (Rs240mn) and acquisition-related cost (Rs150mn), EBITDA margin stood at ~26%. Post the consolidation of Sanzyme portfolio, domestic contribution increased to ~54%. It remains positive on the management’s strategy towards improving productivity in India business, portfolio expansion and cost optimisation. Maintain BUY with a revised target price of Rs1,896/share (earlier: Rs1,963/share).

Promoter/FII Holdings
Promoters held 54.0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.22 per cent, DIIs 16.89 per cent.