J.B. Chemicals & Pharma Hits 52-Week High with Record Q1 Earnings: Time to Buy?

Shares of JB Chemicals & Pharmaceuticals saw a nearly 3% rise on August 9, as investors reacted positively to the company's robust performance in the April-June quarter. The drugmaker demonstrated strong growth across key financial metrics, including revenue, profit, and profitability.

Shares of JB Pharma reached a 52-week high of ₹1,999 apiece on the BSE during early trade on Friday, August 9.

For the first quarter of FY25, the company's revenue surpassed ₹1,000 crore for the first time, increasing by 12% year-over-year to ₹1,004 crore. This growth was largely driven by a 22% year-over-year rise in domestic formulations sales, which reached ₹595 crore, effectively offsetting the stagnant revenue from the international segment.

(PAT) for the first quarter of the financial year 2024-25, ending on June 30, with profits reaching ₹176.83 crore. The company's revenue from operations also saw a 12.07% Y-o-Y growth, amounting to ₹1,004.40 crore.

Sequentially, the company experienced a 16.55% rise in revenue, while PAT grew by 40.17%. The operating EBITDA (earnings before interest, tax, depreciation, and amortisation) margin increased by 20% Y-o-Y to ₹292 crore, driven by cost optimization and a favorable product mix.

Nikhil Chopra, CEO and whole-time director of JB Pharma, commented on the results, stating, “We have achieved a significant milestone by surpassing ₹1,000 crore in quarterly sales for the first time, with improvements across all key metrics — revenue, gross profit, operating profit, and operating profit margin. The domestic business has shown strong performance, with each major brand franchise experiencing growth that outpaces the market.”

The company attributed subdued international revenue to seasonal factors and strategic decisions made during the quarter.

Nikhil Chopra, CEO and Whole-time Director of JB Pharma, commented on the results, stating, "The domestic business continues to perform strongly, with our major brand franchises achieving market-beating growth. We anticipate that the international business, including our CDMO segment, will gain momentum in the second half of the fiscal year."

Despite the challenges in the international market, JB Pharma improved its operational performance, with EBITDA increasing by 20% to ₹292 crore, up from ₹243 crore in the same period last year. The EBITDA margin also expanded by 200 basis points year-over-year to 29% in Q1, aided by cost optimization efforts, a favorable product mix, and price growth.

This strong operational and revenue performance also boosted JB Pharma's net profit, which rose by 25% to ₹177 crore, compared to ₹142 crore in the corresponding quarter of the previous fiscal year.

Looking forward, the company expects its operating margins to remain in the range of 26-28%, supported by ongoing cost optimization initiatives. Additionally, JB Pharma aims to have its India and CDMO businesses contribute around 75-80% of total revenue in the mid-term.

The company remains optimistic about its India business, forecasting market-beating growth and focusing on increasing the share of chronic therapies to 60% in the medium to long term.

JB Chemicals & Pharmaceuticals is currently trading 0.09% higher at ₹1,949.00, compared to its previous closing price. The stock has been fluctuating within a price range of ₹1,998.00 to ₹1,927.85. So far this year, JB Chemicals & Pharmaceuticals has delivered a return of 19.88%, with a 1.83% increase over the past five days.

The company has a trailing twelve months (TTM) price-to-earnings (P/E) ratio of 46.34, which is higher than the sector average P/E of 28.03. 

Among analysts covering JB Chemicals & Pharmaceuticals, 10 have initiated coverage, with 5 assigning a strong buy rating and 2 giving it a buy rating. However, 1 analyst has issued a sell rating for the stock.

J.B. Chemicals & Pharmaceuticals Limited is an Indian pharmaceutical company specializing in gastroenterology, hypertension, and dermatology, while also focusing on other therapeutic areas such as nephrology, respiratory, virology, diabetes, and nicotine replacement therapy (NRT). 

The company is involved in the manufacturing and marketing of a wide range of pharmaceutical formulations, herbal remedies, and active pharmaceutical ingredients (APIs). Its notable brands include Nicardia, Cilacar, Rantac, Metrogyl, and Cilacar-T. It maintains a direct presence in Russia and South Africa, along with distributor relationships in the United States and various markets across Asia, Africa, and Latin America.