J B Chemicals & Pharma's Decent Performance Puts Stock in Focus

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  • Aug 13, 2021 - J B Chemicals & Pharma's Decent Performance Puts Stock in Focus

J B Chemicals & Pharma's Decent Performance Puts Stock in Focus

Aug 13, 2021

Drug firm J B Chemicals & Pharmaceuticals on Thursday reported a consolidated net profit of Rs 1.2 bn for the quarter ended June 2021.

The company had posted an equal amount of net profit for the same period of the previous fiscal.

Its consolidated revenue from operations of the company stood at Rs 6.1 bn for the quarter. It was Rs 5.2 bn for the same period a year ago.

The organisation continues to perform well with revenue momentum continuing to remain strong.

Highest ever quarterly revenue recorded during the first quarter, despite lockdowns in key markets and supply chain challenges.

The domestic formulations business recorded 39% growth. The international business revenue was largely flat compared to the quarter one of last year.

Key Financial Parameters

Particulars (Rs bn) Q1 FY22 Q1 FY21 YoY Growth
Revenue from Operations 6.1 5.2 16%
EBITDA 1.6 1.5 5%
EBITDA Margin 27% 29.8%  
Profit Before Tax (PBT) 1.6 1.6 0%
Net Profit 1.2 1.2 0%
Data Source: Investor Presentation

J B Chemicals & Pharmaceuticals CEO and Wholetime Director Nikhil Chopra said,

  • The organisation continues its strong performance well in the first quarter of the financial year.

    On the domestic front, we are one of the fastest growing companies in the industry.

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Product launches during the June quarter

During the quarter, the company launched a number of new products in the Renova division and five new products in the Nova division.

Some of the major product launches were viz. Aquazyl - Isomalt Lozenges addressing the challenge of dry mouth (xerostamia), NOSMOK - Nicotine lozenges 2mg and 4mg for reducing withdrawal symptoms associated with smoking cessation, and NINTABID - Ninetadanib 100/150 mg capsules - first line treatment for Idiopathic Pulmonary Fibrosis to slow down the progressive loss of lung function.

J B Chemicals seeks to expand market for prescription lozenges with new launches

Singapore's Tau Investment Holdings-controlled pharma major J B Chemicals plans to launch about half a dozen new lozenges products this year.

The company targets this largely untapped segment by pegging it as a therapeutic and immunity intervention.

For the distribution, it is strengthening its prescription model by working with clinics and healthcare professionals, rather than relying on the conventional over-the-counter (OTC) sales of these products.

Globally, lozenges as a therapeutic option is well accepted. But in India it is still in an early stage.

The practice of healthcare professionals prescribing lozenges has not picked up here as it has globally.

This may be because there are very few players in the space and the overall ecosystem is yet to be built. Currently, most lozenges are OTC products.

The prescription market for lozenges in India is estimated at around Rs 1.5 bn. The company expects its new therapeutic options to expand the market.

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International Business

Uncertainty surrounding second wave of Covid-19 in certain geographies impacted revenue growth in the international business.

The USA and South Africa business continues to show strong momentum with growth in excess of 20% respectively for the first quarter.

Despite muted cough and cold season Russia CIS (commonwealth of independent states) has seen gradual growth revival during the quarter.

Active pharmaceutical ingredient (API) business remained challenging for the first quarter of the financial year 2022.

However, the business is now showing a good trend and a healthy order book, the company said in a statement.

Equitymaster's view on the pharma sector

We reached out to Tanushree Banerjee, Co-Head of Research at Equitymaster, and editor of the premium stock recommendation service StockSelect, for her view on the pharma sector.

Here's what she has to say...

  • The second Covid wave has given a new lease of life to pharma stocks. As the sector continues to invest in capacities for new drugs, the profitability will depend on the companies' ability to seek USFDA approval for the plants.

    Or their ability to tie up with MNC pharma for producing variants of their vaccine.

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How the stock markets reacted to J B Chemicals & Pharmaceuticals

Shares of J B Chemicals & Pharmaceuticals opened the day at Rs 1,796.5 on the BSE and Rs 1,779 on the NSE.

Its share price closed at Rs 1,725 (down 3.2%) on the BSE and Rs 1,776.9 (down 0.3%) on the NSE.

At its current price, it is trading at a P/E of 31.1.

The share touched its 52-week high of Rs 1,938.8 and 52-week low of Rs 753 on 19 July 2021 and 1 September 2020, respectively.

Over the last 30 days, the J B Chemicals & Pharmaceuticals share price is down 1.6%. Over the last one year, the company's share price is up 134.7%.

About J B Chemicals & Pharmaceuticals

J B Chemicals & Pharmaceuticals (JBC) established in 1976, is one of the fastest growing pharmaceutical companies in India and a leading player in the hypertension segment.

The company is also engaged in the business of manufacturing and marketing of diverse range of pharmaceuticals formulations, herbal remedies, and APIs.

Besides its strong India presence, which accounts for majority of its revenue, the other two home markets are Russia and South Africa.

In India, the company has five brands among the top 300 brands in the country. The company exports its finished formulations to over 30 countries including the USA.

Besides supplying branded generic formulations to several countries, it's also a leader in the manufacturing of medicated lozenges. The company ranks among the top 5 manufacturers globally in medicated and herbal lozenges.

It has seven state of the art manufacturing facilities in India including a dedicated manufacturing facility for medicated lozenges. The manufacturing facilities are certified by leading regulators across the world.

For more details about the company, you can have a look at J B Chemicals & Pharmaceuticals' factsheet and quarterly results on our website.

You can also compare JBC with its peers.

J B Chemicals & Pharmaceuticals vs Sun Pharma

J B Chemicals & Pharmaceuticals vs Aurobindo Pharma

J B Chemicals & Pharmaceuticals vs Dr Reddys Lab

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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