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  • 03 Aug 2022
  • ICICIdirect Research

JUBILANT PHARMOVA REPORTS WEAK REVENUES, MARGINS IN Q1

JUBLPHARMA - 1239 Change: -15.55 (-1.24 %)

News: Jubilant Pharmova’s revenues were at Rs 1452 crore, down 11% YoY. Generics declined 59% YoY to Rs 178 crore due to 1) lower volumes due to import alert at Roorkee plant, 2) pricing pressure in the US market and 3) lower Remdesivir sales. CDMO segment declined 29% YoY to Rs 263 crore on high base of Covid sales in Q1FY22. CRDMO (API + Drug Discovery) grew 45% YoY to Rs 280 crore as Drug Discovery Services revenue increased amid higher demand from Biotech companies for integrated services, functional chemistry and DMPK while APIs revenue grew YoY due to higher volumes. Specialty Pharma grew 14% YoY to Rs 722 crore driven by Radiopharmaceuticals which recovered from easing of COVID-19 pandemic and Radio pharmacies business witnessed growth due to higher volumes led by recovery from COVID-19 and new products. Allergy Immunotherapy continues to operate at volumes higher than pre-Covid levels. EBITDA margins declined 970 bps YoY to 13.3% mainly due to lower profitability in generics and radio-pharmacies segment. EBITDA de-grew 49% YoY to Rs 192 crore while adjusted PAT declined 71% to Rs 47 crore.

View: Jubilant Pharmova’s revenue growth in Specialty Pharmaceuticals and CRDMO was offset by CDMO Sterile Injectables and Generics. On generics front, USFDA audited the Roorkee facility (under import alert) and has issued six observations. Generics along with CMO (sterile injectable + APIs) remain challenging on growth front amid high Covid base and compliance issues at manufacturing facilities. In radio-pharmaceutical, ruby-fill installations are on track while management is working on turnaround plan for radio-pharmacies to reach EBITDA breakeven by FY24. Multiple issues are affecting several business segments and in absence of imminent key triggers, we expect the near to medium term overhang to remain on both revenues growth and profitability.

Impact: Negative.