Can Jubilant Pharmova leverage their position?

“In FY24, Company’s profitability is expected to improve, driven by growth in Radiopharmaceuticals, Allergy Immunotherapy and CDMO Sterile Injectables businesses. Recovery in Generics, API businesses and Radiopharmacies will also contribute to better profitability. The Company has several growth levers across its various businesses of Radiopharma, Allergy Immunotherapy, CDMO Sterile Injectables, Generics and CRDMO, which shall drive sustainable growth for the company in the medium term. In our Proprietary Novel Drugs business we have several high potential programs, which are at the preclinical / clinical  stage.”

– Mr. Shyam S. Bhartia, Chairman

Stock Data
Ticker	JUBLPHARMA
Exchange	NSE
Industry	PHARMACEUTICAL

Price Performance
Last 5 Days	+5.72%
YTD	-19.6%
Last 12 Months	-36.84%

*As of 05.04.2023

Company Description:

Jubilant Pharmova Limited operates in the pharmaceutical and life science industries. The company has a diversified product portfolio that includes pharmaceuticals, contract manufacturing services, proprietary products, and drug discovery and development services. The company’s pharmaceutical business is primarily focused on the development, manufacture, and marketing of APIs (Active Pharmaceutical Ingredients) and finished dosage forms. The company’s contract manufacturing services business provides services for manufacturing and development of APIs and intermediates for both domestic and international markets. The company’s proprietary products business develops and markets branded formulations in the Indian market. The company’s drug discovery and development services business offers services for drug discovery and development to pharmaceutical and biotech companies worldwide. The company has seen consistent revenues even in times of turmoil.

Key Business Segments:

• Radiopharmaceuticals: Jubilant is very well positioned in a highly niche segment, manufacturing and distributing diagnostic imaging and therapeutic radiopharmaceutical products. In this segment, the firm has a strong grasp on the majority market share. The radio pharmacy business is about scale and the margins are much thinner than in the manufacturing of radiopharmaceuticals.
  
  The company is executing a detailed turnaround plan to grow top-line strongly with new customer wins, expand network to service newer geographies, increase product basket and enhance cost and procurement efficiencies. The Company is well positioned in the North American nuclear medicine market, which is expected to grow across the therapeutic segments of oncology, neurology and cardiology over the next five years. The Company aspires to be the leading manufacturer of nuclear medicine products in North America.

• Generics: The company primarily focuses on the manufacture and sale of solid dosage formulations for CVS, CNS, GI and anti-allergy therapeutic categories. Within the United States, Jubilant is market leaders based on market share for several key products. Currently, margins have gone down a fair bit since then, with increased competition in the generic market. Moreover, the consolidation on the customer side has led to more bargaining power for the customers and put pricing pressure on the manufacturers.

• Contract Manufacturing of Sterile and Non Sterile Products (CMO): Jubilant has an established position in this market and sees this business growing, due to the increased consolidation, with large pharma companies buying CMOs, and reducing their ability to service other customers, hence leading to a demand-supply disequilibrium in the market.  Jubilant has long term relationships with their top customers, with 6 of their top 10 customers having been customers for 10 years or more.

Key Opportunities:

• Expansion of Contract Manufacturing Services: The global pharmaceutical outsourcing market is expected to grow at a CAGR of 6.7% between 2021 and 2028. Jubilant Pharmova Limited’s contract manufacturing services business is well-positioned to take advantage of this growth opportunity, given its established manufacturing capabilities and experience in the industry.

• Increasing demand for generic drugs: The demand for generic drugs is increasing globally, driven by rising healthcare costs and aging populations. Jubilant Pharmova Limited’s strong presence in the generic drugs market in India and other countries positions it well to benefit from this trend.

• Growth in emerging markets: Emerging markets, such as China and India, are expected to become major players in the pharmaceutical and life science industries in the coming years. Jubilant Pharmova Limited’s existing presence in these markets gives it a significant advantage in capturing this growth opportunity.

• Increased focus on research and development: The company’s strong focus on research and development provides an opportunity to develop new products, improve existing products, and expand its product portfolio. The company’s drug discovery and development services business is well-positioned to benefit from the growing demand for these services.

• Strategic acquisitions: The company has a history of making strategic acquisitions to expand its product portfolio and market reach. Further strategic acquisitions could provide opportunities for growth and expansion in new markets or product areas.

Jubilant Pharmova Limited is a well-diversified company operating in the pharmaceutical and life science industries. The company has a strong financial performance, a diversified product portfolio, and a focus on research and development. The company’s contract manufacturing services business is expected to be a key growth driver, and the company’s strong financial position and operational efficiencies are expected to drive further growth in the future. Overall, Jubilant Pharmova Limited is a well-managed company with a strong growth outlook