JB Chemicals & Pharmaceuticals Limited (NSE: JBCHEPHARM) Q1 2026 Earnings Call dated Jul. 31, 2025
Corporate Participants:
Unidentified Speaker
Jason D’souza — Executive Vice President
Nikhil Chopra — Chief Excuetive Officer
Narayan Saraf — Chief Financial Officer
Analysts:
Unidentified Participant
Rashmi — Analyst
Sumit Gupta — Analyst
Gaurav — Analyst
Akshay Shinde — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to JB Pharma’s Q1FY26 earnings conference call as on 31st July 2025. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Jason D’, Souza, executive vice President at JB Pharma. Thank you. And over to you sir.
Jason D’souza — Executive Vice President
Thank you. Rayo. Welcome to the earnings call of JB Pharma. We have with us today Nikhil Chopra, CEO and whole time Director Kunal Khanna, President Operations and Narayan Saraf, the CFO at JB Chemicals and Pharmaceuticals limited. Before we begin, I would like to state that some of the statements in today’s discussion may be forward looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q1 FY26 results presentation that has been sent to you earlier. I would like to hand it over to Mr. Nikhil Chopra to begin the proceedings of the call for his opening remarks.
Nikhil Chopra — Chief Excuetive Officer
Thank you Jason and welcome to all of you on today’s call. Let me begin by addressing the significant strategic development that was announced recently. On June 29, Torrent Pharma announced its intention to acquire controlling stake of KKR in JB Pharma. To be followed by a merger of JB Pharma with itself. The transaction creates a diversified healthcare platform with deep capabilities in chronic and international CDMO segment. I will briefly share the highlights of the transaction which all of you. Torrent shall first acquire a 46.39% stake for a cash consideration of INR 11,917 crores as per specified SPA.
This will trigger the mandatory tender offer where the price has been fixed at INR of 1639.18 per share. This will be followed by merger of two companies with torrent being the surviving listed entity. Once the scheme is effective, the transaction remains subject to CCI and other regulatory approvals which have to come in place. Meanwhile, coming back to JB’s performance for the quarter, business is as usual at JB and I’m glad to share that JB’s operating momentum continues to impress. The business is amongst the fastest growing in India within the Indian Pharma market. During quarter one, overall revenues increased by 9% to INR10.94 crore with operating EBITDA excluding non cash ESOP and one off charges grew by 13% to INR330 crores.
Our net profit showed a 14% increase of INR202 crore. Given enhanced margins and cost alignment, the gross margins during quarter one came in at 68.3% growing 210bps year on year. This followed consistent cost optimization initiatives, a favorable business mix and pricing growth. Operating EBITDA margin stood at 30.2% higher by 120bps year on year and once again re emphasizing our focus on profitable growth. Just to also share with you 30.2% our EBITDA margins are the best up till now what we have been reported I shall now turn attention to our domestic business. The domestic business delivered 14% growth year on year to INR 678 crore during quarter one FY26 as per IQVM we showed 13% growth of quarter one FY26 relative to 9% increase shown by the industry within domestic business as per IQV our chronic portfolio continued its growth trend achieving 15% growth year on year.
Quarter one also showed acute business increasing by 12% year on year. Ophthalmology portfolio has also delivered a growth of 19% improvement over year on year as per ITVR data, our leading brands and their franchises continue to perform well and continue to outperform the market growth. Our acquired portfolio is going from strength to strength. As per Met June 2025 Sporolac as a franchisee has grown to 146 crores as compared to 70 crores in June 22. As a comparison when we had just acquired the portfolio, Sporoleg also recently entered the top 300 brands list in the country.
Asmada is now a 75 crore brand and present in one of the fastest growing segment in cardiology that is Heart failure. The result franchisee has performed well in a short period and for the first time has crossed 100 crore as a franchisee as per IQM at 6-02-2025. This is a significant development considering the franchisee was INR 69 crore as per June 2023 IQVR. So across whether we talk of Sporoleg, we talk of ophthalmology, we talk of razor, we talk of Osmada. All our franchisees continue to deliver very good performance. I shall now turn attention to our international operations.
During quarter one we saw 2% growth of INR416 crores led by our CDMO business in the international operations the CDOMO business showed 8% improvement year on year to 115 crore given sustained momentum, the business has an attractive development pipeline of products of global significance with its key partners. International formulation saw revenue of 283 crore from 290 crore previously while branded export business recorded a growth of recorded growth for a quarter one FY26 and the other businesses that is Russia, US and South Africa remained flat or marginally declined for the quarter. For the CDMO business, the first commercial quantities of new products such as iodine liquid throat spray, variants of immunity lozenges in Asia, PAC and EU markets have already been dispatched which we have been talking earlier in our in our commentary in the Investor Call.
This is what we wanted to share a detail that this is a progress that we have made in the world of CDMO business. With new products now being dispatched in some of the asia pack and EU markets, we are expecting three to four important new launches in next 12 to 18 months. JBE continues to remain focused on driving top end momentum, cost optimization and organization efficiencies. The sustained emphasis on the domestic and CDMO business will continue supporting both growth and profitability. Backed up by strong financial foundation and deeply execution oriented culture. We are well equipped to steer confidently into the next phase of our evolution.
I would like to now hand over to our CFO Mr. Narayan Shara for his views. Over to you Narayan.
Narayan Saraf — Chief Financial Officer
Thank you, thank you Nikhil. Welcome everyone to our Q1 FY26 earnings call. I will now take you through the financial highlights. Revenues for the quarter stood at Rs.10.94crores reflecting a 9% year on year growth. The domestic to international business mix was 62% and 38% respectively. The domestic business delivered revenues of rupees 678 crore growing 14% year on year aided by traction in chronic ophthalmology and acute portfolios. International business grew 2% year on year at Rs. 416 crores. CDMO segment grew 8% year on year to Rs. 115 crore and we expect the momentum to continue. The international formulations business declined by 2% year on year to Rs.283 crores.
Other businesses of Russia, US, South Africa were impacted while exports branded generics. The API vertical grew 38% year on year with revenues at Rs. 18 crore. Gross margins for the quarter came in at 68.3% versus 66.2% in Q1FY25. This expansion of 210 basis points was aided by price growth, cost optimization efforts and favorable business mix operating EBITDA excluding esop costs and one off impact due to proposed merger scheme was at Rs. 330 crores marking a 13% year on year increase. Operating margin excluding esop cost and one off improved to 30.2% versus 29% in Q1FY25, thereby reflecting 120 basis points improvement.
Packed margin excluding one off impact is at Rs. 214 crores improved to 19.6% versus 17.6% in Q1FY25 marking a 21% year on year increase. On the cost front, employee benefit expenses increased 16% year on year to 194 crores. ESOP cost was at 14 crores versus 12 crores last year. Same quarter, other expenses increased by 16% to rupees 252 crores due to one off charges of rupees 15 crores on account of the proposed merger scheme. Depreciation increased 5% year on year to Rs. 43 crore versus 41 crore in Q1FY25. We remain sharply focused on advancing top line growth, driving disciplined cost management and enhancing operational efficiency across our diverse portfolio.
Our domestic and CDMO businesses continue to serve as key growth and profitability engines, reinforcing the strength of our multi segment strategy. With the core enablers of sustainable growth now firmly established, we are well positioned to capitalize our future opportunities. I am confident in our organization’s ability to deliver consistent value creation for our shareholders and stakeholders in the years to come. With that, I conclude my opening remarks. I now request the moderator to open the forum for the Q and A session. Thank you very much.
Questions and Answers:
operator
Sure. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. Ladies and gentlemen, to ask a question at this time, please press Star and one on your touchstone telephone.
Jason D’souza
We have a question that just come on the wall. It’s on the international business. What is the overall outlook of the international business for the year and how do we see all the three the international formulation, the CDMO and the API business playing out?
Nikhil Chopra
So CDMO as we have been guiding earlier should grow between 12 to 14%. Quarter one, the business grew at 8%. We have good visibility of order book per CDMO for quarter two. In terms of the growth Perspective, our average run rate this year will be around 120 crores. That is what we had guided earlier. And next year this figure would be ranging between 140 to 150 crores. So CDMO continues to be on a good wicket. Our branded generic business declined for the quarter. But if you look at the overall trend of the business, second half of the business ramps up.
So there also we have good visibility of order book for quarter two. So by end of quarter three you should see that business growing at high single digit. That is what visibility we have got for our international rest of the world branded generic business.
Jason D’souza
On the domestic business, the follow up question which is there is that we’ve seen a very strong 14% growth. Do we see this growth rate continuing for the remaining part of the year?
Narayan Saraf
Yeah, if we look at the recent trends and the last quarter also our growth has been fueled by major brands and the key franchisees of those brands. Our volume growth has been 350bps higher than the market. While the market volume growth as per Matt June was close to one and a half percent, we have registered 4% plus. So we will continue to see these growth trends with all our key brands fueling the growth. And we should be in the range of 12 to 14% with 300 to 350bps higher than the market.
Jason D’souza
We can take the questions back in the queue.
operator
Sure. Before we take the next question, a reminder to participants that you may press Star and one to join the question queue. The next question is from Rashmi from Dolat Capital. Please go ahead.
Rashmi
Yeah, thanks for the opportunity. And you know, just one question again on the export business. You all have mentioned that you know, the export branded business have clearly declined, you know, mainly in the Russia, South Africa and the US market. If you can explain that in each market what has exactly happened and why this quarter is, you know, subdued.
Narayan Saraf
So specifically markets Russia, the season was slightly slow and anyway most of the, you know, if you look at the trends, the actual demand pickup usually happens from H2 onwards, September onwards, we will see a good demand pick up South Africa. You know, there have been some private and large institutional accounts where you know, there has been slightly muted growth. But with some of the grants and sanctions kicking in, we see a good positive Trend coming in H2 for us. Us while it was slightly slow to start with, we have good order visibility as we see our business for the next four to six months.
There was some slight pricing pressure for two of our key molecules. But all of that will be neutralized as we see, you know, into the remaining part of the year. So these were the key reasons. But we do see all these markets picking up in the next two quarters which will help us drive high single digit growth going forward.
Rashmi
And us, would you mind just giving a quarterly run rate? You know, what is the run rate generally? We have, you know, for U.S. sales.
Narayan Saraf
We generally don’t get into those kind of segment wise disclosures.
Rashmi
Okay. And another question is on Asmada now the sales are back at around, you know, 75 crores. So you know, how is the profitability over there with the intense competition and all, you know, are we, are we able to improve the profitability as well? So if you can comment more on that particular product, surely as the sales.
Narayan Saraf
Increase we do see better operating leverage kicking in which helps the profitability of the brand. As we had mentioned that our first target almost six months back was to steadily hit 120 to 125,000 units, you know, per month. And we have reached that scale. The market reflection is also showing growth and closer to double digit growth. We will continue to be on that path for the next three to four months. Our target is to reach 140,000 units going forward.
Rashmi
Okay, and one last question. On the integration expenses we have seen, just a clarification. We have seen 15 crores integration expenses in the torrents result also which is included in other expenses and the same thing. So the total integration expenses spent was around 30 crores, am I correct?
Narayan Saraf
Yes, 15 crores is the cost which.
Jason D’souza
We are, we can comment only on.
Narayan Saraf
Our expenses which is 15 crores.
Rashmi
Okay. Okay, thank you. That’s it from my side.
Jason D’souza
Just before we take the next question, we have one more question that’s on the wall. The Acute portfolio has rebounded pretty strongly in Q1. Would we see this momentum continue to sustain in the next few quarters?
Nikhil Chopra
So within Acute portfolio, if you look at what I shared earlier, Sporolac as a brand has performed very well. It has been growing at a pace of high teen growth. Rentec and metrogyl as a franchisee, if you look at IQ figures also has been flat for the quarter. So entire growth was driven by the work that the teams have done in the world of Probiotic and the newer versions of Probiotic and equally some of the versions of our eye drops majorly in the world of acute portfolio I.e. moxifloxacinin combinations and anti allergics and pain eye drops, they also performed well.
So our ophthalmology and sporoleg business have shown high teens growth And Rentec and Metrogyl have been flat for the quarter.
Narayan Saraf
Great.
Jason D’souza
Just another question and we’ll go back to the queue. GCs have come up pretty high at 68%. How do we see GCS playing out in the remaining part of the year?
Narayan Saraf
So we hold our guidance where we are looking at the GCS in the range of 67% for the full year and we will continue to hold that guidance of 67% for the year.
Jason D’souza
Thanks. We can go back to the queue, operator?
Nikhil Chopra
Sure.
operator
Thank you. Participants who wish to ask questions, please press star and one to join the question queue. The next question is from Sumit Gupta from Centrum. Please go ahead.
Sumit Gupta
Am I audible?
Nikhil Chopra
Yes, yes, yes.
Sumit Gupta
Yeah.
Nikhil Chopra
Now you’re not audible.
Narayan Saraf
Now you’re not audible. We can’t hear you.
Sumit Gupta
Is it fine now?
Nikhil Chopra
Yeah, yeah.
Sumit Gupta
So can you tell us the split of the domestic growth in volume price?
Narayan Saraf
So 14 is the domestic growth. Price is around 7% and volume is also 10%.
Sumit Gupta
Pardon?
Narayan Saraf
14% is the growth of domestic business, out of which price and volume are 7% each.
Sumit Gupta
Okay, okay. And with respect to the like margin guidance on the operating EBITDA front, so do you still maintain this 27 to 29% for full year?
Nikhil Chopra
Yeah.
Narayan Saraf
Yes.
Nikhil Chopra
Yeah. If you look at the guidance that we had given at the starting of the year was 27 to 29%.
Sumit Gupta
Yes.
Nikhil Chopra
To historically see and track us, our guidance, we always want to be at the top, at the top percentile of our guidance. So that will continue to be there for the year.
Sumit Gupta
Sure. And so lastly on the API business, it witnessed a strong growth of nearly 40%. So can you highlight what drove this and how should we see this business over the Next, let’s say two to three years?
Narayan Saraf
So we have always maintained for us API’s priority more from captive consumption perspective. And this growth is largely coming in from some of the demand which was pushed last year because of higher inventory for our key products. So nothing substantial or significantly has changed. Last year was a slightly slow year for us. So from a Q1 perspective, it was also operating on a lower base. No substantial or significant changes per se or upside on the demand front.
Sumit Gupta
Okay, so was there any like any particular molecule which you can highlight?
Narayan Saraf
No, we have always been largely. A lot of our demand has been kicking in from diclofenac, you know, API, which we tend to export a lot. And that uptake has been positive for us in Q1.
Sumit Gupta
Sure. Thank you. All the best.
Jason D’souza
Thanks. Thanks. Sumitu, just one more question that’s come on the Wall. The optal business has rebounded pretty has recorded very strong growth at 19% as per IQ. Is this the reason primarily because of the new product launches or is it because of the historic old products?
Sumit Gupta
In fact if we look at our portfolio, the overall chronic and acute, the historic legacy portfolio which we were carrying have all registered significant growth. Brands like Vegamox, Vegadexa, Travacom have all been registering double digit 12, 13, 14% growth plus. So this growth has largely been a function of our acquired portfolio registering very strong demand in the market. When we started off this business was trending at close to 40 crores quarterly run rate. Now we are close to 50 crores. And we will keep on building on this portfolio which we have. New launches have happened, they are contributing but it’s going to take some time before they become a significant contributor to the overall portfolio.
Nikhil Chopra
Couple of additions in ophthalmology today we have a field force of 105 people. We cover around 14,000 ophthalmologists. The market has been growing at low single digit and we’ve been the fastest growing company today in the ophthalmology segment growing at 19%. Today we are six ranked company and our expectation is that probably nine months to a year from here we should be in top five.
Jason D’souza
Good. Just the last question. We’ll get back to the queue which is on the wall in terms of the other income which is at 15 crores, what is the reason for it and how do we see operating cash flows for the entire year and for the quarter?
Narayan Saraf
Yeah. So the reason of the other income being 15 crores is because we had the surplus cash which we have invested into as per treasury policy which has yielded us good returns. And the cash flow. We clearly expect the yearly cash flow to operating EBITDA in the range of 75 to 78% for the full year.
Nikhil Chopra
26.
Jason D’souza
Good. We can go back to the queue.
operator
Sure. Participants who wish to ask questions please press star and one on your touchstone telephone. Ladies and gentlemen, to ask a question please press star and 1. The next question is from Gaurav from Antique. Please go ahead.
Gaurav
Yeah. Thank you. Good afternoon. So this quarter we’ve seen almost 16% year on year growth in staff cost. Have there been any field force expansions that we’ve undertaken this quarter?
Narayan Saraf
No. So there has been no major expansion in the field force. It’s mainly because of the yearly improvement and the field incentive that we have provided.
Gaurav
So this would be the new base going forward, right?
Narayan Saraf
Yeah.
Gaurav
Okay. And in terms of the acquisition consummating what do you think are the major milestones for the JB management to deliver so that acquisition kind of concludes within this fiscal year?
Jason D’souza
I think Gaurav, whatever is stated in the press release is as much as what we can state which is already out there. So I think beyond that will be very difficult for us to comment. But for us at JB it is business as usual.
Gaurav
Okay. Any guidance on the India business? We’ve delivered very strong growth. 14% on a year. On year basis we’ve said that we would deliver 300 to 400bps outperformance to the market. So do we see the market growth coming up to 10% and this 14% being delivered on a full year basis.
Nikhil Chopra
For us, the market market should grow 8 to 10% depending upon the base variability. And as guided earlier we should be able to grow three to 400 weeks better than the market. That guidance continues to be there.
Gaurav
Okay sir. All the best. Thank you.
operator
Thank you. Participants who wish to ask a question please press Star and one.
Jason D’souza
Just before we take the next question. On the CDMO business the question which has come in is how do we see Q2 playing out which is a low base and Also looking at Q3, Q4 which is a high base. So do we see CDMO back to double digit growth.
Nikhil Chopra
CDMO is what has been shared earlier. Our average run rate for H1 I.e. q1 and Q2 should be at around 120 crore which we should be able to deliver. And probably for H2 the run rate should be close to 130 crore. And then gradually we’ll start next year with average run rate of around 140 to 145 crores. That is where we stand. And by end of the year as guided earlier our CDMO growth should register. The growth should be between 12 to 14% for the year.
Jason D’souza
Thank you. Yeah, we can go back to the queue.
operator
Thank you. Participants who wish to ask questions please press Star and one. Next question is from Akshay Shinde from SMIFS limited. Please go ahead.
Akshay Shinde
Thank you for opportunity. I have just one question. So any development you want to share in export formulation business with respect to row market expansion.
Narayan Saraf
So in row market basically we have filed a lot of products over the last two years. And the first phase of, you know the pipeline getting approvals should essentially kick start from September, October of this year which are going to be 8 to 10 molecules across 14 to 16 key markets. They will be launch quantities which should ideally start flowing from. From Q4 of this financial year and full commercial annualized benefit we should start seeing accruing in financial year 27. We have done these new launches over three phases. The first phase of pipeline starts getting approvals now.
The second phase of our pipeline starts getting approvals from H2 of next financial year. So this will keep happening for the next two to three years which should be be significant value addition to our row markets.
Jason D’souza
Thank you. Can you hear us?
Rashmi
Yeah, that is helpful. Thank you.
Jason D’souza
Thank you. I will just take. There’s one more question that’s on the wall. Selakar Tea has entered into the top hundred brands in the country in the month of June. How do we see the performance of this brand and do we see this entering into top 100 in Matt very soon? What are some of your thoughts here?
Narayan Saraf
Yeah, we are very hopeful that, you know, the fact that it’s entered in the top hundred for a month’s time, we should be able to continue to see the momentum because it’s a franchise which is growing at almost 20% plus. We hold leadership position in this franchise. We have done a lot of work in the area of for diabetic hypertension and created a very niche position for clinidipine plus ARB in this particular segment. The market therapy shaping work continues which is expanding the market and we being a market leader are seeing good results on that.
So we are very confident that in the near future, very soon, we will see this top hundred reflection as part of the mat reflection as well.
Jason D’souza
Thank you. We can go back to the queue.
operator
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your touchstone telephone. Next question is from Gauravdee from Antique, please. Go ahead.
Gaurav
Yeah, thank you. So what would be the RD spend for this quarter and what would be the Same number for 4Q and 1Q of last year, please?
Narayan Saraf
It’s very negligible for us, just about close to 1% and it’s pretty much in line with what it was in Q1 of last year as well.
Gaurav
And this would be mostly towards international formulations?
Narayan Saraf
Yeah, essentially, yes. A significant part of it goes towards international formulations. And as we mentioned that, you know, we have done, we have been working a lot on building our international pipeline which are being registered across three phases. So substantial part of this goes towards building up that pipeline.
Gaurav
Okay, sir, thank you.
Jason D’souza
I have one last question on the wall which is on the Razel franchise. Brazil has recorded extremely strong growth in this year and ever since it has been acquired. How do we see this portfolio playing out over the next two to three years. Do we see these strong growth rates continuing?
Narayan Saraf
We are fairly confident that this momentum which we have built on the brand post its acquisition, it will continue. As mentioned earlier, it was reflecting 60 crores almost 24 months during the acquisition. During the acquisition it is close to 100 crores. And a lot of these combinations which we are working on Razel brand and the single molecule, we have been able to build a momentum on that. So the statin has been a good value addition which allows us to further drive productivity with our core cardiologist prescriber base, which includes cardiologists as well as consulting physicians.
And the work which we are trying to do on the lipid side with this brand has yielded positive results. So this will continue to grow at the same pace as what we have seen over the last 12 months.
Jason D’souza
Great, thanks. I think I don’t see there are any more questions that are left. And I just would like to hand this over back to Nikhil Chopra for his closing remarks.
Nikhil Chopra
Thank you. Thank you all for attending the conference call. Business continues to be as usual at jv but which I shared earlier, once again re emphasizing the fact figures close to 1100 crore top line. That is what we could report for the quarter. Best in class India growth 14%. That is what we could achieve. Operating EBITDA excluding one off 330 crore pad, 214 crore. That is excluding one off which is growing at 21%. 68.2% gross margin and 30.2% operating EBITDA margins. That is how at least we could achieve these all figures for the quarter. And we will continue to be a value accretive company for our stakeholders and shareholders.
And thank you all for showing the confidence in us. Thank you once again.
Narayan Saraf
Thank you.
operator
Thank you very much on behalf of JB Pharma. That concludes this conference. Thank you for joining us ladies and gentlemen. You may now disconnect your lines.
Jason D’souza
Thank you.