JB Chemicals & Pharmaceuticals Limited Q1 FY23 Earnings Conference Call Insights

Key highlights from JB Chemicals & Pharmaceuticals Limited (JBCHEPHARM) Q1 FY23 Earnings Concall

Q&A Highlights:

• Rahul Jeewani from IIFL Securities asked about the drivers of growth on the CMO business in 1Q23. Nikhil Chopra CEO replied that overall, the company saw demand coming across all markets outside India. The demand surge in 4Q continued in 1Q23.

• Rahul Jeewani from IIFL Securities also asked about CMO business outlook for FY23. Nikhil Chopra CEO answered that looking at the trajectory, the company expects to touch INR100 crores. JBCHEPHARM will continue to see plus minus 10% demand coming. And overall contribution from CMO is expected close to 13-14% for FY23.

• Nikhil Mathur of HDFC Mutual Fund asked if from 2Q onwards EBITDA margins would be on the higher end of 24-26% guidance range. Nikhil Chopra CEO answered that it can vary within the range of 24-26% since the environment is very volatile.

• Anubhav Aggarwal from Credit Suisse enquired about payback period of the acquisition from Reddy’s. Nikhil Chopra CEO said that generally the payback period is six years. However the aspirations are much bigger than committed.

• Anubhav Aggarwal from Credit Suisse also asked how Rantac, Metrogyl have grown in 1Q23. Nikhil Chopra CEO answered that they are growing low double digit for the quarter. The company added that it is working at a very high base of both the products.

• Anubhav Aggarwal from Credit Suisse enquired about the seasonality in Sanzyme portfolio. Nikhil Chopra CEO replied that the same traction should be seen as in 1Q, probably 3Q onwards the demand might go down a bit.

• Rashmi Sancheti with Dolat Capital asked about South Africa sales growth and the launches done. Nikhil Chopra CEO said that the company has seen upwards of 25% growth during 1Q23 and both public and private business continues to do well with a ratio of roughly 50:50 contribution.

•  Rashmi Sancheti with Dolat Capital enquired about the numbers for FY23 of long-term debt and short term borrowing.  Nikhil Chopra CEO answered that at the end of 1Q23, the company had a debt of around INR325 crores, of which about INR300 crores was long term debt and balance working capital. Cash and investment was at INR180 crore plus at 1Q23 end.