Motilal Oswal is bullish about Blue Jet Healthcare for target price of ₹865 (26% upside)
Posted: Fri May 16, 2025 9:50 pm
Ascending the value chain
Greek philosopher Aristotle once said, “The secret to business is to know something that nobody else knows.” Blue Jet Healthcare (BLUEJET) is on the path to building a legacy business in line with this philosophy. With its niche product offerings in Contrast Media and Pharmaceutical Intermediaries & API, BLUEJET has been changing the way the healthcare industry caters to the therapeutic needs of patients around the globe. The company has established itself as a reliable supplier to its customers for the past three decades and is now working toward moving up the value chain by significantly increasing its investment in R&D.
Known for its advanced R&D capabilities, backward integration, and focus on complex chemistries, BLUEJET is at the forefront of delivering high-value solutions in regulated and emerging markets. The company’s focus on innovation, quality, and sustainability has positioned it as a key enabler in high-growth therapeutic areas such as cardiovascular, oncology, Central Nervous System (CNS), and diagnostic imaging.
BLUEJET delivered a muted CAGR of 7%/2%/4% in revenue/EBITDA/PAT during FY20-24, as it did not launch new products during this period. Now, with existing products ramping up and new product launches in sight, we expect BLUEJET to post a CAGR of ~27%/24%/19% in revenues/ EBITDA/ PAT over FY25-27E, with a sharp uptick to be seen in the pharma Intermediaries segment. We expect an average EBITDAM of 35.1% during FY25-27E.
We expect FCF generation of INR3.6b during FY25-27E, with cumulative capex of INR5b. The stock is trading at a P/E of ~28x on FY27E EPS of INR24.7 and FY27E EV/ EBITDA of ~20x. We initiate coverage with a BUY rating on the stock with a target price of INR865, valuing the company at a P/E of 35x on FY27E EPS of INR24.7
Greek philosopher Aristotle once said, “The secret to business is to know something that nobody else knows.” Blue Jet Healthcare (BLUEJET) is on the path to building a legacy business in line with this philosophy. With its niche product offerings in Contrast Media and Pharmaceutical Intermediaries & API, BLUEJET has been changing the way the healthcare industry caters to the therapeutic needs of patients around the globe. The company has established itself as a reliable supplier to its customers for the past three decades and is now working toward moving up the value chain by significantly increasing its investment in R&D.
Known for its advanced R&D capabilities, backward integration, and focus on complex chemistries, BLUEJET is at the forefront of delivering high-value solutions in regulated and emerging markets. The company’s focus on innovation, quality, and sustainability has positioned it as a key enabler in high-growth therapeutic areas such as cardiovascular, oncology, Central Nervous System (CNS), and diagnostic imaging.
BLUEJET delivered a muted CAGR of 7%/2%/4% in revenue/EBITDA/PAT during FY20-24, as it did not launch new products during this period. Now, with existing products ramping up and new product launches in sight, we expect BLUEJET to post a CAGR of ~27%/24%/19% in revenues/ EBITDA/ PAT over FY25-27E, with a sharp uptick to be seen in the pharma Intermediaries segment. We expect an average EBITDAM of 35.1% during FY25-27E.
We expect FCF generation of INR3.6b during FY25-27E, with cumulative capex of INR5b. The stock is trading at a P/E of ~28x on FY27E EPS of INR24.7 and FY27E EV/ EBITDA of ~20x. We initiate coverage with a BUY rating on the stock with a target price of INR865, valuing the company at a P/E of 35x on FY27E EPS of INR24.7