Jubilant Pharmova (JPL) posted a strong showing in Q4FY25 with inline revenue, but beating our EBITDA/PAT estimates. EBITDA margins expanded 247bp YoY/213bp QoQ aided by a better product mix.
JPL delivered a robust quarter for its CDMO, CRDMO and allergy businesses. We are optimistic on JPL due to: i) a growth inflection in its US CDMO business, fuelled by rising customer interest; ii) CRDMO growth, bolstered by three major new clients; and iii) generics business, poised for margin improvement. The CDMO Line-3 is set to be commissioned in FY26E, reaching full utilisation within three years. JPL’s partnership with Pierre Fabre for mAbs/ADCs marks a strategic advancement. Maintain ‘BUY’ with an unchanged TP of INR1,385.
Q4FY25: Beats our estimates; robust margins
Jubilant Pharmova’s revenue grew 10% YoY/6% QoQ to INR19.3bn (in-line with our estimates). Gross margin was 67.5% for Q4FY25 in line with our estimates. EBITDA surged 27% YoY/20% QoQ to INR3.5bn (10% beat). EBITDA margin expanded +247bp YoY/+213bp QoQ and was 17.9%, (+159bps beat). Adjusted PAT soared 136% YoY/35% QoQ to INR1.6bn (15% beat). The company further deleveraged its balance sheet with long-term debt declining from INR25.4bn by Sep-24 to INR21.5bn in Mar25. The company delivered OCF of INR10.7bn in FY25 versus INR3.3bn in H1FY25. The ROCE has improved from 9% in FY24 to 10% in FY25.
CDMO, CRDMO in good shape; expecting strong demand for line-3
In high-margin segments, radio-pharma (+16% YoY), CDMO (+31% YoY), drug discovery (+33% YoY) and API (+10% YoY) posted double-digit growth while allergy (+2% YoY) lagged expectations. In low-margin segments, generics revenue plunged 22% YoY while radiopharmacy rose 7% YoY. Radio-pharma held its margin profile while CDMO/drug discovery/API achieved strong EBITDA margins of 28%/26%/21%. Generics business had negative margins in Q4FY25. CDMO line-3 is likely to be commissioned in FY26 and shall see full utilisation by the third year rather than the fourth. CRDMO shall benefit from prior FTE contracts with big pharma clients. Generics may improve with new launches while API and allergy businesses are likely to sustain margin momentum. We see strong growth visibility over next 4–5 years.
Several triggers unfolding; maintain ‘BUY’ with TP of INR 1,385
We are making minor changes in FY26E numbers while we upgrade FY27E EBITDA/PAT by 3%/6% due to CDMO line-3 visibility. Growth in CRDMO, CDMO and MIBG approval stay near-term triggers. Retain ‘BUY’ with an unchanged TP of INR 1,385.
