JB Chemicals & Pharmaceuticals Ltd Ltd Quarterly Results Q4 FY 25 stock analysis

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Sector Outlook: Positive

Domestic formulation & CDMO continues to deliver strong growth

JB Chemicals and Pharmaceuticals Ltd. reported revenue growth of 10.2% YoY / down 1.5% QoQ to Rs. 9,495 mn. The domestic business continued outperforming the IPM, which grew 7%, with JB Chemicals achieving 13% growth, led by major brands posting strong growth. Russia and the branded generics exports business recorded double-digit growth internationally. The CDMO business bounced back strongly in the fourth quarter, and the order book is also robust for the next few quarters. While API remain muted, sales during the quarter. EBITDA increased 14.3% YoY / down 11.0% QoQ to Rs. 2,264 mn, while EBITDA margin stood at 23.8% (up 86bps YoY / down 257 QoQ). Despite the in-licensed ophthalmic business, which has limited margins, Gross Profit margins witnessed annual improvement of 97 bps, reaching 66.1%. Profit after Tax stood at Rs. 1,457 mn (up 15.5% YoY / down 10.3% QoQ) in Q4FY25, while the PAT margin came at 15.3% versus 16.9% in the previous quarter. The company’s domestic business continues to be one of the fastest-growing IPM. They have built a strong foundation over the last five years. With 75% of India’s branded formulation sales in progressive, faster-growing segments, we are confident in sustained strong performance as we advance.

Key Concall Highlights

Domestic Business Outlook:

JB Chemicals will continue to pursue growth in the domestic market, which will lead to a strategic expansion across key therapy areas. The company’s flagship brands, including Aciloc, Cilacar, Rantac, Nicardia, and Spoton, delivered robust performance, underscoring their strong market positioning and brand equity. The integration of Azmarda into the domestic portfolio has further strengthened JB Chemicals’ presence in the cardiovascular segment. Azmarda’s in-house manufacturing and expanded field force coverage are expected to enhance margins and penetration. The company remains focused on field force optimization, improving MR productivity, and therapy expansion, which are expected to drive sustainable growth.

International Business:

On the international front, the business recorded an annual growth of 10.6%, aided primarily by strong performance in South Africa, the Russia-CIS region, and the US market, which benefited from a better product mix and higher volumes. JB Chemicals continues to invest in R&D and product filings, particularly for the regulated markets, to drive future international expansion.

Ophthalmology Portfolio:

The US business remained stable in the ophthalmology portfolio, with steady performance and contribution from new product launches. The company is focused on expanding this segment by adding niche and difficult-to-manufacture ophthalmic products to its portfolio. Meanwhile, MR productivity remains a priority area, with efforts underway to optimize the field force and increase prescription efficiency. The addition of new therapy areas is expected to improve per-MR productivity further.

MR Productivity:

JB Chemical’s MR productivity is a key pillar of its domestic business strategy. The company is actively working on field force optimization, aiming to improve the effectiveness of its existing team rather than just expanding headcount. This involves better deployment of MRs across geographies, improved doctor coverage, and deeper engagement in high-potential therapy areas. Integrating new therapies, particularly following the acquisition of Azmarda, has created opportunities to leverage the field force more efficiently. The company also focuses on increasing MR prescription productivity through better training, scientific communication, and performance tracking.

Cost Optimization Initiatives:

The company is also undertaking multiple cost optimization initiatives, focusing on manufacturing efficiencies and operational improvements. These efforts are expected to support margin expansion, driven by a better product mix and increased in-house production capabilities.

Key Brands performance:

Key brands like Metrogyl in the anti-infective segment and Sporlac in the gastrointestinal portfolio continued to perform well, contributing meaningfully to their respective therapy areas. Sporlac, in particular, maintained strong brand recall and market penetration.

CDMO Business:

The company ranks among the top 5 global CDMO players in lozenges, and recent wins in global development projects are expected to materialize over the next 12–18 months. The company is actively enhancing its contract pipeline and improving plant utilization rates.

Valuation and Outlook

JB Chemicals & Pharmaceuticals has emerged as one of India’s fastest-growing pharmaceutical companies, driven by a focused strategy of expanding its high-growth domestic business and strengthening international diversification. In Q4FY25, the domestic business contributed 58% of total revenues, reinforcing its role as the company’s key growth engine. This segment reported a robust 25% CAGR over FY22–25, underpinned by leadership in chronic therapies. With six brands now ranked among the top 300 in the IPM, JB Pharma has established a trusted franchise with deep prescriber engagement and expanding market share. The international business, including the CDMO segment, Russia, and ROW markets, also delivered a healthy performance during the quarter. As we advance, the management aims to scale the India and CDMO business to 75–80% of total revenues over the medium term. Domestic businesses are expected to consistently outperform the IPM, with the strategic goal of increasing the chronic segments. On the international front, JB Pharma focuses on deepening its CDMO client base, launching new lozenge innovations, and expanding into newer regulated geographies. Despite external pressures like raw material inflation, JB Pharma aims to sustain operating margins in the 27–29% range through cost optimization and a strategic product mix. Overall, the company’s transformation into a branded generics and CDMO-focused business with high-margin and high-return ratios places it on a strong trajectory for sustainable growth. The company is well-positioned for long-term growth visibility with a rich portfolio of legacy and newly acquired brands, operational efficiencies, and strategic market positioning in chronic therapies and global CDMO.