MOSL: JUBILANT LIFE SCIENCES (Buy) - In-line results - outlook positive - Profitability improves in both LSI and Pharma
JUBILANT LIFE SCIENCES: In-line results; outlook positive; Profitability improves in both LSI and Pharma
(JUBILANT IN, Mkt Cap USD2.0b, CMP INR847, TP INR1110, 31% Upside, Buy)
- In-line operational performance: Revenue rose 37% YoY to INR22.5b (our estimate: INR21.3b) in 4QFY18, led by healthy growth in Life Science Ingredients (LSI) and addition of Triad sales. Improved profitability in both Pharma (Ex-Triad) and LSI led to 170bp expansion in the EBITDA margin to 20.3% (our estimate: 21%). However, one-time charge due to product development expenditure and higher tax outgo led PAT growth of 3.9% YoY to INR1.5b. Adjusting for the same, PAT stood at INR2.2b (our estimate: INR2.2b).
- Superior show continues in LSI; Pharma margins on uptrend: JLS continued witnessing healthy traction in LSI (43% of sales), which grew 24% YoY to INR9.7b for the quarter. EBITDA remained elevated at INR1.9b, led by strong growth in life science chemicals and nutritional products. Even Pharma segment (Ex-Triad, 35% of sales) reported a strong EBITDA margin of 37.4%, led by better execution in specialty injectables.
- Strong performance for FY18: For the full year, JLS' sales grew 25.8% YoY to INR76b, EBITDA margin stood at 20.1%, and adj. PAT rose 23.3% to INR7b. Adjusting for Triad, EBITDA margin stood at 22.4% for FY18.
Jubilant Life Science is an integrated pharmaceuticals and life sciences company. Co. offers a range of products and services to its customers across the globe. Co. operates two business segments: Pharmaceuticals and Life Sciences Products and Services and Agri and Performance Polymers ("APP"). In Co.'s Pharmaceuticals and Life Sciences Products and Services segment, Co. manufactures and provides Fine Chemicals and Advance Intermediates for the global pharmaceuticals, agrochemicals and life sciences industry. The products in Co.'s APP segment have various applications in industries such as pharmaceuticals, agrochemicals, textiles and foods.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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