JB Chemicals & Pharmaceuticals (506943) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached INR 1,001 crore, up 13% year-over-year, with domestic business contributing 59% and international 41%.

• EBITDA margin reached 28.4%, at the higher end of guidance, driven by favorable product mix and cost optimization.

• Net profit rose 16% to INR 175 crore, with all major brands showing strong growth and the ophthalmology portfolio gaining momentum.

• International business grew 3% to INR 413 crore, with double-digit growth in South Africa and the US, and high single-digit growth in Russia and branded generics exports.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, with limited review by statutory auditors.

Financial highlights

• Operating EBITDA (excluding ESOP cost) was INR 285 crore, up 13% year-over-year; margin stable at 28.4%.

• Finance costs dropped to INR 2 crore from INR 10 crore due to lower gross debt; net cash position at INR 339 crore as of Sep 30, 2024.

• Operating cash flow for H1 was INR 380 crore, down from INR 421 crore in H1 FY24, mainly due to higher cash tax and inventory buildup.

• Gross debt reduced to INR 82 crore as of September 2024 from INR 358 crore in March 2024.

• Net CapEx for H1 FY25 was INR 49 crore, with full-year CapEx expected to exceed INR 100 crore, 15%-20% of which is growth CapEx.

Outlook and guidance

• Domestic business expected to continue outpacing the market, driven by chronic and high-growth portfolios.

• CDMO business anticipated to rebound strongly in H2 FY25, with deferred $2 million order to be delivered in Q3.

• Operating margin guidance maintained at 26%-28%, with management aiming for the higher end.

• International business expected to close the year with high single-digit growth, with double-digit growth in H2.

• Management continues to monitor geopolitical risks, especially regarding Russia and Ukraine, but expects full recoverability of receivables and assets.