Jubilant to hive off non-core business

NEW DELHI: Pharmaceutical company Jubilant Organosys is demerging its non-core business — agri and performance polymer — into a separate subsidiary to focus on its pharma business. The Delhi-based company, which reported a turnaround with a net profit for the quarter ended December 31, is also raising up to Rs 1,500 crore to repay part of its debt and make capital investment, a senior company official said.

“The board has in-principle approved the demerger of agri and performance polymer business into a separate company which is expected to be completed by the third quarter of next fiscal,” Jubilant Organosys director (finance) R Sankaraiah said. In June last year, the firm had decided to sell part of its performance business which has been put on hold.

The existing shareholders of Jubilant Organosys will have a proportionate stake in the new company which would also be listed.

Jubilant Organosys, largely a contract manufacturer of drugs, reported net profit of Rs 101 crore for the quarter ended December 31, from a loss of Rs 88 crore last year, while its sales grew 6% to Rs 961 crore. Mr Sankaraiah said the company has lowered its annual EBIDTA by 5% from its forecast of Rs 875-900 crore because of foreign exchange fluctuations and change in the execution profile of some of its contracts.

The company’s share price closed at Rs 33 on BSE, down 4%, on a day when healthcare index fell 2.65%. Jubilant’s quarterly earnings was announced after trading hours.

The company’s board on Thursday also passed an enabling resolution to raise an additional Rs 1,000 crore through equity or equity-linked instruments, allowing the firm to raise as much as Rs 1,500 crore. In October, the company had got the board’s nod to raise Rs 500 crore.