Hold Jubilant Life Sciences, target price Rs 822: ICICI Securities

ICICI Securities has given a hold rating to Jubilant Life Sciences with a target price of Rs 822. The share price moved down by 5.53 per cent from its previous close of Rs 829.60. The stock’s last traded price is Rs 783.75.

Jubilant Life Sciences Ltd., incorporated in the year 1978, is a Mid Cap company (having a market cap of Rs 12571.26 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 1845.24 Crore, down 20.03 % from last quarter Sales of Rs 2307.32 Crore and down -14.29 % from last year same quarter Sales of Rs 2152.78 Crore. The Company reported net profit after tax of Rs 88.01 Crore in latest quarter.

Investment Rationale
Considering recent rally in stock, the brokerage downgrades it to HOLD from Add with revised target of Rs 822 based on FY22E, 8x pharma EBITDA and 4x LSI EBITDA (earlier: Rs749). It has raised target EV/EBITDA for pharma business from 7x to 8x considering potential for additional business from COVID-19 related contracts. Key downside risks: Regulatory hurdles and delay in ramp-up in Ruby-Fill. Key upside risks: Additional business from COVID-19 related contracts.

Promoter/FII Holdings
Promoters held 50.7 per cent stake in the company as of June 30, 2020, while FIIs held 27.2 per cent, DIIs 1.3 per cent and public and others 20.8 per cent.