KIE has a ‘buy’ call on the stock with a target price of Rs 2,025.
The domestic brokerage believes that JBCP offers a healthy mix of a robust domestic franchise, niche CMO presence and measured exports strategy, aided by peerless execution.
“Having primarily grown organically until FY2022 and later on aided by benefits from acquired brands, JB has handsomely outperformed the IPM in the past decade by ~600 bps and currently ranks 22 in the IPM,” said Alankar Garude, Analyst at Kotak Equities.
Backed by improved MR productivity in India amid a healthy CMO order book and steady exports traction, Garude said that they expect strong 17% and 19% EBITDA and PAT CAGRs respectively over FY2024-27E for JBCP.Analysts at KIE expect JBCP to trade at a premium to other domestic-focused companies, owing to its leading market share across its legacy brand families, imminent ramp-up of the acquired portfolios, robust CMO traction, lesser exposure to the US, EU and other regulated markets and an unparalleled execution track record.Also read: Wipro shares jump over 3% after double upgrade from CLSA“While the stock has had a phenomenal run over the past five years (up 10X), we believe current valuations of 21X FY2026E EV/EBITDA and 33X FY2026E P/E are yet to fully encapsulate the growth potential of the business,” Garude added.
However, the brokerage firm has also stated key risks for the company like senior management exits, resurfacing of NDMA concerns relating to Rantac, high domestic sales concentration and aggressive amortization policy of the acquired brands.
JB Chemicals & Pharmaceuticals shares were trading 2% higher at Rs 1,791 on BSE around 3:15 pm.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
