Rakesh Jhunjhunwala’s portfolio stock Jubilant Pharmova has fallen 54 per cent to Rs 398.15 apiece on BSE from Rs 890 (52-week high) in one year. The company reported a 72 per cent drop in net profit to Rs 59.55 crores for the period ended March 31, 2022. Revenue for the quarter fell 3.9 per cent to Rs 1,524.57 crore from Rs 1,586.47 crore on-year, however, it was up 16 per cent sequentially. Big bull Rakesh Jhunjhunwala held 3.61 per cent or 57.50 lakh equity shares and his wife Rekha Jhunjhunwala owned 3.15 per cent stake or 50.20 lakh equity shares in this drug maker as of March 31. In the December quarter, Rakesh Jhunjhunwala and his wife collectively held 6.3 per cent stake in the company.

ICICI Securities has cut target price on the stock to Rs 447 from Rs 550 earlier, but upgraded its rating to ‘add’ from ‘hold’ earlier. It believes that after nearly 44 per cent correction in the last 6 months, the stock valuations have turned reasonable. While it noted the slower-than-expected recovery in radiopharma and generics businesses, and regulatory hurdles as key downside risks. “While demand in radiopharma is witnessing a recovery, pricing pressures and import alerts continue to impact the generics business,” it added.

Motilal Oswal Financial Services has pegged a target price of Rs 430, a 6 per cent upside from last close, valuing the stock at 7x EV/Ebitda on a 12-month forward basis. “The current valuation adequately factors the upside from the earnings growth,” it added. The research and brokerage firm expects a moderate 9% Ebitda CAGR over FY22-24 on account of moderate US business prospects due to the import alert at Roorkee; Radiopharma business under gradual recovery; lower demand, resulting in price erosion in the US Generics segment; and slower offtake of API due to plant renewal related activities.

Analysts at Nirmal Bang see 32 per cent upside in the stock price with a target price pegged at Rs 532 apiece. The brokerage firm said that the key catalysts for earnings from here on will be the ramp-up of Ruby Fill sales, recovery in MAA & DTPA sales, new launches on Radiopharma side and impact of cost rationalization initiatives in the Radiopharmacy business. 

The brokerage firm has recommended to buy Jubilant Pharmova stock. It believes that the company will target large pharmaceutical and biotech companies for parenteral products with a manufacturing platform able to produce several types of vaccines – live, mRNA and inactivated/subunit vaccines. “We revise our revenue estimate by increasing revenue in CMO, Specialty Pharma and CRDS segments and lower other expense estimates to 23% of sales in FY23 and FY24,” it said.