Global rating agency S&P has assigned preliminary speculative grade 'BB-' corporate long-term credit rating to Jubilant Pharma (JPL) with a stable outlook.
The rating agency said it is also assigning the preliminary 'BB-' rating to the proposed US dollar notes to be issued by JPL.
"The rating on JPL reflects the company's exposure to the highly competitive and regulated generics markets, modest size, and limited product pipeline," S&P Global Ratings said in a statement.
JPL's presence in niche segments, limited competition, fair profitability, limited investment needs, and commitment to deleverage with internal cash flows strengthen its credit profile, it added.
"We believe JPL's good position in niche market segments in active pharmaceutical ingredients (API), and radiopharma segment help partly offset the limitations of size and competition in its generics business," S&P said.
The company's presence in some smaller but less competitive generic segments helps protect its margins, it added.
On the stable outlook on JPL, S&P said it "indicates our expectations that the company will continue to receive product approvals at a healthy rate and commercialise them (especially radiopharma products) over the next 12 months".
Overall, S&P said it expects JPL to maintain its increasing commitment to quality and regulatory compliance, without which its credit quality could materially weaken.
"The company has resolved warning letters from the US Food and Drug Administration (USFDA) received regarding its two contracted manufacturing facilities in the US," it said.
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