JB Chemicals nears record high in weak market, rebounds 8% from day's low

Shares of JB Chemicals & Pharmaceuticals gained 4 per cent to Rs 595.80 on the BSE on Friday, bouncing back 8 per cent from day’s low of Rs 550 in an otherwise weak market. The stock has already turned ex-date for interim dividend of Rs 10 per share on Tuesday, March 3, 2020.

The pharmaceutical company's stock was trading close to its record high of Rs 599, touched on February 14, 2020. In comparison, the S&P BSE Sensex was slipped 1,191 points, or 3.1 per cent, at 37,280, while S&P BSE Healthcare index was down 2 per cent at 13,856 points at 11:51 am.

In the past three months, JB Chemicals & Pharma has outpaced the market by surging 48 per cent against 7.8 per cent decline in the S&P BSE Sensex.

The company’s product portfolio is spread across chronic and acute therapeutic segments like cardio vascular, gastro, anti-microbials, nonsteroidal anti-inflammatory drugs (NSAID), etc.  The company manufactures a wide range of innovative specialty products across dosage forms like tablets, injectable, creams & ointments, lozenges, herbal liquids and capsules.

JB Chemicals had reported strong financial performance with profit before tax (PBT) during first nine months ended December 2019, increased by 28.9 per cent year on year (Y-o-Y) at Rs 282 crore. Operational revenues grew 16 per cent at Rs 1,304 crore on YoY basis, on the back of healthy performance by domestic formulation business.

Analysts at Anand Rathi Share and Stock Brokers are positive on the company as the strong overall performance is expected to boost return ratios, with a 19 per cent return on equity (RoE) in FY22. Besides, the operating leverage is likely to help generate healthy free-cash flows and maintain a debt-free balance sheet, the brokerage firm said in company update with target price of Rs 655 per share.