Jubilant Life tumbles after Q1 PAT declines 52% to Rs 88 cr

Jubilant Life Sciences tumbled 5.07% to Rs 787.50 after the company's consolidated net profit declined 52.4% to Rs 88 crore on 14% slide in net sales to Rs 1845.24 crore in Q1 June 2020 over Q1 June 2019.

Consolidated profit before tax fell 54.6% to Rs 122 crore in Q1 June 2020 over Q1 June 2019. Tax expense declined 59% year-on-year to Rs 34.09 crore in Q1 June 2020. The result was announced after market hours on Friday, 4 September 2020.

Consolidated EBITDA slipped 30.1% to Rs 310 crore in Q1 June 2020 from Rs 444 crore in Q1 June 2019. EBITDA margin declined to 16.4% in Q1 June 2020 from 20.4% in Q1 June 2019. Jubilant Life clarified it reduced net debt on a constant currency basis by Rs 343 crore during Q1 June 2020.

R&D expenses during Q1 June 2020 stood at Rs 57 crore which is 5.2% to segment sales. R&D debited to P&L is Rs 43 crore which is 3.9% to segment sales.

Commenting on the company's performance, Shyam S Bhartia, Chairman and Hari S Bhartia, MD of Jubilant Life Sciences said, During the quarter, the company's performance in the Life Science Ingredients (LSI) business has been better in EBITDA as well as in margins on both year-on year as well as quarter-on-quarter due to good demand and improved pricing of select products. Drug Discovery & Development Solutions (DDDS) segment witnessed year-on-year growth in revenues as well as EBITDA led by healthy demand from customers. The company's performance in the Pharma business had a temporary negative impact due to production suspension at our API plant. This facility has resumed operations from the month of June 2020 and since then it has been operating at a normal capacity. We are witnessing strong demand conditions and improved pricing environment."

"Our Radio pharma and Allergy business saw an interim decline in revenues due to postponement of elective procedures led by COVID-19 related restrictions on hospital visitations. Adverse impact in these businesses was mitigated by growth in CMO and Dosage businesses. With the gradual opening of the US healthcare markets, demand conditions in our Radio pharma and Allergy business have started improving from second half of Q1'FY21 with substantial normalisation achieved June 2020 onwards. In our CMO business, we have entered into four separate clinical and commercial supply agreements for the GMP manufacture of novel COVID-19 treatment and vaccine candidates. Strong demand conditions in this business, along with our business development initiatives, promise upside to performance in the near term. Overall, barring unforeseen circumstances, we expect strong performance in our Pharma, LSI and DDDS business in the remaining three quarters of FY21."

Commenting on future outlook, the company said it sees strong demand recovery and new business sign-ups. The pharma major also assured that COVID-19 is not likely to have a material impact on overall performance during FY21, provided the pandemic situation does not materially deteriorate going forward. Overall, the firm expects strong performance in our pharma, LSI and DDS business in the remaining three quarters of FY21.

Jubilant Life Sciences is an integrated global pharmaceutical and life sciences company engaged in pharmaceuticals, life science ingredients and drug discovery & development solutions businesses.

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