S&P lowers outlook for Jubilant Pharma to negative, sees weak performance

Operating performance may remain weak due to regulatory issues, says rating agency.

Standard and Poor’s (S&P) has lowered outlook on Jubilant Pharma Ltd from “stable” to “negative” on likely weaker operating performance by the drugmaker.

The rating agency affirmed the long-term issuer credit rating at “BB”. Jubilant’s operating performance could remain weak over the next 12 months due to regulatory issues in its generics business and the loss of one-time development and manufacturing contracts related to Covid-19.

The negative outlook reflects the likelihood of a downgrade if the group's EBITDA margins remain below 20 per cent and debt-to-EBITDA ratio stays above 2x without signs of improving toward about 2x beyond the next