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Jubilant Pharmova Ltd.

BSE: 530019 Sector: Health care
NSE: JUBLPHARMA ISIN Code: INE700A01033
BSE 15:14 | 08 Dec 386.55 6.65
(1.75%)
OPEN

374.70

HIGH

390.85

LOW

374.70

NSE 14:59 | 08 Dec 387.95 7.95
(2.09%)
OPEN

380.00

HIGH

390.90

LOW

376.40

OPEN 374.70
PREVIOUS CLOSE 379.90
VOLUME 9239
52-Week high 617.00
52-Week low 305.20
P/E 67.11
Mkt Cap.(Rs cr) 6,158
Buy Price 386.25
Buy Qty 29.00
Sell Price 387.00
Sell Qty 100.00
OPEN 374.70
CLOSE 379.90
VOLUME 9239
52-Week high 617.00
52-Week low 305.20
P/E 67.11
Mkt Cap.(Rs cr) 6,158
Buy Price 386.25
Buy Qty 29.00
Sell Price 387.00
Sell Qty 100.00

Jubilant Pharmova Ltd. (JUBLPHARMA) - Chairman Speech

Company chairman speech

Dear Fellow Shareholders

In FY 2022 we reported stable revenues despite COVID-19 relatedchallenges due to the diverse range of our businesses. While our SpecialtyPharmaceuticals business reported improved performance on account of recovery inRadiopharma and growth in Allergy Immunotherapy businesses the Contract Manufacturing ofSterile Injectables and Non-sterile Products (CMO) business witnessed lower sales due totapering of COVID-19 related opportunities. Generics and API businesses reported lowerperformance vs. last year. While Generics business was impacted due to the import alertthe API business witnessed lower volumes on account of the asset upgradation activity. OurContract Research and Development Services businesses continued to report robust growthduring the year.

During the financial year world's economic and social healthinfrastructures continued to be affected by the steep rise in raw material prices supplychain disruptions in China and globally and the spread of another wave of COVID-19 led bythe Omicron variant at the start of 2022. Towards the end of the year things were furtherdisrupted by the Russia-Ukraine war. These macro events adversely impacted the globaleconomic output.

As per IMF's July 2022 World Economic Outlook report globalgrowth is projected to decline from an estimated 6.1% in 2021 to 2.9% in 2022. The ongoingRussia-Ukraine war has significantly contributed to the slowdown in global economic growthin 2022 and the global inflationary trends. Infiation levels in the US and severaldeveloped economies are at a several decade high and have risen sharply in developingmarkets from February 2022 onwards. India too has witnessed a spike in inflation andweakening in economic outlook for the year as rising inflation supply chain disruptionsand geopolitical tensions taper recovery. As per World Bank's June 2022 forecast theIndian economy is expected to grow at 6.1% in FY 2023 down from the 8.7% expansionin the previous financial year.

Business Objectives

We are an integrated global pharmaceuticals Company present across theentire pharmaceutical value chain. We take pride in our positioning as one-stop-shop inthe global pharmaceutical market supplying products and services to customers in over 85countries. Our diversified businesses are segmented in three major verticals namely‘Pharmaceuticals' ‘Contract Research and Development Services' and‘Proprietary Novel Drugs'. We are globally recognised as a ‘Partner ofChoice' by leading pharmaceutical companies and our strength lies in the uniqueofferings of pharmaceuticals and services especially in Specialty Products. We areengaged in continuous improvement of products and processes to enhance quality and costcompetitiveness in order to build value for our customers. As a responsible corporatecitizen we are committed to safeguarding the environment and maintaining a triple bottomline approach of sustainability through delivering a high social environmental andeconomic performance.

The Pharmaceuticals segment is engaged in manufacturing and supply ofRadiopharmaceuticals with a network of 48 Radiopharmacies in the US AllergyImmunotherapy Active Pharmaceutical Ingredients (APIs) Solid Dosage Formulations and inthe Contract Manufacturing of Sterile and Non-Sterile products (CMO) through sixmanufacturing facilities that cater to all the regulated markets including the US Europeand other geographies. We have created several competencies in the segment with our strongR&D capabilities including an innovative product portfolio in SpecialtyPharmaceuticals with high entry barriers and limited competition global competitive edgedue to low-cost from vertically integrated operations market leadership in key productsand business segments. These factors have enabled us to deliver robust results in the pastand has ensured that we have a strong base for future growth in our Pharmaceuticalssegment.

The ‘Contract Research and Development Services' segmentthrough Jubilant Biosys Limited provides collaborative research and partnership for DrugDiscovery through two world class research centers in India. The business has doubled itscapacity at the Greater Noida facility which became operational in August 2021.

In the ‘Proprietary Novel Drugs' our lead program

– LSD1/HDAC6 inhibitor has successfully started Phase I/ IItrials. Additional IND filings with US FDA for pipeline programs are expected to follow inFY 2023.

From Q1 FY23 we have reorganised our reporting segments and newsegment reporting structure is as below:

1. Radiopharma

2. Allergy Immunotherapy 3. CDMO Sterile Injectables

4. Contract Research Development and Manufacturing Organisation (CRDMO)

5. Generics

6. Proprietary Novel Drugs

In July 2021 the Board of Directors of Jubilant Pharmova Limited (JPM)approved demerger of the Active Pharmaceutical Ingredients (APIs) undertaking of JubilantGenerics Limited (JGL) and vesting of the same with JPM on a going concern basis to beimplemented through a scheme of arrangement between JGL and JPM and their respectiveshareholders and creditors under Sections 230 to 232 and other applicable provisions ofthe Companies Act 2013. In May 2022 the Company received NCLT approval for demergerscheme of APIs business. On 1st July 2022 we filed the NCLT order that approved thescheme of arrangement with registrar of companies immediately after which the demergerbecame effective with appointed date as April 1 2022.

The business rationale behind this reorganisation plan are as below: zCreation of a small molecule discovery and chemistry focused vertical present across valuechain of CRO & CDMO of Innovative and Generic APIs z Synergies between CRO& CDMO businesses can be realised more effectively in a holding / subsidiary companystructure as compared to fellow subsidiary structure z This would also help insupporting our customers for their needs from early stage of research to commercialisationof active ingredients and will provide competitive edge to this business

Performance Review

Total Revenue from Operations in FY 2022 stood at H61302 million vs.H60985 million in FY 2021. International revenue was at H58025 million with a share of95% to the total revenue.

Pharmaceuticals revenue for FY 2022 came in at H56507 million vs.H57897 million in FY 2021 accounting for 92% of the total revenue.

Contract Research and Development Services segment's revenueimproved to H4574 million from H3052 million in FY 2021 resulting in 7% share of totalrevenue.

Earnings before Interest Tax Depreciation and Amortisation (EBITDA)was at H11676 million vs. H14141 million with a margin of 19.0% as compared with 23.2%in FY 2021.

Depreciation and amortisation in FY 2022 was at H3817 millionvs. H3490 million in FY 2021. Finance cost stood at H1455 million vs. H1841 millionlast year.

Profit After Tax came in at H4130 million as against H5739 million inFY 2021 with an Earnings Per Share (EPS) of H26.00.

In our Proprietary Novel Drugs business segment we are developingbreakthrough therapies in the area of oncology and auto-immune disorders.

Dividend

The Board has proposed a dividend of 500% per equity share of H1 facevalue for the year.

Outlook

The Company has established strong position and has robust growthlevers in its Specialty Pharmaceuticals and CMO businesses and plans to invest to augmentcapacities and capabilities in these businesses to drive growth over the medium term. Inour Generics business we are undertaking remediation activities to resolve the regulatorystatus at the Roorkee facility and in our API business we are undertaking assetupgradations to increase production volumes. In our Contract Research and DevelopmentServices business we are expanding capacities to drive growth over the medium term. Wecontinue to stay focused on our strategy of being closer to the customer and of furtherstrengthening our leadership position in defined businesses.

Conclusion

We would like to thank all our valued stakeholders including ourcustomers vendors lenders and shareholders for continuing their support and upholdingtheir confidence and trust in us. We remain deeply grateful to all our employees globallyfor their contribution and commitment to the Company.

Warm regards
Shyam S. Bhartia Hari S. Bhartia
Chairman Co-Chairman and Managing Director

.