Jubilant Life Sciences (VAMORG) - content.icicidirect.comcontent.icicidirect.com/mailimages/IDirect_JubilantLife_Q3FY15.pdf · the CMO business to address USFDA issues, regulatory

February 05, 2015

ICICI Securities Ltd | Retail Equity Research

Result Update

Some green shoots but long way to go… • Revenues were flat YoY at | 1445.2 crore, in line with I-direct

estimates of | 1461.6 crore, due to the extended plant shutdown in the CMO business to address USFDA issues, regulatory changes in advanced intermediates for the China market and delay in getting product approvals from the USFDA

• EBITDA margins declined ~448 bps to 12.8% (I-direct estimate: 9.5%) mainly due to the impact of the CMO business. EBITDA declined 25.8% to | 185.3 crore vs. I-direct estimate of | 138.9 crore

• The company posted a net loss of | 11.2 crore (I-direct estimate of | 8.2 crore loss) on the back of low EBITDA margins and an increase in interest and taxation

Integrated CRAMS player but struggling due to legacy debt burden Jubilant is the largest Indian CRAMS player with a vertically integrated business model. It derives ~50% of sales from CRAMS spread among various business verticals. However, in its pursuit of building capacity and creating multiple revenue heads, the debt situation has not improved over the years. As most of the debt had been US dollar denominated, the sharp INR depreciation over two or three years worsened the debt situation further. Similarly, it has not witnessed meaningful cash flows due to margin pressure. Hence, the D/E and debt/EBITDA ratios have remained at elevated levels. Pharmaceuticals business segment offers potential but lumpy in nature The pharmaceuticals business has grown at ~14% CAGR in FY10-14 driven by generics and specialty pharma. However, pricing pressure in the drug discovery business and some formulations in the US have put consistent pressure on EBITDA margins of the pharma business. Also, expenses at the US based Spoken facility to address the USFDA warning letter and subsequent deferral of shipment have led to further deterioration of financials. Going ahead, resolution of the warning letter and traction in the US generics and API business will be keenly watched. LSI segment mostly commoditised but offers stable returns Life science ingredients (LSI) cater to more routine customers with committed requirements. Because of the commodity nature, margins in this segment are ~15%. The business has grown at a CAGR of ~14% in FY10-14. However, it is more consistent than the pharma segment. Of late, however, even this segment is facing issues due to regulatory changes in China and pricing pressure in some sub-segments. We expect LSI to grow at a CAGR of 7% in FY14-17E to | 3567.5 crore. Overall margin improvement still some distance away; maintain SELL The Q3 performance demonstrated some definite improvement in the margin scenario of the pharma segment. However, cracks are now emerging in the LSI segment keeping overall margins in check. We have already emphasised the importance of overall margin improvement for a company like Jubilant where the deteriorating debt/EBITDA ratio is a major cause for concern. With falling margins and dwindling cash flows, the debt servicing will be a tough task for the company. Our revised target price stands at | 138 based on 5x FY17E EV/EBITDA. We continue to maintain SELL rating on the stock as we wait for improvement in the overall margin scenario for the next few quarters.

Rating matrix Rating : SellTarget : | 138Target Period : 12 monthsPotential Upside : -12%

What’s Changed? Target Changed from | 123 to | 138Adj. EPS FY15E Changed from (| 5.2) to | 9.6EPS FY16E Changed from | 20 to | 12.1EPS FY17E Introducing at | 24.9Rating Unchanged

Quarterly Performance

Q3FY15 Q3FY14 YoY (%) Q2FY15 QoQ (%)Revenue 1,445.5 1,442.8 0.2 1,371.1 5.4EBITDA 185.3 249.6 -25.8 111.0 67.0EBITDA (%) 12.8 17.3 -448 bps 8.1 473 bpsNet Profit -11.2 143.4 PL -94.1 NA

Key Financials (| crore) FY14 FY15E FY16E FY17ERevenues 5803.4 5764.8 6177.5 6939.7EBITDA 1007.6 630.9 850.4 1154.8Net Profit 109.0 -84.9 193.3 396.6EPS (|) 6.8 -5.3 12.1 24.9Adjusted EPS (|) 20.3 9.6 12.1 24.9

Valuation summary

FY14 FY15E FY16E FY17EPE (x) 7.7 16.2 12.9 6.3EV to EBITDA (x) 5.7 6.3 10.0 7.5Tar. EV/EBITDA (x) 5.5 6.1 9.6 7.2Price to book (x) 1.0 0.9 1.0 1.0RoNW (%) 6.1 4.2 -3.5 7.6RoCE (%) 12.1 10.1 4.5 7.6

Stock data ParticularMarket Capitalisation Debt (FY14)Cash (FY14)EV 52 week H/L 222/96Equity capital | 15.9 croreFace value | 1

| 4244 crore| 405 crore

| 6233 crore

Amount| 2393 crore

Price performance (%)

1M 3M 6M 1YJubilant Life Sciences 22.7 21.1 -9.8 29.5Unichem Labs -8.4 5.6 6.4 7.6Divi's Labs -5.3 -8.1 11.0 26.4

Jubilant Life Sciences (VAMORG) | 156

Research Analyst

Siddhant Khandekar [email protected] Mitesh Shah [email protected] Nandan Kamat [email protected]

ICICI Securities Ltd | Retail Equity Research Page 2

Variance analysis Q3FY15 Q3FY15E Q3FY14 Q2FY15 YoY (%) QoQ (%) Comments

Revenue 1,445.5 1,461.6 1,442.8 1,371.1 0.2 5.4 Sequential growth on the back of 14% sequential growth in the pharma segment.

Raw Material Expenses 622.5 643.1 595.3 606.3 4.6 2.7Employee Expenses 271.7 292.3 281.1 271.2 -3.3 0.2Other Expenditure 267.0 292.3 217.7 282.6 22.6 -5.5Power cost 98.9 95.0 99.1 100.1 -0.2 -1.1Total Expenditure 1,260.2 1,322.7 1,193.2 1,260.1 5.6 0.0EBITDA 185.3 138.9 249.6 111.0 -25.8 67.0EBITDA (%) 12.8 9.5 17.3 8.1 -448 bps 473 bps Sequential improvement in margins on account of improvement in pharma

marginsInterest 96.1 70.8 84.6 96.0 13.5 0.1Depreciation 79.5 84.4 73.3 69.2 8.5 14.9Other income 6.1 4.0 5.0 26.4 22.0 -77.1Forex loss / (gain) 0.2 0.0 -10.5 -4.6 LP LPPBT 15.6 -12.4 107.2 -23.1 -85.4 LPTax 20.2 -4.1 -48.8 64.5 LP -68.7PAT before MI -4.6 -8.3 156.0 -87.7 PL NAMI 6.5 -0.1 12.6 6.5 -48.1 1.2Net Profit -11.2 -8.2 143.4 -94.1 PL NAKey MetricsPharmaceuticals 701.0 641.3 675.0 614.3 3.9 14.1 Pharma growth mainly due to robust growth in its radiopharmaceutical and API

segments

Life Science Ingredients 744.0 805.4 767.0 758.8 -3.0 -2.0 Sequential growth flattish due to lower Pyridine offtake due to competition and

regulatory changes in China

Source: Company, ICICIdirect.com Research Change in estimates

(| Crore) Old New % Change Old New % Change CommentsRevenue 5,870.3 5,764.8 -1.8 6,346.1 6,177.5 -2.7EBITDA 544.0 630.9 16.0 1,000.3 850.4 -15.0EBITDA Margin (%) 9.3 10.9 168 bps 15.8 13.8 -200 bps We have cut down FY16 EBITDA margin estimates due to (i) ongoing issues at its

Spokane CMO manufacturing facility and (ii) glaring issues in China for the LSI segment

PAT -103.2 -84.9 -17.7 318.7 193.3 -39.3 PAT reduction in sync with margin reduction and slower reduction in interest cost

EPS (|) -6.5 -5.3 -18.0 20.0 12.1 -39.3

FY15E FY16E

Source: Company, ICICIdirect.com Research Assumptions

CommentsFY13 FY14 FY15E FY16E FY15E FY16E

Pharmaceuticals 2,658.0 2,727.8 2,624.5 2,914.1 2,508.3 2,698.2 We have increased sales estimates for FY16 based on better visibility in the radiopharmaceutical business, normalisation of CMO business operations and launch of new products

Life Science Ingredients 2,503.0 3,076.0 3,127.7 3,251.4 3,335.0 3,635.9 We have cut sales estimates due to hindrances in the Chinese business on the back of changed regulations and anti-dumping duties

Current Earlier

Source: Company, ICICIdirect.com Research


Company Analysis Incorporated in 1978, Jubilant Life Sciences (JLS; formerly Jubilant Organosys), is a mid-sized integrated chemicals turned pharmaceuticals player. It started as a full fledged chemical company by entering the vinyl acetate monomer (VAM) business in 1983. Broadly, the company operates through two business segments- pharmaceuticals (48% of the turnover) and life science ingredients (52% of the turnover). The pharmaceuticals segment consists of sub-segments such as 1) Generics- APIs and formulations, 2) Specialty pharma - radio pharma, allergy therapy products and contract manufacturing (CMO) of sterile injectables, 3) Drug discovery and development solutions. EBITDA margins in the pharmaceuticals segment used to be much higher due to presence of formulations and specialty pharma. The LSI segment consists of sub-segments such as 1) advanced intermediates and specialty Ingredients, 2) nutrition products and 3) life science chemicals. This segment caters to more routine customers with committed requirements. On account of the commodity nature, margins in this segment are relatively low. However, the recent trend suggest the pharma business is struggling on the margins front on account of the warning letter for the US based Spoken facility and the subsequent loss of business besides pricing pressure in some of the APIs and formulations in the US. Jubilant is the largest Indian CRAMS player with a vertically integrated business model. It derives ~50% of sales from CRAMS spread among various business verticals. Overall, we expect revenues to grow at a CAGR of 9.7% in FY14-17E to | 6940 crore with the main drivers as APIs, formulations, specialty pharma and nutrition products. Exhibit 1: Revenues to grow at CAGR of 9.7% in FY14-17E

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The pharmaceuticals business has grown at a CAGR of ~14% in FY10-14 driven by generics and specialty pharma. However, pricing pressure in the drug discovery business and some formulations in the US have put consistent pressure on the EBITDA margins of the pharma business. In addition to this, expenses at the US-based Spoken facility to address the USFDA warning letter and the subsequent deferral of shipment have led to a further deterioration in financials. The management expects an improvement in the margin scenario on the back of the US pipeline (64 filed, 21 launched). We expect the pharma segment to grow at a CAGR of 13% to | 3576.5 crore in FY14-17E.


Exhibit 2: Pharma to witness recovery in FY17E

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Life science ingredients (LSI) cater to more routine customers with committed requirements. On account of the commodity nature, margins in this segment are ~15%. The business has grown at a CAGR of ~14% in FY10-14. However, it is more consistent than the pharma segment. Of late, however, even this segment is facing issues due to regulatory changes in China and pricing pressure in some sub-segments. We expect LSI to grow at a CAGR of 7% in FY14-17E to | 3567.5 crore. Exhibit 3: LSI segment to grow at CAGR of ~14% on back of nutrition products

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Exhibit 4: EBITDA to see improvement in FY17E

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Exhibit 5: Improvement in operating margins to improve net profit but only in FY17E

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Exhibit 6: Trends in return ratios

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Exhibit 7: Trends in quarterly financials (| crore) Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 YoY (%) QoQ (%)Net Sales 1090.5 1171.1 1235.9 1209.6 1301.8 1380.2 1318.0 1424.3 1427.7 1551.6 1460.5 1362.1 1430.3 0.2 5.0OOI 4.7 33.2 4.4 12.6 4.6 13.1 41.2 11.3 15.1 10.7 12.6 9.0 15.2 0.7 69.4Revenues 1095.3 1204.3 1240.3 1222.2 1306.4 1393.3 1359.3 1435.6 1442.8 1562.3 1473.1 1371.1 1445.5 0.2 5.4Raw material cost 398.7 458.7 472.6 456.1 534.8 599.3 581.7 570.2 595.3 694.9 719.2 606.3 622.5 4.6 2.7% of revenues 36.4 38.1 38.1 37.3 40.9 43.0 42.8 39.7 41.3 44.5 48.8 44.2 43.1 181 bps -115 bpsGross Profit 696.6 745.6 767.7 766.1 771.6 794.0 777.6 865.4 847.5 867.4 753.9 764.8 823.0 -2.9 7.6Gross Margins (%) 63.6 61.9 61.9 62.7 59.1 57.0 57.2 60.3 58.7 55.5 51.2 55.8 56.9 -181 bps 115 bpsPower & Fuel cost 77.5 91.2 86.0 85.5 91.8 90.7 91.7 102.5 99.1 96.4 98.9 100.1 98.9 -100.0 -100.0% to revenues 7.1 7.6 6.9 7.0 7.0 6.5 6.7 7.1 6.9 6.2 6.7 7.3 6.8 -3 bps -46 bpsEmployee cost 228.2 212.4 231.4 244.0 238.3 248.8 256.1 284.3 281.1 283.7 272.2 271.2 271.7 -3.3 0.2% to revenues 20.8 17.6 18.7 20.0 18.2 17.9 18.8 19.8 19.5 18.2 18.5 19.8 18.8 -68 bps -98 bpsOther expenditure 182.3 198.3 176.6 161.2 181.6 222.5 191.9 207.7 217.7 241.5 237.2 282.6 267.0 22.6 -5.5% to revenues 16.6 16.5 14.2 13.2 13.9 16.0 14.1 14.5 15.1 15.5 16.1 20.6 18.5 338 bps -214 bpsTotal Expenditure 886.6 960.6 966.6 946.9 1046.6 1161.3 1121.4 1164.7 1193.2 1316.5 1327.6 1260.1 1260.2 5.6 0.0% to revenues 80.9 79.8 77.9 77.5 80.1 83.3 82.5 81.1 82.7 84.3 90.1 91.9 87.2 448 bps -473 bpsEBITDA 208.7 243.7 273.7 275.4 259.8 232.0 237.9 270.9 249.6 245.8 145.5 111.0 185.3 -25.8 67.0EBITDA Margins (%) 19.1 20.2 22.1 22.5 19.9 16.7 17.5 18.9 17.3 15.7 9.9 8.1 12.8 -448 bps 473 bpsDepreciation 53.9 66.2 59.1 62.0 63.2 69.5 68.2 71.0 73.3 68.7 73.1 69.2 79.5 8.5 14.9Interest cost 56.9 58.6 59.3 70.1 54.4 71.4 80.4 82.1 84.6 75.0 77.9 96.0 96.1 13.5 0.1Other income 3.5 4.7 3.1 3.5 3.6 5.2 6.0 4.8 5.0 5.0 4.2 26.4 6.1 22.0 -77.1PBT before EO 101.4 123.7 158.3 146.7 145.9 96.3 95.3 122.6 96.7 107.2 -1.3 -27.8 15.8 -83.7 -156.9EO -155.5 -146.4 -104.2 47.1 -71.0 -77.9 -111.2 -150.2 10.5 36.4 -18.7 4.6 -0.2PBT after EO -54.1 -22.7 54.1 193.8 74.9 18.4 -15.9 -27.7 107.2 143.6 -20.0 -23.1 15.6 -85.4 -167.5Tax 8.9 35.1 38.9 35.3 35.4 42.9 31.4 51.8 -48.8 35.2 -29.3 64.5 20.2 NP -68.7Tax Rate (%) -16.4 -154.5 71.8 18.2 47.2 232.6 -198.2 -187.3 -45.5 24.5 147.0 -279.1 129.6 NP NPPAT -63.0 -57.8 15.2 158.5 39.5 -24.4 -47.3 -79.5 156.0 108.4 9.4 -87.7 -4.6 PN -94.7MI 15.4 5.7 10.2 6.5 12.8 6.5 5.3 1.1 12.6 9.6 4.6 6.5 6.5 -48.1 1.2Net Profit -78.4 -63.5 5.0 152.0 26.7 -31.0 -52.6 -80.6 143.4 98.8 4.8 -94.1 -11.2 PN -88.1EPS (|) -4.9 -4.0 0.3 9.5 1.7 -1.9 -3.3 -5.1 9.0 6.2 0.3 -5.9 -0.7


SWOT Analysis Strengths - Vertically integrated model. Proven capabilities in the CRAMS space Weakness - Too many revenue heads, struggling to cope up with margin pressure and above all a huge debt burden. Commoditised nature of the LSI segment Opportunities - The US Generics space. Incremental CRAMS orders Threats - Leverage ratios are at alarming levels. It is already under the USFDA scanner. The LSI business is witnessing headwinds in China


Conference call highlights

• There were one-off expenses for the CMO business of | 53 crore and | 105 crore in 9MFY15. It expects this expense to be incurred (albeit at a lower scale) till Q4FY15

• The company expects its Symtet business to reach break even level in FY16. It expects a loss of | 35-40 crore from this business in FY15

• Jubilant’s capacity utilisation for Symtet is 15% till Q2FY15, which the company expects to increase to 30-40% in FY16

• In the US, the company has launched gDiovan and started Aripiprazole (Abilify) finished dosage supply to the partner. It expects to launch gCellcept and gMaxalt in Q1FY16 and Q2FY16, respectively. The company expects to launch RubyFill via 505(b)(2) in Q1FY17.

• It has guided at | 250 crore of capex for FY16 • The company plans to list its pharmaceutical business in the next

two years. Listing has been deferred due to problems at the Spokane facility

• Jubilant has commercialised 37 APIs including 19 in North America, 24 in Europe and 26 in RoW markets. It has filed four products in Q3FY15, including one in Japan & three filings in RoW

• New products launched during the quarter include Zolmitriptan ODT, Irbesartan, Amlodipine in Canada and many others in Emerging markets like APAC, ME, Africa, etc

• The company has 37 pending ANDAs till date and has received approval for four products. It has also received approval for eight products globally. It has filed 21 filings during the quarter in RoW


Valuation The Q3 performance demonstrated some definite improvement in the margin scenario of the pharma segment. However, cracks are now emerging in the LSI segment keeping overall margins under check. We have already emphasised the importance of overall margin improvement for a company like Jubilant where the deteriorating debt/EBITDA ratio is a major cause for concern. With falling margins and dwindling cash flows, debt servicing will be a tough task for the company. Our revised target price stands at | 138 based on 5x FY17E EV/EBITDA. We continue to maintain SELL rating on the stock as we await an improvement in the overall margin scenario for the next few quarters. Exhibit 8: One year forward PE

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Exhibit 10: Valuation

Revenues Growth Adj. EPS Growth P/E EV/EBITDA RoNW RoCE(| crore) (%) (|) (%) (x) (X) (%) (%)

FY14 5803 12.4 20.3 -14 7.6 6.3 4.2 10.1FY15E 5765 -0.7 9.6 -53 16.1 10.0 -3.5 4.5FY16E 6177 7.2 12.1 26 12.8 7.5 7.6 7.6FY17E 6940 12.3 24.9 105 6.2 5.2 14.2 11.7



Company snapshot

Target Price:138.00

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Source: Bloomberg, Company, ICICIdirect.com Research Key events Date EventMay-11 Repays FCCB debt worth US$202 million including yield to maturity of US$60 million

Feb-13 Receives warning letter from USFDA for its Montreal facility

Jul-13 China imposes anti dumping duty margin of 24.6% to 57.4% for Pyridine imported from India

Dec-13 USFDA issues warning letter for Spokane facility

Feb-14 Jubilant receives establishment inspection report from USFDA for its Montreal facility

Mar-14 Sells hospitals business to Narayana Health for | 45 crore

May-14 IFC grants loan of US$200 million to company’s wholly-owned subsidiary Jubilant Pharma

Source: Company, ICICIdirect.com Research Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing date % O/S Position (m) Change (m)1 Jubilant Stock Holding Pvt. Ltd. 31-Dec-14 18.63 29.7 0.02 Jubilant Capital Pvt. Ltd. 31-Dec-14 13.19 21.0 0.03 Jubilant Securities Pvt. Ltd. 31-Dec-14 11.74 18.7 0.04 General Atlantic LLC 31-Dec-14 7.14 11.4 0.05 Samena Capital Management LLP 31-Dec-14 4.79 7.6 0.06 Vam Holdings, Ltd. 31-Dec-14 3.57 5.7 0.07 Jubilant Employees Welfare Trust 31-Dec-14 3.03 4.8 0.08 Norges Bank Investment Management (NBIM) 31-Dec-14 2.21 3.5 0.09 Nikita Resources Pvt. Ltd. 31-Dec-14 2.20 3.5 0.010 Gothic Corporation 31-Dec-14 1.70 2.7 0.9

(in %) Dec-13 Mar-14 Jun-14 Sep-14 Dec-14Promoter 54.0 54.0 54.0 54.0 54.0FII 24.9 24.7 24.6 22.4 22.6DII 1.6 2.2 3.0 2.1 0.8Others 19.6 19.2 18.4 21.5 22.2

Source: Reuters, ICICIdirect.com Research Recent Activity

Investor name Value Shares Investor name Value SharesGothic Corporation 1.81m 0.94m Birla Sun Life Asset Management Company Ltd. -3.93m -2.04m Dimensional Fund Advisors, L.P. 0.34m 0.18m 1832 Asset Management L.P. -2.30m -1.67m Bang (Shyamsundar) 0.12m 0.06m DSP BlackRock Investment Managers Pvt. Ltd. -2.14m -0.83m Danske Invest Management Company S.A. 0.06m 0.03m Canara Robeco Asset Management Company Ltd. -1.19m -0.43m

Principal PNB Asset Management Company Ltd. -0.67m -0.24m

Investor name Investor name

Source: Reuters, ICICIdirect.com Research


.

Financial summary

Profit and loss statement | Crore (Year-end March) FY14 FY15E FY16E FY17ERevenues 5,803.4 5,764.8 6,177.5 6,939.7Growth (%) 12.4 -0.7 7.2 12.3Raw Material Expenses 2,442.1 2,583.3 2,602.0 2,723.6Employee Expenses 1,105.2 1,092.4 1,161.3 1,304.6Selling & General Exp 858.8 1,059.3 1,141.1 1,281.9Stores & Packaging cost 0.0 0.0 0.0 0.0Manufacturing exp 0.0 0.0 0.0 0.0Power cost 389.7 398.8 422.7 474.9Total Operating Expenditure 4,795.8 5,133.8 5,327.1 5,784.9EBITDA 1,007.6 630.9 850.4 1,154.8Growth (%) -2.2 -37.4 34.8 35.8Depreciation 281.2 317.1 326.3 333.2Interest 323.7 344.2 248.6 239.6Other Income 19.1 40.6 16.0 16.0PBT before EO 421.8 10.2 291.5 598.0Exceptional items 214.5 14.2 0.0 0.0Total Tax 69.6 63.2 96.2 197.3MI 28.6 17.8 2.0 4.0PAT 109.0 -84.9 193.3 396.6Growth (%) -28.6 -177.9 -327.6 105.2Adjusted PAT 323.5 153.3 193.3 396.6EPS (|) 6.8 -5.3 12.1 24.9


Cash flow statement | Crore (Year-end March) FY14 FY15E FY16E FY17EProfit after Tax 109.0 -84.9 193.3 396.6Add: Depreciation 281.2 317.1 326.3 333.2(Inc)/dec in Current Assets -147.4 -61.2 -374.4 -339.4Inc/(dec) in CL and Provisions -258.4 110.0 -25.1 153.3CF from operating activities -15.6 281.0 120.0 543.8Other Investments -8 -10.0 -10 -10(Purchase)/Sale of FA -448 -200.0 -150 -125Deferred Tax Liability -37 0 0 0Minority Interest 46 47.8 22.0 19.0Others -16 200 200 200CF from investing activities -487.2 -112.2 -88.0 -66.0Inc/(Dec) in Equity Capital -0.5 0.0 0.0 0.0Inc / (Dec) in Sec Loan 261.7 -100.0 -100.0 -100.0Inc / (Dec) in Unsec. Loan 341.5 -50.0 0.0 -50.0Dividend & Dividend tax -54.5 -93.2 -111.8 -130.5Inc/(dec) in Sec Pre Account -57.8 0.0 0.0 0.0Exchange Rate Fluctuation 162.0 0.0 0.0 0.0Adjustment in P & L 6.5 0.0 0.0 0.0CF from financing activities 626.3 -243.2 -211.8 -280.5Net Cash flow 123.4 -74.4 -179.8 197.3Opening Cash 356.0 479.5 405.0 225.2Closing Cash 479.5 405.0 225.2 422.5


Balance sheet | Crore (Year-end March) FY14 FY15E FY16E FY17EEquity Capital 15.4 15.4 15.4 15.4Reserve and Surplus 2,611.0 2,432.9 2,514.4 2,780.6Total Shareholders funds 2,626.5 2,448.4 2,529.9 2,796.0Total Debt 4,394.0 4,244.0 4,144.0 3,994.0Deferred Tax Liability 237.1 237.1 237.1 237.1Minority Interest 157.9 205.7 227.6 246.7Other Non CL & LT Provisions 231.002 331.002 431.002 531.002Total Liabilities 7,646.5 7,466.2 7,569.6 7,804.8Gross Block 4,902.9 5,063.8 5,163.8 5,238.8Acc. Depreciation 1,782.2 2,039.4 2,303.3 2,571.7Net Block 3,120.7 3,024.4 2,860.5 2,667.1CWIP 110.8 100.0 100.0 100.0Total Fixed Assets 3,231.6 3,124.4 2,960.5 2,767.1Net Intangible Assets 2,339.6 2,329.6 2,317.2 2,302.4Other Investments 34.0 44.0 54.0 64.0Inventory 1,341.4 1,162.9 1,539.8 1,497.0Debtors 805.9 813.9 878.4 987.0Loans and Advances 214.5 356.8 358.4 528.4Cash 479.5 405.0 225.2 422.5Other current Assets 86.8 176.0 107.6 211.1Total Current Assets 2,928.0 2,914.7 3,109.3 3,646.0Creditors 718.1 782.6 844.6 949.0Provisions 254.0 234.8 168.9 123.4Other Current Liabilities 241.9 306.6 285.3 379.8Total Current Liabilities 1,214.0 1,323.9 1,298.8 1,452.1Net Current Assets 1,714.0 1,590.7 1,810.5 2,193.8Deffered Tax Assets 0.0 0.0 0.0 0.0LT L & A, Other Non CA 327.4 377.4 427.4 477.4Application of Funds 7,646.5 7,466.1 7,569.6 7,804.8


Key ratios (Year-end March) FY14 FY15E FY16E FY17EPer share data (|)EPS 6.8 -5.3 12.1 24.9Adjusted EPS 20.3 9.6 12.1 24.9Cash EPS 24.5 14.6 32.6 45.8BV 164.9 153.7 158.8 175.5DPS 2.9 5.0 6.0 7.0Cash Per Share 30.1 25.4 14.1 26.5Operating Ratios (%)EBITDA margins 17.4 10.9 13.8 16.6PBT margins 3.6 -0.1 4.7 8.6Net Profit margins 1.9 -1.5 3.1 5.7Inventory days 78.3 80.0 80.0 80.0Debtor days 51.4 52.0 52.0 52.0Creditor days 45.8 50.0 50.0 50.0Return Ratios (%)RoE 4.2 -3.5 7.6 14.2RoCE 10.1 4.5 7.6 11.7RoIC 10.3 4.5 7.2 11.3Valuation Ratios (x)P/E 22.7 0.0 12.8 6.2EV / EBITDA 6.3 10.0 7.5 5.2EV / Revenues 1.1 1.1 1.0 0.9Market Cap / Revenues 0.4 0.4 0.4 0.4Price to Book Value 0.9 1.0 1.0 0.9Solvency RatiosDebt / Equity 1.7 1.7 1.6 1.4Debt/EBITDA 4.4 6.7 4.9 3.5Current Ratio 2.4 2.2 2.4 2.5Quick Ratio 2.0 1.9 2.2 2.2



ICICIdirect.com coverage universe (Healthcare) ICICIdirect Healthcare coverage Universe

I-Direct CMP TP Rating M CapCode (|) (|) (| Cr) FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E

Ajanta Pharma AJAPHA 2461 3220 BUY 8692.6 66.2 75.0 85.6 37.2 32.8 28.8 23.6 20.6 17.0 44.9 40.6 38.1 39.4 32.8 28.9

Apollo Hospitals APOHOS 1310 1075 HOLD 18291.3 22.8 27.5 35.1 57.5 47.7 37.3 28.6 24.4 18.6 11.6 12.7 14.9 10.6 11.8 13.6

Aurobindo Pharma AURPHA 1210 1111 HOLD 35442.6 47.3 51.8 59.7 25.6 23.4 20.3 19.7 20.1 13.2 24.1 25.7 25.9 31.3 29.4 26.0

Biocon BIOCON 427.3 410 HOLD 8580.2 20.7 20.0 22.6 20.7 21.4 18.9 12.7 12.7 11.2 13.4 11.6 12.9 13.7 12.3 12.9

Cadila Healthcare CADHEA 1524 1538 HOLD 31321.2 39.2 51.1 66.2 38.8 29.8 23.0 27.8 20.8 16.2 15.9 19.0 21.7 23.4 24.6 25.4

Cipla CIPLA 678 585 HOLD 54658.4 17.3 15.9 21.7 39.2 42.6 31.2 26.0 23.5 18.9 15.5 14.8 17.2 13.8 11.5 13.7

Divi's Laboratories DIVLAB 1636 1633 HOLD 21802.8 56.0 62.4 81.7 29.2 26.2 20.0 21.4 18.1 15.1 29.6 28.1 29.7 26.1 23.2 25.1

Dr Reddy's Labs DRREDD 3237 3332 HOLD 52975.8 126.7 128.3 151.0 24.4 24.1 20.5 16.0 14.8 13.0 19.2 18.7 20.1 23.7 19.9 19.5

Glenmark Pharma GLEPHA 730.1 775 HOLD 19884.3 20.0 28.0 33.4 36.5 26.1 21.8 17.1 15.1 11.8 16.0 21.0 22.7 18.3 21.8 22.2

Indoco Remedies INDREM 325.4 375 BUY 3010.6 6.3 9.5 13.3 51.8 34.3 24.4 25.5 17.4 13.4 16.6 21.8 28.1 12.6 16.4 19.4

Ipca Laboratories IPCLAB 627.5 655 HOLD 7950.7 37.9 40.5 50.7 16.5 15.5 12.4 10.5 10.2 9.7 27.6 23.1 24.7 24.4 21.4 21.7

Jubilant Life Sciences VAMORG 156.4 138 SELL 2500.3 6.8 -5.3 12.1 22.8 -29.3 12.9 6.4 10.0 7.5 10.1 4.5 7.6 4.2 -3.5 7.6

Lupin LUPIN 1580 1866 BUY 71246.7 41.0 54.4 61.0 38.6 29.0 25.9 24.5 18.6 16.8 34.5 34.7 32.0 26.5 27.4 24.6

Sun Pharma SUNPHA 959 1036 BUY 199408.3 29.0 34.8 39.9 33.0 27.5 24.1 20.4 19.7 16.8 32.4 31.2 28.8 27.0 25.3 23.1

Torrent Pharma TORPHA 1125 1165 HOLD 19111.1 39.2 47.2 50.4 28.7 23.8 22.3 20.3 18.1 14.5 28.5 21.4 26.7 34.9 32.4 28.0

Unichem Laboratories UNILAB 221 206 HOLD 2009.6 18.7 6.4 13.2 11.8 34.7 16.7 11.2 18.5 11.4 15.7 6.5 12.8 20.7 7.1 14.0

RoNW (%)Company

EPS (|) PE(x) EV/EBITDA (x) RoCE (%)



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Documents

Jubilant Life Sciences (VAMORG) - content.icicidirect.comcontent.icicidirect.com/mailimages/IDirect_JubilantLife_Q3FY15.pdf · the CMO business to address USFDA issues, regulatory