Jupiter Bioscience Ltd - Rs126.00

Jupiter Bioscience Limited (JBL) was promoted as a Private Limited Company in 1985 by a visionary scientist, the Late K. S. Sharma who expired last year, and was converted into a Public Limited Company in 1992. Initially, it was into manufacturing of bulk drugs & chemicals but is today among the few companies in the world with its core competence in peptide chemistry, organic chemistry, chiral chemistry and biotechnology. In fact, JBL was the first company in Asia to introduce and commercialise molecules based on peptide chemistry. The company has no competitors in Asia and faces competition only from European and American companies. Its customers include major global players like Dupont, PPG (USA), Bachem and Sigma Aldrich and leading trading houses like Siber Hegner, Schwieizer Hall (Switzerland) etc. apart from marketing agents like Eurolabs and other Institutions and universities. It also supplies products to MNCs like Pfizer, Eli Lilly, Abbot Laboratories and the Monsanto Group.

JBL has two manufacturing facilities - one at Bidar in Karnataka and the other at Cheriyal in Medak District in Andhra Pradesh which is a 100% EOU. It has three specialised product lines viz. Peptide reagents and protected amino acids, Drug intermediates & Speciality Chemicals as well as fine chemicals. New generation medicines, diagnostics and vaccines are based on Peptide Chemistry with major focus on different branches of Medicine like Neurology, Cardiology, Immunology, Oncology (Cancer related), HIV /AIDS, Autoimmune diseases etc. JBL has successfully launched peptide precursors, the essential raw material for these generic peptide drugs.. With various drugs expected to go off patent, Jupiter Bio can grow by leaps and bound in the years to come.

The company has also formed a wholly owned subsidiary, Sven Genetech Ltd. for R & D with a state-of-the-art research lab in line with International GLP standards and equipped with modern instrumentation. It is looking towards moving up the value chain to commercialise and introduce generic peptide drugs such as Oxytocin, Vasopressin, Desmopressin, Leuprolide, Lisinopril and Calcitonin in the domestic and international markets. It has already launched various finished formulations in the domestic market. It is very strong not only in basic R&D but also in Process Development, which is the current global trend for every corporate and Research entity in the Pharmaceutical and Biotech fields.

To increase it global presence, JBL is agressively participating in exhibitions, fairs and trade shows all over the world. It has even promoted Jupiter Bioscience Inc. in USA to enhance its presence in peptides and peptide based drugs business in the global market and to set up manufacturing facilities for peptide based bulk actives. Recently, it entered into a general cooperation agreement with a Clariant Pharmaceutical Fine Chemicals of Germany to leverage the strengths of both companies in view of the interest shown by the global pharmaceutical industry for peptide based products

Fundamentally, the company is strong with higher operating margins compared to its peers and has huge reserves of more than Rs85 cr. on its small equity of Rs9 cr. Moreover it has invested Rs.25.06 cr. in its subsidiary Sven Genetech Ltd. Its debt equity ratio is also low at 0.53. For the nine months ended 31 Dec. 2004, its net sales grew by 9% to Rs50 cr. and NP by 10% to Rs13 cr. For full year FY05, it is expected to post Sales of Rs70 cr. and NP of Rs18 cr. i.e. EPS of Rs20. In FY06, its sales can cross Rs100 cr. and EPS may touch Rs.28. Its consolidated numbers will be much better. Considering the huge growth potential and the current valuation this scrip, JBL can be a multi-bagger in the long run. It is a screaming buy at CMP and investors should not be surprised if it touches Rs500 if held for 2~3 years.