Jupiter Bioscience - Rs 165.00
Established in 1985, Jupiter Bioscience Ltd (JBL) is a reputed pharmaceutical company specializing in niche areas of peptides, advanced organic chemistry, chiral chemistry, and biotechnology. Infact it ranks among global top 10 players in the peptide chemistry and the only one in India with a distinction of integrated model of peptide pharmaceuticals. Along with its subsidiaries, company is an end to end peptide solution provider covering the entire spectrum from key peptide raw materials to finished formulation. It manufactures 14 categories of peptide reagents, 6 variety of coupling reagents and more than 100 varieties of protected amino acids. Broadly, company has segmented its product profile in three groups namely ‘Peptide raw material’, ‘Drug Intermediaries’ and ‘Special & fine chemicals’ with around 50% revenue coming from the first and other 50% from the rest two divisions. In future, 65% of revenue is expected to come from peptides alone.
Presently JBL is having three manufacturing facilities – one in Karnataka (Bidar) and two in Andhra Pradesh (Cheriyal & Medak) with a combined installed capacity of 372 TPA. Against this its actual production is around 175~200 tonnes representing nearly 50% capacity utilization. This means it can easily double its topline without any capital expenditure. Besides, JBL has set up two wholly owned subsidiaries to cater the higher segment of peptide value chain. Notably, till March’06 JBL has already invested whopping 55 cr in these subsidiaries. For specially catering to the regulated market like USA, Europe, Japan etc, its US subsidiary is setting up FDA approved facility in Maryland for the manufacture of custom peptides, clinical peptides and peptide-based generic active pharmaceutical ingredients (APIs). It will start commercial operation from this fiscal. On the other hand its Indian subsidiary namely Sven Genetech is mainly into the business of development of process capabilities for several products that are pre-cursors to new generation drugs in the fields of AIDS treatment, Cardiology, Oncology, Immunology, Endocrinology, vaccines and others.
After a co-opearation agreement with Clariant group last year, JBL has recently entered a 10 year product purchase agreement with Ranbaxy to leverage the latter's vast global market reach and put the company's upcoming peptide products on a fast-track. Accordingly Ranbaxy is taking 15% stake and will be investing nearly 50 cr in the company thru preferential allotment of 31.77 lac warrants to be converted @ 147 Rs per share. Moreover, last month JBL also raised 100 cr thru QIP route by placement of approx 65 lac shares @ 153, basically to fund the growth plan of both its subsidiaries. Importantly, till now JBL has been investing and creating facilities for its subsidiaries although they have still not started contributing to topline or bottomline significantly. So once the subsidiaries start working at optimum level, they will give a huge fillip to company’s financials. Even on a standalone basis its fundamentals are quite strong with operating margin in the range of 45-50%. For FY07 its sales improved by 30% to 104 cr and PAT increased by 50% to 25 cr. Considering its Q4 performance and recent tie up with Ranbaxy, it can clock a turnover of 180 cr and PAT of 45 cr for FY08. This translates into standalone EPS of 21 Rs on fully diluted equity of 21.32 cr. Despite company having a debt of more than 100 cr and miscellaneous expenditure to the tune of 60 cr on a consolidated basis, investors can buy at current levels as scrip can appreciate 50% in 9~12 months.
Presently JBL is having three manufacturing facilities – one in Karnataka (Bidar) and two in Andhra Pradesh (Cheriyal & Medak) with a combined installed capacity of 372 TPA. Against this its actual production is around 175~200 tonnes representing nearly 50% capacity utilization. This means it can easily double its topline without any capital expenditure. Besides, JBL has set up two wholly owned subsidiaries to cater the higher segment of peptide value chain. Notably, till March’06 JBL has already invested whopping 55 cr in these subsidiaries. For specially catering to the regulated market like USA, Europe, Japan etc, its US subsidiary is setting up FDA approved facility in Maryland for the manufacture of custom peptides, clinical peptides and peptide-based generic active pharmaceutical ingredients (APIs). It will start commercial operation from this fiscal. On the other hand its Indian subsidiary namely Sven Genetech is mainly into the business of development of process capabilities for several products that are pre-cursors to new generation drugs in the fields of AIDS treatment, Cardiology, Oncology, Immunology, Endocrinology, vaccines and others.
After a co-opearation agreement with Clariant group last year, JBL has recently entered a 10 year product purchase agreement with Ranbaxy to leverage the latter's vast global market reach and put the company's upcoming peptide products on a fast-track. Accordingly Ranbaxy is taking 15% stake and will be investing nearly 50 cr in the company thru preferential allotment of 31.77 lac warrants to be converted @ 147 Rs per share. Moreover, last month JBL also raised 100 cr thru QIP route by placement of approx 65 lac shares @ 153, basically to fund the growth plan of both its subsidiaries. Importantly, till now JBL has been investing and creating facilities for its subsidiaries although they have still not started contributing to topline or bottomline significantly. So once the subsidiaries start working at optimum level, they will give a huge fillip to company’s financials. Even on a standalone basis its fundamentals are quite strong with operating margin in the range of 45-50%. For FY07 its sales improved by 30% to 104 cr and PAT increased by 50% to 25 cr. Considering its Q4 performance and recent tie up with Ranbaxy, it can clock a turnover of 180 cr and PAT of 45 cr for FY08. This translates into standalone EPS of 21 Rs on fully diluted equity of 21.32 cr. Despite company having a debt of more than 100 cr and miscellaneous expenditure to the tune of 60 cr on a consolidated basis, investors can buy at current levels as scrip can appreciate 50% in 9~12 months.
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