JB Chemicals looks to double revenue with expansion in the domestic market

JB Chemicals and Pharmaceuticals Ltd is experiencing significant growth in the domestic market through strategic acquisitions and a focus on expanding its Contract Development and Manufacturing Organisation (CDMO) business.

In a recent conference call, JB Chem’s management outlined its strategic vision aimed at strengthening its position in key market segments. The company’s emphasis on acquisitions and the expansion of its CDMO segment has boosted its domestic revenue share, reaching 54.4% in FY24. This surge can be attributed to effective brand management and successful acquisitions, notably in the ophthalmology segment, as per the company.

Abdulkader Puranwala, an analyst at ICICI Securities, highlighted JB Chem’s plans to double the revenue of its Contract Manufacturing Operations (CMO) business from $50 million to $100 million in the coming years. Puranwala also noted the company’s strategic shift towards high-margin segments, expecting revenue contributions from India and CMO businesses to rise from 67% to 75%.

Another report from SMIFS Limited underlined JB Chem’s growth trajectory in India, driven by market share gains, increased prescriptions, and strategic acquisitions. The company’s focus on expanding within existing therapies has further propelled revenue growth. Analysts have said that JB Chemicals CDMO business, with a capacity to manufacture 2 billion (Rs 200 crore) lozenges annually, is set for significant growth, doubling revenue from $50 million to $100 million in the next five years.

Analysts have projected a continued growth in revenue and margins, supported by the company's strategic initiatives and expansion plans in high-margin segments. In FY24, JB Pharma reported an 11% year-on-year (Y-o-Y) increase in revenue to Rs 3,484 crore and a 35% increase in profit after tax (PAT) to Rs 553 crore. EBITDA also rose by 23% to Rs 939 crore.

For FY24, domestic business revenue grew by 16% Y-o-Y to Rs 1,897 crore. Excluding the ophthalmology portfolio, JB Pharma’s YoY growth was 11%. Despite a decline in Azmarda sales, the chronic business segment grew by 14%. Franchises like Cilacar, Metrogyl, and Sporlac contributed to the overall performance.

Azmarda and Cilacar are used for managing high blood pressure and certain types of chronic heart failure. Cilacar, another blood pressure medication, contains Cilnidipine, a calcium channel blocker that relaxes blood vessels. Metrogyl is an antibiotic effective against bacterial and parasitic infections, containing Metronidazole. Sporlac is a probiotic supplement.

For FY24, international business revenue grew by 5% to Rs 1,587 crore. Excluding South Africa, international business grew by 12% Y-o-Y. The international formulations business grew by 6% to Rs 1,069 crore. The CDMO business exceeded Rs 400 crore in revenue, accounting for 27% of the total international business. However, the API business revenue declined due to lower demand, totalling Rs 86 crore compared to Rs 94 crore in the previous financial year.