JBCHEPHARM - J B Chemicals &

📊 NSE: JBCHEPHARM 🏢 Pharmaceuticals - Indian - Bulk Drugs & Formln 📅 Last Updated: 12/14/2025 8:30

💰 Financial Performance

Revenue Growth by Segment

Overall revenue grew 8% YoY to INR 1,085 Cr in Q2 FY26. Domestic formulations grew 9% to INR 644 Cr. The CDMO segment reported robust growth of 20% to INR 113 Cr, while International Formulations grew 2% to INR 306 Cr. For the first nine months of fiscal 2025, revenue grew 13% to INR 2,969 Cr.

Geographic Revenue Split

The revenue mix for H1 FY26 was 61% Domestic and 39% International, compared to a 59%/41% split in H1 FY25. International markets include Russia (strong growth), USA, UK, South Africa, Australia, Canada, Africa, South-east Asia, and the Middle East.

Profitability Margins

Gross margins improved by 200 bps to 68.2% in Q2 FY26 from 66.2% YoY, driven by a favorable product mix and price growth. Net profit grew 19% YoY to INR 208 Cr. Operating margins are expected to remain healthy at 26-28% over the medium term.

EBITDA Margin

Operating EBITDA margin (excluding non-cash ESOP) was 29.4% in Q2 FY26, up 100 bps from 28.4% YoY. Operating EBITDA reached INR 319 Cr, a 12% increase, reflecting strong emphasis on cost discipline and execution excellence.

Capital Expenditure

The company plans an annual organic maintenance capex of ~INR 100 Cr. Net capex addition for H1 FY26 was INR 46 Cr compared to INR 49 Cr in H1 FY25. A significant cash consideration of $116 million (approx. INR 970 Cr) is due to Novartis by December 31, 2026, for a Trademark License Agreement.

Credit Rating & Borrowing

The company maintains a healthy financial risk profile with an adjusted gearing of 0.01 times as of March 31, 2025. Gross debt was reduced to INR 7 Cr as of September 30, 2025, from INR 14 Cr in March 2025. Interest coverage ratios are exceptionally high at over 80 times.

⚙️ Operational Drivers

Raw Materials

Active Pharmaceutical Ingredients (APIs) are the primary raw materials. While specific cost percentages per API are not disclosed, the company noted anticipated increases in API costs, leading to strategic inventory building.

Import Sources

Not specifically disclosed in the documents, though the company operates manufacturing units in Ankleshwar and exports to regulated markets like the US and Europe.

Capacity Expansion

Planned organic capex of ~INR 100 Cr annually is focused on maintenance and efficiency. The company is also integrating the acquired ophthalmology portfolio, which is expected to trigger a perpetual license in December 2026.

Raw Material Costs

Raw material costs are managed through cost-optimization efforts and strategic inventory management. Gross margins of 68.2% suggest raw material and direct production costs represent approximately 31.8% of revenue.

Manufacturing Efficiency

Efficiency is driven by a focus on 'progressive' portfolios (65-70% of presence) and chronic therapies. The company is a top 5 global CDMO for lozenges, benefiting from high-standard global approvals.

📈 Strategic Growth

Expected Growth Rate

11-13%

Growth Strategy

Growth will be driven by outperforming the Indian Pharma Market (IPM) with a target of 12-14% domestic growth, ramping up the CDMO business (which grew 20% in Q2 FY26), and leveraging past acquisitions like Sanzyme, Azmarda, and Razel. The company also expects a significant margin boost from the ophthalmology portfolio starting in 2027.

Products & Services

The company sells pharmaceutical formulations (tablets, capsules, injectables), lozenges, and Active Pharmaceutical Ingredients (APIs). Key therapeutic areas include chronic, progressive, and ophthalmology portfolios.

Brand Portfolio

Razel (Cardiovascular), Azmarda (Heart failure), Sanzyme (Probiotics), and various brands acquired from Dr. Reddy’s and Novartis.

New Products/Services

New product launches and the ramp-up of the recently acquired ophthalmology portfolio are expected to be major contributors. The ophthalmology segment is projected to provide a significant gross margin improvement from CY 2027 onwards.

Market Expansion

Focusing on the 'progressive' portfolio (65-70% of current business) and expanding the CDMO lozenges business globally. Russia remains a key growth market in the international segment.

Market Share & Ranking

Ranked 20th in chronic therapies as of Dec 2024 (up from 25th). It is the fastest-growing company among the top 25 in the Indian Pharmaceutical Market (IPM).

Strategic Alliances

Trademark License Agreement with Novartis Switzerland for the ophthalmology portfolio; strategic acquisitions from Sanzyme Pvt Ltd and Dr. Reddy’s Laboratories.

🌍 External Factors

Industry Trends

The Indian Pharma Market (IPM) is growing at 8%, while JB Pharma is growing at 12%, indicating a shift toward high-growth chronic and progressive therapies. The CDMO sector for specialized forms like lozenges is expanding globally.

Competitive Landscape

Faces intense competition from other large Indian pharma players and global generic manufacturers. Competitors include the top 25 companies in the IPM.

Competitive Moat

Moat is built on a top 5 global position in lozenges CDMO, strong brand equity in chronic therapies (Razel, Azmarda), and a high-margin 'progressive' portfolio. These are sustainable due to high regulatory barriers and established physician trust.

Macro Economic Sensitivity

Sensitive to domestic healthcare regulatory changes and pricing controls. Domestic growth of 12% vs IPM growth of 8% shows high resilience to general market trends.

Consumer Behavior

Shift toward chronic disease management and preventive healthcare is driving demand for the company's cardiovascular and probiotic portfolios.

Geopolitical Risks

Exposure to the Russian market, which showed strong growth in Q2 FY26, carries inherent geopolitical risk. Trade barriers in regulated markets (US/Europe) could also impact the CDMO business.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent manufacturing standards from global regulators (US FDA, Europe) for its CDMO business and domestic pricing controls for formulations.

Legal Contingencies

The company is managing a non-cash ESOP charge with a remaining balance of approximately INR 47 Cr. No specific court cases or values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

The potential acquisition of a stake in JBCPL by Torrent Pharmaceuticals is a key monitorable factor that could lead to management changes and impact strategic direction.