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Jubilant Pharmova Ltd - Company Analysis

Jubilant Pharmova Ltd is a pharmaceutical company that operates in three segments: specialty pharmaceuticals, contract research and development services, and proprietary novel drugs. The company was formerly known as Jubilant Life Sciences Limited and changed its name to Jubilant Pharmova Limited in February 2021.


In this blog post, we will analyze the company's share price, financials and stock performance using data from various sources.


Share Price


As of 09-May-2023, the company's share price on NSE was ₹323.85, down by 3.88% from the previous close of ₹311.75. The company has a market capitalization of ₹5,165 Cr and a 52-week low/high of ₹268.8/₹441.


The company's share price has underperformed the S&P BSE Healthcare and S&P BSE Small Cap indices in the past year, falling by 25.09% compared to 1.62% and 8.31% gains for the respective indices.


The company's share price has also underperformed its peers in the pharmaceuticals and drugs sector, such as Divi's Laboratories Ltd, Dr Reddy's Laboratories Ltd and Cipla Ltd, which have gained 29.77%, 14.34% and 9.67% respectively in the past year.


Financials


The company's financial performance has been mixed in the past few years. The company's revenue has declined by 70.56% in the past three years, from ₹3,439 Cr in FY19 to ₹614 Cr in FY22 (TTM). The company's adjusted earnings per share (EPS) has also declined by 21.6% in the past three years, from ₹13.5 in FY19 to ₹4.9 in FY22 (TTM).


The company's return on equity (ROE) has declined from 11% in FY19 to 4.2% in FY22 (TTM), indicating a lower profitability for the shareholders. The company's operating profit margin has also declined from 15.8% in FY19 to -0.1% in FY22 (TTM), indicating a lower operational efficiency.


The company's debt to equity ratio has improved from 0.8 in FY19 to 0.4 in FY22 (TTM), indicating a lower financial leverage and risk. The company's working capital days have also improved from 161 in FY19 to 0 in FY22 (TTM), indicating a better liquidity management.


The company has negative cash flow from operations of -₹3.55 Cr in FY22 (TTM), indicating a poor cash generation from its core business activities.


Stock Analysis


The company's stock is currently trading at a high price to earnings (PE) ratio of 63.17, which is higher than its median PE of 16.95 in the past 10 years. The company's stock is also trading at a high enterprise value to EBITDA (EV/EBITDA) ratio of 46.76, which is higher than its median EV/EBITDA of 9.02 in the past 10 years.


These valuation ratios suggest that the company's stock is somewhat overvalued compared to its past and its peers.


The company's stock price trend is semi strong, which means that it is likely to rise somewhat in the short term. However, this trend may not be sustainable in the long term unless the company improves its financial performance and growth prospects.


Conclusion


Jubilant Pharmova Ltd is a pharmaceutical company that has shown a poor revenue and profit growth, a lower profitability and efficiency, and a negative cash flow from operations in the past few years. The company's stock is somewhat overvalued based on its current valuation ratios and has underperformed its peers and indices in the past year.


Investors may want to wait for a better entry point or look for other opportunities in the sector until the company shows signs of improvement and recovery.


Disclaimer - I am not a registered investment advisor and the view expressed are not investment advice. Please conduct your own research before investing.

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