JB Chemicals Q3 Results Review

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JB Chemicals and Pharmaceuticals Ltd. reported another strong quarter with revenue grew by 32% YoY to Rs 8 billion. Domestic formulation grew by 42% on YoY. International market recorded a highest ever quarterly sales up by 23% YoY mainly led by rest of world and U.S. sales.

Contract manufacturing organisation business almost doubles its sales to Rs 960 million up by 96% YoY. Gross margin down 340 basis points YoY to 62.3% versus 65.7% and flat QoQ implying ex-Azmarda, gross margin may have improved sequentially.

JB Chemicals’ Ebitda margin for the quarter remain stable at 22% on strong operating performance. Profit after tax for the quarter grew by 26% YoY to 1.1 billion.

We stick to our growth rationale and margin improvement on back of operating leverage, and continue with our thesis of earnings-led return with limited scope of rerating till margin turns 28% plus.

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